Is it legal for a bank to deny a loan based on borrowers legal status in the country

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Is it legal for a bank to deny a loan based on borrowers legal status in the country

Is it legal for a bank to deny a loan
based on the borrowers legal status in
the country even after the borrower is
approved and provided all nessesery
documentation

Asked on September 26, 2018 under Business Law, Illinois

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 2 years ago | Contributor

Yes, this is perfectly legal. There is no obligation on a a bank to provide loans: it is voluntary for them to do so. They can refuse loans based on what they believe are excessive risks. You have restrictions on your ability to work, and as a non-citizen, are less tied to this nation and more likely to leave and return to your country of origin if things here don't work out. Those factors increase the risk associated with loaning to you, and therefore are legitimate grounds to deny the loan.


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