Before applying for a bank loan or online loan, there's always some concern about whether the loan will be approved or rejected. You can be more confident if you have successfully received a loan before and had no issues with installment payments. In that case, your loan application is likely to be approved. However, for newbies and those who have had problems with installment payments, the possibility of rejection is always there.

Loan application rejection can be based on two main reasons: not meeting administrative requirements and being blacklisted. Before a bank decides to approve or reject a loan, they will check your credit history or score through the Financial Information Service System (SLIK).

SLIK data contains a list of current and past loans and how the installments were paid. Like a report card, the quality of someone's loan is determined by the data summary in SLIK. If your loan quality is poor, especially if you are blacklisted, your loan application will definitely be rejected.

Read also: 6 Things to Consider Before Applying for an Online Loan

Why Do You Get Blacklisted by Banks?

Borrowing from banks is common and accepted by society, as long as payments are managed smoothly. However, problems arise when payments fail.

In such cases, individuals risk being placed on the blacklist. Blacklisted customers lose the opportunity to apply for legitimate bank or online financing in the future. This status also complicates other aspects of life, especially in getting jobs, particularly in the financial sector.

Factors that can lead to being blacklisted by banks include:

1. Consistently Late on Installment Payments

   • Financial institutions view late payments as a sign of financial irresponsibility, potentially affecting their willingness to extend credit in the future.

2. Defaulting on Debt for Several Months

   • Defaulting on debt indicates irresponsibility, with unpaid debts accumulating over time.

3. Avoiding Debt Repayment

   • Evading debt responsibilities by running away from bills. This damages your credit reputation.

4. Failure to Pay Debt

   • Inability to fulfill debt obligations due to various reasons such as job loss, medical emergencies, or unexpected financial setbacks.

5. Seizure of Collateral by the Bank

   • Seizure of collateral is a serious consequence of defaulting on secured loans, resulting in the loss of valuable assets.

6. Taking on Too Many Loans

   • Taking multiple loans simultaneously or within a short period indicates financial instability and repayment difficulties. Excessive borrowing increases the total debt burden and monthly financial obligations, making financial management challenging.

Due to all these reasons, banks lose trust in the borrower and blacklist them. This way, when the borrower applies for a loan in the future, banks or other parties will know that the borrower cannot be trusted, leading to loan application rejection.

Read also: Productive Debt vs. Consumptive Debt: Which is Better for You?

How Long Does Blacklisting by Bank Indonesia Last?

As long as the borrower is still in debt, their name will remain blacklisted. Once the debt is settled, their name will be removed. The duration depends on how quickly the borrower can repay the debt.

For example, if the borrower pays off the debt within a month, they will be blacklisted for that period only. Conversely, if it takes six months, a year, or longer, their name will be removed once the final payment is made.

How to Remove Your Name from the Bank's Blacklist

1. Pay Off the Debt

   • The primary way to remove your name from the bank's blacklist is by paying off the debt efficiently. It's crucial to repay the debt as soon as possible to prevent it from accumulating, especially considering the daily interest and penalties.

   This process can be challenging, especially if funds are not available in the near future. Being blacklisted limits access to bank loans and other online loan options. However, alternative solutions such as borrowing from friends or family or selling assets may provide a way forward.

2. Check Status Online

   • After all debts are settled, the bank needs time to update the status in their system, including the Debtor Information System (SID) of Bank Indonesia, which will include information on the date and method of debt repayment.

3. Request a Clearance Letter

   • Customers can obtain a clearance letter as written proof that all debt issues have been resolved. This allows the customer to apply for loans again.

Although you know how to get off the blacklist, it's better to avoid it in the first place. Prevention is better than cure. Pay attention to your credit history to avoid being blacklisted.

If you are free from the bank's blacklist, it will be easier for you to apply for a loan with Neo Pinjam from neobank.

PT Bank Neo Commerce Tbk is licensed and supervised by the Financial Services Authority (OJK) and is a participant bank in the Deposit Insurance Corporation (LPS).