5 reasons your bank might decline your financing request!

Sometimes after you fill out all the paperwork and submit it to the bank your request is still rejected. This may be caused by any of the following:

1- Debt Burden Ratio (DBR):

The DBR indicates your monthly obligations towards banks and other financial institutions relative to your monthly income. For example, what percentage do your credit card monthly installments represent of your total monthly income?

In 2010 the Central Bank of Egypt (CBE) specified that the DBR whether from credit card debt, personal loans, or car loans may reach up to 50% of your monthly income, while the ratio for real estate financing or home loans remained the same at 40%.

2- Your I-Score:

This represents your entire credit history from the first day you started dealing with banks until now. By studying your I-Score history, the bank decides whether they will take the risk and agree to your financing request or not which is a very big incentive to make sure you keep track of your banking transactions and make sure you always pay any installments on time. The bank enquires about your credit history when you apply for financing by going through the Egyptian Credit Bureau “I-Score”, something that you too can do as an individual by submitting an I-Score inquiry request.
 

If the company has a website or more than one branch, this will make the coding period in the bank faster

3- Your company does not have a banking code

Each bank requires companies to have a specific code/registration number with them so that they may study the company’s financial situation in depth and assess the risk ratios and how stable your job is. If your company is not registered at the bank you will have to submit some extra paperwork such as:

1. Proof that the company has more than 50 employees.
2. Proof that the company’s capital exceeds 500,000 EGP.
3. Company’s field of business.
4. Whether the company has a website or more than one branch (this allows the registration process to go faster).

Some banks will dispense with the company registration and instead use the client’s banking statements. 

4- Poor bank statements

If the account statement you submitted to the bank shows that your account does not receive money on a regular basis or if it shows that your total income within a certain period of time will not cover the loan you are asking for this will weaken your account status.

5- Negative query result

One of the procedures the bank must do while going through your request is to inquire about your place of residence and place of work. If it appears you are not settled in either place, then this becomes a reason for your request to be rejected.

Tips to increase the chances your request is accepted:

• Calculate your Debt Burden Ratio (DBR) before you apply for a loan. You can do this using Faydety’s DBR Calculator!
• Make sure your credit score is OK:
  • Pay any installments on time.
  • Don’t cancel your credit cards.
  • If you have a loan but you’re unable to pay the installment on time, ask the bank to reschedule or refinance the loan.
  • After all your loans are paid, wait 2 years before you apply for a new loan.
• Adjust your deposits and withdrawals so that you are sure there are regular deposits into your account at periodic intervals.
   

Always check Faydety, your premier resource to find the best bank for you to apply for a credit card or personal loan. We are always ready to help you at any point, just click on that WhatsApp icon.