If you have minus for a longer time, you hardly dare to make a loan request. The reason is that you don’t get the loan anyway, or if you do, then only with poor conditions – after all, you’re already in the red anyway. It is simply a misconception.
Account in the minus – a problem that should not be underestimated
Having a minus in your account is generally very expensive. Overdraft rates and dunning costs are often relatively high. If you compare the payments for overdrafts with credit costs, you notice that the first ones make a lot more. However, taking a loan into the account despite a minus is sometimes necessary, and it makes particular sense if you want to balance the account.
Overdrawn account is not a judgment
What the bank likes to see is a good income. Then the bank will only be superficially interested in the minus on the account. However, collection payments and chargebacks have a negative impact on credit decisions, so it’s best to avoid them.
Just to keep that in mind: in principle, minus in the account is not considered a reason for a loan refusal. Some banks even show an increased willingness to grant a loan if the minus in the account is compensated.
What the banks pay attention to in the minus
If you have discounts and you only use them from time to time, or not completely, it is not seen as negative when making a credit decision. If you use the overdraft facility to the maximum, or if you even exceed the permitted limits, it is usually assessed as negative and can play a decisive role in the decision to grant a loan. Credit card statements and numerous cash withdrawals could also lead to rejection.
If the house bank refuses a loan due to a minus in the account
If the house bank refuses the loan, you can certainly look for another lender. You can find out about various alternative providers on the Internet or on our website.
What can still be tried is to arrange a repayment of the overdraft amount with the house bank. If the bank sees that there are no difficulties with the repayments for a few months, it is more willing to grant a loan.
Conclusion: The fact that the account is in the red is no reason for the banks to refuse a loan. If you want to use the loan to compensate for overdraft facilities, among other things, the banks are more willing to grant them. As in normal cases, the banks will pay attention to income and expenditure before making a decision. If a loan is rejected at a house bank, there is still the possibility to find out about credit options from other lenders.