Why Bank Loans Are Still Hard to Get

Despite the modest gains made by the economy, many people are still finding it difficult to obtain bank loans. Lenders are more cautious financing unemployed people and those with financial problems. The reasons for the reluctance in offering loans vary but include:

Poor Credit Score
Banks are still looking at borrowers’ credit history to determine whether or not to finance them. Most people with poor credit cannot get financing because they are deemed as high- risk borrowers. While there are a number of credit programs for people with poor credit, they come with great restrictions and the loans are charged high interest.

Inability to Meet Payments
The inability of borrowers to meet the payments for loans is making lenders reluctant to offer financing. Borrowers who are unemployed or lack a steady source of income have to go great lengths to convince lenders to finance them. Most of the time they are required to come with a co-signer for the loan.

Unrecoverable Collateral
Lenders usually require collateral from borrowers with poor credit. However, the collateral has to be clean to be accepted as security for financing. Borrowers offering unrecoverable collateral or those with liens are finding it difficult to acquire financing. If you are offering a car title or land title deed, it should not already have been used to secure another debt.

Weak Interest Rates
Weak interest rates are making lenders concentrate on financing individuals and businesses that need long-term loans rather than those looking for short-term loans. Lenders are not finding it viable to offer short-term loans because of the returns they get within the time. Short-term loans do not bring significant business to banks.

Although the economy is improving, banks are continuing to administer their stringent parameters for acquiring loans.


About the Author
Robin Williams is an Executive at CashOne, a leading provider of online payday loans and instant payday loans. Serving the entire United States, CashOne is a preferred partner to help people get through their short-term financial crunches through fast approval and simple terms and conditions.

Cash One – a payday loan company with headquarters in Utah is a low cost cash advance company providing guaranteed short team loan with no credit check to tide over any immediate financial emergency. It offers faxless payday loans of up to $700. Online payday loans come with no credit checks, low fees and flexible payment options.