Most of all problems in life can be solved by money but often in life there are situations in which we might need more money than we currently have. For such situations, people can borrow loans from lenders like banks and NBFCs. Among loan options, Personal Loans are one of the easiest ways to secure short term finance for travel, marriage, home renovation or any emergency purposes. However, some people face rejection when it comes to their loan application process. To avoid such circumstances, you should refer to these common reasons why your Personal Loan application might get rejected.
1.Low Credit Score
After you apply for a personal loan, one of the first things the lender will do is to check your credit score. In India, CIBIL is one among the respected firms that provides credit score data to lenders. If your CIBIL score is above 700, it is considered an eligible score, making it highly likely that you will be given a Personal Loan.
While processing your Personal Loan application, one of the required criteria for eligibility is to have an appropriate regular income through a job, profession, or business. If your income is lower than the criteria or if it is volatile, the chances of you getting a Personal Loan can drop.
3.Inaccurate Details in Application
If the details regarding your name, residence, phone number and other account details are inaccurate, it will be difficult to generate the necessary information about you. Without the right information, it is impossible for the banks to approve your personal loan.
Financial stability is highly valued when it comes to providing you a loan. If you switch jobs frequently or do freelance work which is volatile, there are high chances that your loan application will get rejected.
5.Too Many Pending Loans
Banks can access your financial profile even if you have availed loans from third party banks, which is why it is advisable to avail loans only when necessary and ensure timely payment of instalments. If you have multiple ongoing debts with banks and NBFCs, your likelihood of getting the personal loan decreases.
There are other criteria of eligibility for personal loans other than income level and credit score like age, nationality and even educational qualification. Many a times banks tend to think twice about your loan application due to these reasons.
For successfully getting your Personal Loan Application passed, ensure that your current debts are paid and you have a stable financial profile. Currently, you can also Apply for Personal Loan Online after checking the eligibility criteria on the website.