5 Unexpected Reasons for Your Personal Loan Rejection

reasons for Personal Loan Rejection

Well, let’s face it, availing a personal loan is surely a tedious task. Yes, it needs a lot of research and time in order to get an ideal lender, offering the best deal. And, that can be possible by comparing the different lenders to get the loan at lowest interest rates. A good credit score, less financial liabilities, higher income and last but not the least no default record is all you need to get your loan approved. But, there are times when due to some unexpected reasons a personal loan application can be rejected. However, we hardly pay attention to these minute details, but if you neglect them, the lender may reject your loan application. So, without wasting any time, let’s get started and look at 5 unexpected reasons for personal loan rejection:

Mismatching of Signature

Many of you will surely agree on the fact that availing a personal loan is no child’s play. Thus, when it comes to the signature, it should remain the same everywhere. Though it is quite understandable that you are supposed to provide your signature in many places, there are chances that the signature may vary a bit. However, you need to be careful here and avoid mismatch for the smooth approval of the personal loan.

Credit Report Errors

The errors in your credit report may hinder your chances of getting an approval for a personal loan. Yes, errors such as incorrect reporting of payments, closed accounts being still shown open, mistakes around personal details like wrong address, PAN details, etc. can lead to a personal loan application rejection. In order to avoid the same, it is advisable to check and review your credit report periodically. With the help of doing that you can spot such errors and get them rectified timely before they harm your loan approval chances.

Forget to Take the NOC from the Previous Lender

Say you have already closed your previous loan and are planning to avail a new. Wait a minute! Did you get the NOC or No Objection Certificate from your previous lender? Well, if not, your personal loan application may be rejected. Yes, you read that absolutely right. If your CIBIL report does not have any mention of NOC, you are in trouble. When it comes to disbursing a new loan,  lenders are very rigid about their rules and regulations, thus will always ask a NOC of your previous loan. So, don’t forget to take the NOC from your previous lender.

Inaccurate Details

At times, personal loan applications are rejected because of incorrect details provided by borrowers. Since a personal loan is unsecured, so every detail of a borrower is verified for authenticity and incorrect details can become the cause of rejection. You need to fill in the loan application form carefully and provide accurate & updated information.

Bank’s Defaulter List of Location

It might sound weird to you, but this is true. If you are interested in availing a personal loan and you live in a location or an area, which comes under negative zone or falls under the bank’s defaulter list, there are high chances that your personal loan application will be rejected. Yes, even in case of a personal loan, lenders do keep a record of address, location and other details. And, if your current location is under the defaulter list or the negative zone, your personal loan applicant might be rejected.  

So, stay away from these freak mistakes that can lead to personal loan rejection!

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  • Personal Loan Interest Rates September 2023
    Fullerton India12.00% - 24.00%
    HDFC Bank10.75% - 14.50%
    ICICI Bank10.75% - 19.00%
    IndusInd Bank10.25% - 26.00%
    Kotak Bank10.99%
    RBL14.00% - 23.00%
    Standard Chartered Bank11.49%
    Tata Capital10.50% - 24.00%
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