Question:
Last week my partner tried to get a small business loan from Cap One.He did not think it would be a problem since he's always recieving "pre-approved" Cap One business Loan letters and he has a 700+ credit score.However, after filling out the online app he was denied (I can't remember the reason).I told him to let me try using my info, so I filled out the online application and I recieved an email back saying more information was required before proceding. Later that week a man from Cap called and started asking me very specific business questions.The last ques he asked me was if I owned the business I was getting a loan for and I said "not yet, the reason I am getting the loan is to own part of this business", he then said my loan could not be approved because it's unsecured.Today I recieved a letter from Cap stating that I was not approved because applicant was not the person who was solicted for the offer.Why did they waste my time if they weren't going to give me the loan anyway?
Answer:
One word- PROFIT.
The preapproved mailings are garbage... if you read the fine print, they will tell you that it is subject to further approval. Send mail to 1000 persons, hoping they will respond, KNOWING that of those mailings, many will actually not qualify.
Secondly... the original person solicited (baited) was your friend., who already had been turned down.
ANY of the credit companies, legitimate or rip-off, are going to interview as many persons as they can, in hopes of lending money, thus making a profit from the interest. That's the whole goal of the lending business. They are not going to know your specifics until they go through the process.
You DO realize (or can research) what is known as predatory lenders, who charge HUGE interest rates? Not calling Capital one that... but if you get a loan from one of those, who LOVE lending to those who are borderline risks.. the borrower often winds up paying far more than they would from other sources. Sometimes, it might be to your advantage to be turned down, in the long run.
Write a letter to Capital One.
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