See in which cases the bank may depart from its own rules to provide financing to the client. Find out the date of the loan waiver
What is a loan waiver?
A loan waiver is a situation in which the customer does not meet all the conditions expected by the bank when granting the loan. However, in some cases, the bank may deviate from its own rules to provide financing to the client. In exchange for a deviation, it is possible for the bank to impose other requirements that the customer should meet – e.g. greater own contribution or additional collateral.
To what extent are derogations most often granted?
- Employment contract for an indefinite period – the bank grants credit only if the employment contract has lasted a minimum of 3 months. However, it is possible to depart from this rule even after the first month of work. Acceptance of such a deviation is helped by the pursuit of professions that are defined as low risk: a doctor, lawyer, nurse, programmer, teacher.
- Fixed-term employment contract – for a bank to accept a derogation, a fixed-term employment contract should last a minimum of six months back, and must be concluded for another 3-6-12 months. In this case, it is important to get a promise of further employment from your employer.
- The amount of remuneration – when granting a loan, banks usually take into account the average remuneration for 3-6-12 months back. In a situation where a client has recently received a raise, he may seek to persuade the bank to accept the new remuneration rate, which will affect its creditworthiness.
- Own business – the minimum period of running a business must be 12 months. However, it is possible to shorten this period to 3-6 months. In this case, it should be demonstrated that the activity is carried out in cooperation with the former employer, or oscillates around the same industry as the previous profession.
- Too high age of one borrower – in order for the age of the older borrower not to be taken into account, it is sufficient to indicate the sufficient creditworthiness of the other co-borrower. The bank will include this person as a borrower, but the possible length of the loan period will be based on the age of the younger person who shows adequate income.
- Own contribution – increasing your own contribution is also one of the ways to obtain better and more favorable conditions, e.g. reducing commission or margin.
Even if we do not 100% meet the bank’s expectations regarding the credit process, it is worth knowing that the bank approaches each client individually and can be negotiated with him. It is worth preparing properly for this process in which an experienced credit expert will help us.