Top reasons for Personal Loan rejection

Availing Personal loans is the easiest way to avert from any financial trouble as it satisfies your immediate requirements of cash. However, the lending facility or banks will verify your profile before approving your loan application. Getting an approval for personal loan is not easy, especially when you don’t have a good credit history and hence, a lot of times your personal loan gets rejected. There are other factors too, that may hinder the process of a smooth loan application process and they are –
• Insufficient Income
The amount you’re earning is vital while applying for a personal loan. The lender checks your income and if you’re unable to sustain your monthly payments then the application gets declined. They also check your job status, whether you’re on probation or whether it’s a temp job. Banks and lenders will also check the financial status of your company you’re working for.
• Bad Credit History
The first and foremost verification done by your bank will be your credit history. These will include any defaults taken on earlier loans, court judgments, loans that are overdue, unable to pay previous personal loan interest rates, late payment of telephone, credit card and electricity bills, and skipping EMIs. Also, if in the past you’ve been a loan guarantor to someone and it defaulted, then the bank will consider you responsible.
• Previously rejected loans
If you’ve a loan application that has been rejected previously then it’s reflected in your CIBIL record. For further information of your credit record, you can get a copy of the same from CIBIL and sort out any discrepancies.
• Invalid Details
The details provided by you on the documents will be verified. If there are any faulty details then the bank or the lender will straightaway deny your application.
Mostly these aforementioned scenarios occur with young working professionals as they are naïve about the process. If you’re a young professional and applying for a personal loan, always check the rate of interest on personal loans as they vary from bank-to-bank and you may miss a better deal. Also keep in mind the above pointers and try to avert them at all costs. A good credit history is the only thing that will help in getting you a personal loan.

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