Almost daily I am asked: “Why do I have to prove a bank statement for a whole month to get a loan?” Mrs. Demir yesterday: “I think it is a violation of my privacy.”
The same remark from Good Finance the day before: “I decide for myself what to do with my money.” All very logical reactions, but why does the bank want to see it all? And what do they do with that information?
Review of a Good Finance application
When assessing a Good Finance application, a bank makes an estimate of the risk. The biggest cost item of a bank is that they do not get their money back. If they are sure that they will get their money back, they will be able to offer the customer a lower interest rate.
The less risk the bank runs, the lower the interest for the customer. It is therefore in the interest of the customer to share as much information as possible with the bank.
Are payment problems to be expected?
With those eyes, the bank looks at the changes in the bank statement. It is therefore not important at which supermarket you go shopping, how often you go to Good Credits per month or which hobby you have.
Important are mutations that are an indication of (expected) payment problems. Payments to a bailiff, payment arrangements or more are in red than are permitted from these types of signals.
Provide a loan or not
The bank does not want to and may not grant a loan to people who are or are likely to encounter payment problems. Logical, because that is not in the client’s interests. They also prevent being confronted with high (debit) costs. In addition, good customer benefits from a low-interest rate.
Unfortunately, but that is no different, that customer must make a lot of information available for this. Compare it with the Tax Authorities. You also have to demonstrate everything there while you have nothing to hide.
Loan application & privacy
But what about your privacy? The bank is obliged to comply with the Personal Data Protection Act and the Code of Conduct for the Processing of Personal Data by Financial Institutions. This means that they may not use your data for any other purpose than to apply for your loan.
Honesty pays with borrowing money
Viewed in this way, it is therefore only to your advantage to provide all the information requested. Nice to know that it pays to be honest!