High Key Rate is the Main Reason for Rising Credit Rejection Rates - T-Bank

In October, banks began rejecting people's credit applications more frequently than at any point in the past year. According to NBKI data, 81.9% of applications were denied—meaning 82 out of every 100 applications were rejected. That's 3.7% higher than in September. In a conversation with Argument Media, T-Bank noted that the rise in rejection rates is directly linked to the prolonged period of elevated key rates.

"The main reason for the increase in rejection rates is the extended period of high key rates, which prevents banks from anticipating improved conditions and assessing client burden based on lower rates."

As a result, pressure is being felt across all segments: consumer loans, auto loans, and mortgages. The only difference is the degree of burden: when rates rise, virtually any payment becomes substantially higher, meaning default risks increase significantly. Back in September 2025, one in five Russians faced an unsustainable credit burden: 22% of citizens cannot make timely loan payments, nearly 21% of respondents described their debt burden as too high, and 18.5% of borrowers spend more than half their personal budget on servicing loans.

While credit history, reliability, and employment tenure were key factors a few years ago, one criterion has now taken center stage—income. T-Bank explained that borrowers with low or middle income levels have become the most vulnerable group.

"A client might have been able to handle their credit burden at a 9% key rate, but at 16.5%, their salary is no longer sufficient for regular payments."

Mass rejections represent a burden not only for borrowers but also for banks. At first glance, strict filters may seem like a profitable strategy. But there's a flip side:

"For banks, this means lower approval rates and, consequently, reduced lending volumes."

According to NBKI data, in October the number of consumer loans issued (cash loans) totaled 1.59 million units, which is 4.6% lower than in October 2024 (1.67 million units).

Banks are now forced to operate under constant uncertainty and build the most conservative parameters into their calculations. Even potentially reliable clients may find themselves in the risk zone at current borrowing costs simply because their incomes no longer meet the new solvency requirements.

This reflects a new reality. As long as banks cannot count on monetary policy easing from the Central Bank, they cannot assess borrowers' debt burdens based on lower interest rates.