Do you like standing in a long queue? Well of course not! Who likes after all? But let's just imagine if that is the case, and then be told, your loan application is rejected! How it gonna feels? Well, obviously it feels bad and at the same time pathetic (a feeling that you can't express better than this in words, you know what I mean, right) It’s damn hard to believe that why would a personal loan be declined, until and unless you know who the real culprits are, damaging your profile, making it weaker.
But, now no more worries folks as we are here to help you out in best possible way. We understand your pain and can imagine very well how it feels like to be rejected. So, cheer up buddies because what's coming next will surely make you go gaga. Excited to know what it is? Well, let's get started then…
Table of Contents
- 1 Key reasons for personal loan application rejection
Key reasons for personal loan application rejection
Insufficient Income to Spell Doomsday
Low income is no doubt one of the most prominent reasons why your personal loan is rejected. Let’s understand this point in a better way.
Actually, the whole mechanism revolves around one important factor and i.e. loan repayment. Before availing you the loan, it is mandatory for a lender to know your income details so that they can evaluate whether you would repay the loan in the future or not. If your income is low or does not meet their set criteria, your personal loan application likely to be rejected.
Poor Credit History- A Game Breaker
If you are struggling with your credit score, my friend let me tell you, it is a negative sign for you. Be it a non-banking financial company or a bank, if you have a bad credit score or history, there is only God who can help you in availing a loan. If you have had defaulted on your previous loan, if any or you are not a member of 750+ credit score club, it will nearly impossible for you to get the loan, thus giving more room to loan rejection. So, my friend watch out next time and maintain a good credit history to avoid such situation.
Lack of Job Stability Deprives You Big Time
The lenders also keep an eye on your job stability as it is also an important factor here. The less stable you are with your job or profession, the more chances of loan declination. They check your job profile to access the stability in your job. Let's understand this point better…
Say if you are on a probation, constantly switching your jobs or hired on a temporary basis, let me come to the point straight my friend, it's gonna be a big problem for you! If you are not stable with your job, you tell me how the lender will trust that you will repay the loan without any default. Well, I would say, the ball is in your court either be stable with your job or be ready for the rejection.
Invalid Details/ Incorrect Paperwork Undo Your Eligibility
Now, let's meet another culprit of the story. The details that you provide while applying for the loan will be verified by the lender, and if something goes wrong (I mean any incorrect details provided from your end), the lender will surely gonna reject your application. Similarly in a case with incorrect documentation, if verified, my folks I would, you are himself giving a good reason to the lender to decline your loan request. Then you have no right to ask why would a personal loan be declined? ( Sorry for being so honest, but that's true)
Previously Rejected Loans – A Sorry Picture of Your Past
A loan application, if previously denied by a lender obviously gonna reflect in your CIBIL, which ultimately leads to loan application rejection. But don't lose hope my fellas because we have good news for you.
So, my suggestion to you is hear from one lender before you apply to another. Know your loopholes as it gives you the opportunity to boost your CIBIL and giving you the rooming to apply again in the future.
My friend, I think now you know why would a personal loan be declined? So, I hope you will be careful next time to enjoy a hassle-free loan journey!