A Personal loan application is something which should be done with utmost care. Even the slightest of mistakes can send your loan for rejections rather than an approval. A rejection always stings. Here we list some top reasons why a personal loan application gets rejected. Make sure you avoid these if you need a quick personal loan approval.
1. Too Many Applications
Whenever you apply for a loan, the banks or NBFCs run an enquiry on your application. If you have applied to a lot of lenders, then this reflects negatively on your credit score. Instead you should check and compare as many offers available and apply to the one you seem fit.
2. Applying with A Poor Credit History
The 3-digit credit score plays an important role in your personal loan approval. Late payments of EMI, too many outstanding loans etc. create a poor credit history. You should have a good credit history before you plan to apply for a personal loan.
3. High Amount of Existing Debts
If you have a lot of existing payments such as credit card bills and other existing loans, then the Banks and NBFCs will consider the amount of your debts to be high and think of as you an overburdened applicant.
4. Can’t Match the Minimum Annual Income Criteria
This is the most important eligibility criteria after the credit score. Every Bank or NBFC has a minimum income criterion. If you apply for a loan which is above the income criteria, then it is likely to get rejected. As you have to repay a personal loan through EMIs, you can use a personal loan EMI calculator and check whether you are eligible for the amount you have applied.
5. Unstable Employment History
Unstable employment means unstable flow of income. Any lender will prefer an applicant who has a steady flow of income. If you have a history of quitting jobs, then there are high chances of your personal loan being rejected.
6. You Do Not Fall Under the Right Age Bracket
There is an age criterion for personal loan application. The age bracket is from 21 years to 65 years. You need be above 21 years of age when you apply for a personal loan and 65 years when the tenure ends.
7. Faulty Documentation
All the necessary documents need to be duly checked. All the documents should be perfect without any faults.
The above 7 are some common reasons which lead to personal loan rejection. If you need a quick approval, then make sure you avoid the mistakes mentioned above.