Why is a Loan Refused

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The money we lend belongs to all the members of the Credit Union. It is our responsibility to all members to ensure that we only lend members’ money to other members when it has been established that there is an ability to repay the loan. A borrower must be able to afford the loan repayments, including interest, over the full duration of a loan, therefore if income is not secure enough that may be a reason to refuse the loan.

We also need to be sure that we are lending responsibly and do not knowingly facilitate a member becoming over indebted. If a loan applicant does not have enough income to repay the loan, the loan will be refused. We will assess the circumstances and loan requirement in coming to a decision regarding repayment capacity.

Part of the loan assessment process is that we check the CCR (Central Credit Register) for an applicant’s previous loan repayment history. If the report shows a poor credit history; that an applicant has not been paying back other loans in the past, that is taken as a potential indicator of whether they will repay the loan to the Credit Union. The loan may be refused because the risk that they will not pay back the loan to us is too high .