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Asset Based Loan

Discouraging an applicant – Why banks tell you they “can” do a loan

Heard this scenario before?:
You or a friend go to the bank, inquire about a loan, and leave feeling like the bank will make you a loan even before you apply, only to take a hard landing and be declined at the end of the process?

Why does this happen?   The answer is simple.   Banks are deathly afraid of prematurely discouraging an applicant, even if the customer gives them info upfront that they know points to a decline.    While experienced bankers may tell you upfront that certain loans cannot be done, even experienced bankers will usually only do so with slam dunk obvious decline reasons, or in cases where loan requests are made that the bank never does, such as loans against overseas houses, or against vehicles that are too old, for example.

The driving force behind this fear is accusations of misrepresentation, discrimination and eventual litigation.   Banks would rather just have you apply than tell you in advance that the chances are very low they will do the loan, to the point they are willing to take a hit on the processing costs associated with your application.

When going to a traditional bank for a loan, speak with an experienced loan officer and present as many facts surrounding your situation as you can.    Listen closely to their answers, maybe they will tip you off in advance of the likely outcome, saving you weeks of time and hours in applications and phone calls and leaving you with nothing to show for it.

Apply where you have the strongest chance of being approved.  Start Below.

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