7 Common Reasons for Personal Loan Rejection | Rupeezo

By Rupeezo | 12th, Jan, 2023

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Money can solve almost every problem of our life and give us all amenities. But sometimes, there are situations where we want more money than what we have with us. Personal loan is the most favorite of all. To have that extra money, for our wishes, as a loan, is a cherished dream because of its easy availability. Want to get a personal loan for fulfilling your requirements? Quite challenging! In the market, for a personal loan, it will be beneficial to research aggressively for a lender offering the best deal. But, this is not the final result of your research? Finding best lender doesn’t guarantee the approval of your loan application.

Common Errors Resulting in Personal Loan Rejection Reasons

Here are some hints, which can help in understanding Personal Loan Rejection Reasons:-

     1. Debt And Income

Even after maintaining good credit score, lenders can reject your loan application, as they examine your annual income to assess your payback capacity. If you have any debts on you, it can be one of the personal loan rejection reasons. To avoid this rejection, you must pay off your debts, if any.

     2. CIBIL Score

Credit Information Bureau India Limited (CIBIL) gives you a 3 letter numeric score which is based on your credit history and payment behavior. Lenders check this also along with credit score. If last 24 months of your credit behavior is nice and resultantly gave you good CIBIL score will lessen your personal loan rejection reasons.

     3. Negative Effects

If there is some major negative event like ‘bankruptcy’ in your credit report, BEWARE! It is one of the major loan rejection reasons. In such case, avoid applying for loan.

     4. Incomplete Loan Application

It is one of the very basic loan rejection reasons. If, required information is not furnished and application asking for loan is incomplete, it will automatically be rejected.

     5. Difference in Signatures

Differences in signatures on different documents are most common loan rejection reasons. To avoid this rejection, you will have to be consistent with your signature i.e., you have to make sure that your signature remains the same in all documents.

     6. Error In Credit Report

If there is any error in your credit report e.g., lack of personal information, details of PAN card etc. get it corrected immediately otherwise it will lead to loan rejection reasons.

     7. NOC Not Taken from Previous Lenders

No objection certificate is mandatory for loan application. Non productions of NOC from the previous lender on closing a loan become loan rejection reasons.

Above written tips must be followed to avoid loan rejection. If, for any reason, you face loan rejection, then you must invest following things and must examine your credit report very carefully to avoid loan rejection for the upcoming trials. It is the foremost document which is examined by lenders and on which loan rejection is based. So, before applying for the next time, you thoroughly examine the credit report so as not to face loan rejection.

Reasons for Rejection of Loan Application- Causes and Remedy

Personal loan rejection can happen for various reasons. You must understand the cause of personal loan rejection. If you know the personal loan rejection reason, you can avoid it while applying for it the next time. If personal loan rejection is done by lenders, they must submit in details, the reason for personal loan rejection. You can have a close look at those reasons and eliminate them for the next time.

Reasons for Rejection of Loans Constitute

• The Credit Score and Report. You Must Have All Timely Paid Credit Accounts
• Must Use the Optimum Capacity of Credit Card
• Must Be Punctual in Paying the Utility Bills
• Frequent Enquiries

All of these ends the reasons for rejection of loans. Next time, when you apply for loan it will not have any reasons for rejection of loans and will be approved. Your frequent loan enquiries are also one of the reasons for rejection of loans. If you have planned to take a personal loan, do take it. When you are trying to improve your credit score, you can take the help of credit bureaus like Experian for your credit report to decrease personal loan rejection reasons. You must gradually build up your credit score and clear your credit report.

The other thing, which is taken into consideration while examining the loan application, is that

• Your Address Must Not Be in Defaulters List.
• Your Job Stability is Another Factor for Approval of Your Loan Application.
• Too Many Job Changes Reflect Negatively for the Reason for Rejection of Your Loan Application.

There are chances that your loan rejection is because of your job instability. It is better for approval of your loan application thereby fulfilling your requirements. You’re sticking to 1 job avoids your loan rejection.

• You Must Not Become Loan Guarantors Unless You Know the Repayment Capacity of the Borrower. Being Loan Guarantor to a Defaulter Can Be Loan Rejection Reason, Thereby Being Hazardous for Your Loan Application in Future. So Avoid Being One.
• You Must Apply for a Loan at a Younger Age. The Lender Levies Higher Emi When the Age of the Borrower is Nearing Retirement. So Avoid Creating Loan Rejection Reason.

So, at that age avoid applying for personal loan as chances of rejection increase manifolds. It will decrease the chances of approval of your loan application by regularly paying income tax.

Being a fresher, increase the chances of personal loan rejection reason. The lenders like applicants who have at least worked for 1 or more than a year in a company. Being an entrepreneur increases the chances of getting a loan application approved. If you have a small startup with small capital without any secure future in vicinity chances of rejection of loan application increases and for big entrepreneurs the chances of reasons of rejection of loan application decreases.

Keeping these things in mind you can get your loan application approved and refrain from personal loan rejection.

Frequently Asked Questions

     1. What is Loan Rejection?

When a person applies for loan and it is not approved, it is called loan rejection.

     2. What is the Reason for Loan Rejection?

Non- approval of sanctioning loan by lender is reason for loan rejection.

     3. Why is Low CIBIL Score, One of the Personal Loan Rejection Reasons?

Credit Information Bureau India Limited gives 3 numeric numbers, which is based on credit and payment history

     4. Why Should Error in Credit Report Be Immediately Corrected?

Error in credit report drives away lenders thereby resulting in loan rejection.

For all Indian residents, who want extra cash to fulfill their requirements of starting business, owning a vehicle, arranging family marriage, children higher education or to plan a vacation https://www.rupeezo.in/ is the best platform which lets you get pre- approval on your personal loan in just 9 seconds which helps you get higher chances of loan approval rate and user can get their loan pre- approved in just blink of an eye. You can get loan dispersal in your account without any human intervention. To get instant personal loan apply online  https://www.rupeezo.in/ and enjoy hassle-free loan in just a few hours.