There Are Things You Should Not Tell Your Banker

I will first start with the things that you should not say to your banker when you go and see him. Remember, banks are not there to help you out; they are in the business of making money without taking any risks. Anything you say related to a urgent need for credit will scare your banker and your application will be declined before submission.

Things that should not be said:

“I need this loan for today, I urgently need money now”

Like I said before, anything that leads to an emergency, I am thinking: “What a waste of my time, let’s decline this guy now”. Banks like to take their time, even if you are approved, don’t ask for your money right away. If you really want to know when you will get the money from your loan, ask about the next step of their banking procedure once the loan is approved.

“I need credit to pay off taxes that I owe to the government”

There is nothing worst than owing money to Big Brother. They have basically rights over anybody else when it comes to collecting. If you owe money to them, do not tell a word to your banker. Instead, tell him that you need additional credit for renovation, investment, education, to purchase a vehicle. Say anything but stupidly asking the bank to pay the Government.

“It is Christmas and I would like to buy a nice gift to my spouse/children/etc”

You laugh but I heard this one many times. Do I really need to say more?

“I am borrowing to put cash down on a property”

There is a golden rule in banking: Do not use credit to pay credit. While there is an interesting avenue to this when you are able to camouflage your goal, banks will not likely approve your request if you want to borrow your cash down, especially if you are doing the mortgage with them. The Credit department will automatically decline your request as they will require proof of existing cash down prior to the purchase. There are ways to create cash down in order to buy a property; you should have to don’t tell the bank about it.

“I want to help out my grandchildren buying a property”

While there is nothing bad about helping your siblings with your money, banks might be afraid of lending money to elderly people. They call it the risk of reputation. They don’t want to be seen as the bad banks giving out money to older people that are being scammed by their own family. However, it might not be your case. If you need credit to help a family member, just give the above mentioned reasons such as renovation, investment or to purchase a vehicle without security attached to the loan.

“I need credit to pay off a personal debts/gambling debts/other people’s debts”

Banks don’t want to cover for any other people’s debts but yours. If you are trustworthy and you can afford the debt, ask for credit as it is for you. Any debts that are not registered at your credit bureau should never be mentioned to your banker. He has absolutely no ways to find out about them and it will just hurt your file to be honest. Just forget about them. When there are asking to fill out the balance sheet, only disclose what is on your credit bureau. Forget about anything else.

“I wish to use a line of credit to pay off my debts”

Many people try to get a line of credit for consolidation purposes. The payments are minimal (it is often interest only or about 3% of the balance owing) and the bank will re-advance the full amount at any time as it is a revolving credit (it works exactly as a credit cards beside the fact that interest rates are lower).However, to properly consolidate your debt and get rid of them, I strongly suggest you apply for a personal loan. Nonetheless, if you still want the line of credit, just say that you need it as an emergency fund or you plan to repair your car, do some renovation. You better keep in mind that if you have several debts and not much assets, you will never qualify for a line of credit anyway.

“I received a notice and I will be laid off in 2 months, I would need an emergency fund at this point” or “I expect to quit my job shortly to start my own business”

Tough luck with this one! You just tell them that you will not be making a penny. Even if you expect to make a lot of money and pay them back later on, banks don’t care, banks look at their own pocket and how much risk you do represent.

You must also remember that the bank will look at your present financial situation. If you are aware of any bad situations that will occur in the near future, KEEP THEM FOR YOURSELF! As of today, what is your financial situation? While disclosing the whole truth about your need for credit is not a good ideas, bankers are not dumb as well. If you can’t make up a credit request that make sense they will ask more questions and then find out about the truth. If the bank discovers what you are trying to hide, you are a dead piece of meat.

If you liked this article, you might want to sign up for my FULL RSS FEED. Then, you would get my daily post in your email and can read it at any time. To subscribe, please click HERE..