When you face a financial crunch or want immediate funds for various reasons, personal loan comes as the easy way out to organize cash timely. Many a times borrowers are in a hurry to apply for personal loans and forget to consider important factors that lead to loan rejection. Ignorance of eligibility criteria, improper submission of documents, incomplete personal details or incorrect bank account details are some common reasons why personal loan often gets rejected.
Before applying for
personal loans, borrowers should adhere to the terms, conditions and eligibility criteria to avoid loan rejection. A detailed study should be done about the lender’s guidelines and documentation to avoid personal loan rejection.
So, it is better to stay updated with reasons why personal loan gets rejected:
- Low credit history- Delayed debt payments or missed EMIs can reflect negatively in your credit report resulting in rejection of personal loan. The higher your score, the better are the chances of getting instant personal loan approval. So, to avoid loan rejection improve your minimum credit score.
- Excessive debt- Lenders verify borrower’s financial history and number of credits taken in the past. If there are many active loans or credit card accounts, it increases the amount of credit value to be repaid. This can put lenders in a fix whether to offer the personal loan or not.
- Unstable employment history- Job stability or consistency in business is an important factor that results in loan approval. Personal loan is likely to get rejected in case your work statistics displays unstable employment pattern, frequency in quitting jobs or changing business.
- Multiple loan enquiries and application- Sending multiple requests and enquiry for personal loan can have a negative impact on your loan approval. It reflects lack of professionalism and low patience level on the part of borrowers. Hence, it is better to check your loan status online through the instant loan apps.
- Lack of proper documentation- Lenders check the list of mandatory documents duly submitted during loan application. If a document is found to be missed or incorrect, it can result in loan rejection. In case of paperless documents, ensure you upload the right document or enter correct Aadhar Card number during loan application.
- Other eligibility criteria unmatched – Borrower’s income, identity, age are other basic factors set by the lenders for the approval of personal loan. Besides, you should also reside in a city from where the lender operates to get the loan approved. Not adhering to eligibility criteria can cancel loan applications.
Concludingly, these are the collective factors causing
personal loan rejection. Therefore, take a note of the listed eligibility criteria on the lender website to maximize your chances of availing quick personal loan.
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