Today, people take personal loans for varied needs, and it would not be wrong to say that a personal loan acts as a savior in terms of financial exigency. Now, it comes as a big shock, when a lender rejects your loan application due to several reasons. Well, this article is focused on why a lender rejects your personal loan application. If reports are to be believed, we would like to tell you that it’s really not possible all the time that your personal loan application gets approved from lender easily. Lenders consider several factors before approving your loan application, and the process of loan approval varies from one lender to another. Here, are some of the common reasons, why your personal loan application gets stuck in the process:-
Credit Score: – Despite, it being a key component for personal loan approval, still many applicants does not take CIBIL score seriously. By saying “CIBIL score seriously”, we mean that you should avoid a delay in the payment of running EMIs (if any) or your previous credit card dues. Sometimes, you fail to make the payment on time, because of certain emergencies. That’s fine! But it shouldn’t become your regular habit. So, just avoid being trapped into this bad habit of irregular payment. Do keep in mind that lenders consider and check your profile thoroughly. Borrowers keep on showing this continuous tendency of irregular payment pattern, which leads to one of the biggest reasons for personal loan rejection.
Low Income: – Well, this is another common reasons for your personal loan application get rejected. Before approval, most of the lenders consider your current monthly income just to gauge your repayment potential. If a loan EMI is greater than your current monthly salary, then the chances of your loan application would increase. In such cases, what you can do is to apply for a low amount of personal loan, or add the co-borrower to increase your eligibility. Documentation: Well, before approving your personal loan application, lenders verify your KYC details. In case, if you give any incorrect detail or submit any wrong document, the lenders will surely going to reject your loan application. Thus, it affects your CIBIL scores in future. Lenders also check if anyone in your house has slipped on paying the monthly payments, if yes it would be reported to CIBIL. As lenders would probably have the address saved in their defaulter’s records, hence the chances for your loan application to get rejected go high.
Job Stability: Most of the lenders give lot of importance on your job stability. Few lenders insist that a borrower should have a working relation within the existing company for 3 years or more to be considered as eligible. In addition to this, if the company’s future is at stake or seems to be unstable, the lender can back out from approving loan to an applicant.
Many financial pundits says that if your personal loan application has been rejected more than two to three times, it is not wise to keep applying and getting rejected as this will get recorded in your CIBIL record.
Hence, it is advisable that before you plug-in for personal loan check all the loop-holes first, so that your chances of loan application rejection can be minimized.