Can I claim compensation from my bank if they wrongly rejected my credit application?
January 1, 2023 | 40,00 EUR | answered by Carsten Ahlert
Dear law firm,
My name is Ulrike Bauer and I have a question regarding banking law. Some time ago, I applied for a loan at my bank in order to carry out urgent renovations on my house. Unfortunately, my application was rejected by the bank, even though I believe I met all the requirements for a positive decision. This not only put me in financial difficulties, but also significantly impacted my renovation plans.
I do not understand why my loan request was denied and wonder if the bank may have acted unlawfully. I submitted all the necessary documents and provided a detailed explanation of my financial situation. However, my application was rejected without a plausible explanation.
I am concerned that the bank unjustly rejected my request and wonder if I can claim damages in such a case. The rejection of the loan has not only caused me financial losses, but also delayed my renovation plans indefinitely.
Can you please tell me if I can demand compensation from my bank if they wrongly rejected my loan request? Are there legal options to challenge the bank's decision and compensate for my losses? I would be very grateful if you could assist me in this matter.
Sincerely,
Ulrike Bauer
Dear Mrs. Bauer,
Thank you for your inquiry regarding banking law. I am sorry to hear that your credit application was rejected and that you are facing financial difficulties as a result. Indeed, the rejection of a credit application by a bank can be very frustrating for the applicant, especially when they believe they have met all the requirements.
First and foremost, it is important to understand that banks generally have the right to evaluate and approve or reject credit applications according to their own criteria. These criteria may vary from bank to bank and are often based on a variety of factors such as creditworthiness, income, collateral, etc.
However, in your case, there seems to be confusion as to why your application was rejected, even though you have submitted all the necessary documents and disclosed your financial situation. In such cases, it may be worthwhile to ask the bank for a detailed explanation for the rejection. Often, banks can provide more information about their decision upon request.
If it turns out that the bank unjustly rejected your credit application, you may potentially have claims for damages. It is important to note that the burden of proof that the rejection was unlawful lies with you. You must be able to prove that the bank has violated applicable law or made a mistake that led to your rejection.
To challenge the bank's decision and seek compensation for your damages, you may first try to reach an out-of-court settlement with the bank. If this is not possible, you may consider taking legal action and consulting a lawyer to represent your interests.
Overall, it is important that you seek legal advice in this matter to assess your options and chances of claiming damages. I am available as a lawyer specializing in banking law and can assist you in enforcing your claims.
Best regards,
Carsten Ahlert
Banking Law Attorney
