They rejected you! If you were denied a consumer loan, we teach you how to recover

Applying for a loan is easy, but it is not 100% sure that the bank or financial institution you turn to says yes. A large part will have to do with your profile: your income, your debts, your financial behavior, among other points, and also with the amount you are requesting as well as the documents you have presented and how you supported it.

If, after all, the answer ends up being no, it is normal to feel discouraged and want to send everything down. Overall, if they already told you no, does it make sense to keep trying with the same bank or with someone else? It is also valid to get angry, since the denial of credit means that you will not be able to meet the goal you were looking for, whether it be paying for a trip, taking a vacation, paying for your studies, among others.

But rather than taking this as an excuse to throw in the towel, it’s better to look at it as a new motivation to correct certain aspects of your financial life and try again. With a few changes, the next time you request it, you will definitely do better.

So what should you do Get out a pencil and paper and take note of these tips!


1. Ask for a reason

1. Ask for a reason

If you were denied the credit, you can consult the advisor who attended you what were the reasons for the refusal. This will give you lights to see what small changes you can implement. Some entities even send you an email or a document explaining the reason for the rejection. Normally, it is common for credits to be denied when they exceed the person’s ability to pay or when it is shown that they have the necessary income to pay it.


2. Reduce your debts

2. Reduce your debts

If you have several active credit cards and one or more credits to pay, you will not be well regarded by financial institutions, as your risk exposure is very high. Even if your income is very high, having so many debts shows that you are not managing your cash well.

So, something you can do is eliminate some cards or focus on canceling the credit that you have active. Once your risk exposure is reduced, you will have a better chance of being approved.


3. Check your credit report

credit report

You can request this report from a credit center. The idea is that you check the status of your credit history, to see if you are qualified as a risky customer or not. This is a very important point when applying for financing. This will also serve to check if all the payments made were recorded correctly or if there is any debt that you do not recognize and that may harm you.


4. Build your history

credit history

If you have never been related to credit, have never had a credit card or applied for credit before, it is normal that there is uncertainty on the part of financial institutions, since they do not know if you are a good or bad payer and you continue to represent a risk. What can you do? One of the easiest steps is to purchase a credit card. It does not mean that you will get into debt, rather, the objective is to use it to make certain purchases that you would make in cash and pay it on time so that you begin to demonstrate your good financial habits.


5. Increase your income

salary loans

Something that also works is looking for alternative sources of income, so that you have a greater ability to pay.


6. Check the amount you are requesting

6. Check the amount you are requesting

If you are asking for more money than you can pay, it is one of the reasons why they could have denied you the loan. So, ideally, you analyze if that amount is what you really need and according to that, do your calculations to see if you can reduce the amount. Additionally, it will be very useful for you to know what your payment capacity is. How do you know? Add up all your income and then subtract all the payments you need to make. The remaining money, which is “free” is what represents what you could spend to pay off the credit monthly.

Finally, try to have all the documents in order so that there are no problems when presenting them and whoever reviews your application finds everything you need, without exceptions. The clearer the information, the faster it can be managed.

Advertising costs: How households save on building loans

Many households opt for a building loan against the background of low borrowing costs.

after all, your own four walls promise certain financial security, especially in old age.

Before that happens, the home costs money.

Debt interest is to be shouldered for the building loan.

Depending on the general conditions, the interest payments quickly amount to several tens of thousands of USD.

How can the costs for advertising costs be accommodated?

Advertising costs and construction money – how does it work?

Advertising costs and construction money - how does it work?

In principle, a property that is used by the owner is usually not a tax-saving model, since debit interest cannot be deducted here. But: If you use the house or apartment to generate income, the situation is different.

The background to this is the possibility of claiming expenses for professionally induced purchases as advertising costs or operating costs (for self-employed and freelancers). When can a property that is financed through a construction loan enable this option?

  • For professional reasons there is a transfer from Berlin to Hamburg. Daily commuting is eliminated due to the distance, you decide to buy a small 2-room apartment. Since the purchase is being pushed to secure the income, the interest on the debt can be claimed as advertising costs.

Rent out property – interest and depreciation

Rent out property - interest and depreciation

The professionally used second home is one aspect of how you can profit from the purchase of real estate through the advertising costs. What about the rental factor? A cheaply acquired apartment building or the expanded attic are conceivable scenarios that lead to a rental.

In this connection, too, the interest for the building finance is deductible via the advertising costs. However, landlords can pull out completely different registers in the tax return.

For example, the tax offices assume that the property will be “consumed by value”, which will allow depreciation to be deducted. The latter can generally be claimed over two percent of the acquisition costs per tax year. Various operating cost items are also deductible in connection with a rental.

Commercial use: operating expenses instead of advertising costs

Commercial use: operating expenses instead of advertising costs

What does the tax deductibility look like for (partial) commercial use? If you use your own house in parts as an office or warehouse, you can set expenses such as interest on operating expenses. Here, however, it must be ensured that depreciation can turn into a boomerang when a business is dissolved.