Why can you get rejected for a microloan?

Why can you get rejected for a microloan?


May 24, 2021

Taking a loan online today is a convenient and easy way to get the right amount of money in a few minutes. Modern technology allows you to apply online from the comfort of your home and to sign the contract also online.

To obtain the money there is no need to provide a package of documents, such as those that are usually required by banks for a loan. Also, banks are obliged to provide a certificate of income, and you may also need guarantors and pledges. Microfinance organizations have simplified the cash advance procedure to a minimum.

First, to obtain a loan on the map urgently without refusal, you do not need to provide verification of income, and secondly, do not need guarantors and collateral, and thirdly, do not need to visit offline offices, as well as design, sign the contract and issue the money occurs online through the site or application. This enables everyone to get the right amount of money, regardless of where the borrower is geographically located. The microfinance organization is very loyal to its clients, and in 90% of the borrower receives the desired amount of money. But still there are 4 main reasons why a borrower can be refused a microloan.

Why can a microloan be refused?

The first reason is problems with repayment of previously taken micro-loans in micro-credit organizations. Microfinance organizations most often use their “black” lists, which include borrowers who have not repaid their loans on time. Microfinance companies are very loyal to those who have a bad credit history according to the banks. It is possible to get blacklisted by an MFI, either knowingly or unknowingly. There are some people who really don’t pay back the loan with malice, and there are those who, for example, pay on the last day of the term of use of funds through a terminal, and they go only 3 days later to the current account of the company in which the borrower took the loan. More details at the link: https://play.google.com/store/apps/details?id=com.onlinecashadvance&gl=us&hl=en-US.

The second reason is incorrect data when filling out. Any incorrectly filled out box when applying for a loan online can be a reason for refusing a microcredit.

The third reason is a social media profile. Lenders use any available public information through which they can learn about a potential client. If the information in the online questionnaire does not match what is available in social networks, it can also be a reason for refusing a microloan.

The fourth reason is a bad credit history. Yes, microfinance organizations, rarely resort to data from banks, but still to reduce credit risks, the lender checks the information.