Your credit history is fine, so there should be no problem, right? Once you have decided to apply for a loan, it is a big blow if your application is rejected and you do not get the loan.

The purpose of the loan is already well planned and the need for the loan will not disappear with the rejected loan application. Before you rebuild your plans, consider why your loan application was rejected and what you can do about it. This is not what distress looks like.

Do you know your economy well enough?

Do you know your economy well enough?

When applying for a loan, it is very important to be realistic about your own financial situation. The loan amount should always be related to your income, as the loan is not intended to ruin you. When used properly and proportionately, the loan is intended to improve one’s quality of life, for example in the form of a much-needed renovation or a car for a new job.

Your loan application may have been rejected because you have overestimated your own loan need or ability to pay. Responsible Credit Companies will review your financial situation through the customer register and possibly through your pay slip.

Find the loan amount that suits you by answering the following questions:

  1. How much monthly installments can you pay?
    • The monthly installment should leave some flexibility in your economy. The loan should not require a life-long revolution where you sit at home eating frozen tuna and noodles all year long.
    • One model is that the monthly installment of your loan should not exceed 30 percent of your monthly income. However, this is only a suggestion.
  2. If interest rates on a loan go up, are you in trouble?
    • For example, if your loan is linked to a Euribor reference rate, an increase in interest rates is always possible. Will your economy withstand rising interest rates?
  3. Are you ready to keep the total cost of the loan under control?
    • While the smallest monthly installments are attractive, don’t be overly excited about them. Small monthly installments mean a long loan period, which increases the total cost of the loan by increasing the interest month after month.

So, when looking for the right loan amount, you should focus on factors other than the price of your new car or renovation. Rational loan planning starts with studying your own finances.

Watch out for danger!

Keep in mind that banks are also for profit companies. For this reason, the amount of loan offered by the banks is often very high within your ability to pay. To avoid borrowing too much, knowing your own finances is worthwhile.

General terms and conditions for loans

General terms and conditions for loans

In addition to the excessively high loan amount, the rejection of your loan application may have been due to your failure to meet the conditions set by your bank or financial company. Although the terms vary from company to company, there is also a consistent line:

  • You must be cool
  • You must have a permanent address in Finland
  • You must not have payment default entries
  • You must have a regular income

The above conditions are usually the minimum requirements for getting a loan but as with life in general there are exceptions. Sometimes adulthood is not enough; you need to be older. If you have moved to Finland from abroad, you may have to wait while your account information is not yet available in Finnish customer registers. If you have a default payment, you may be able to get a loan from Svea.

After the first rejected loan application

After the first rejected loan application

The point is that the terms of access to loans vary from one financial company to another. Get to know different providers if your first loan application is not easy. Anyway, you should never apply for a loan from the first incoming provider – how else do you know you are not paying too much?

In our comparison, you can send your loan application to multiple loan providers at once, so you don’t have to do it each time. This way, you can get multiple loan offers on the same page at once, all you have to do is select the best one. Remember, the loan application is not binding on you yet. A bad loan offer has never been accepted.


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