Applying for a personal loan is an easy process. However, to get a personal loan approved is still something which requires thorough research. You need to have the right set of documents ready to submit during the application. Even so, there might be chances that your loan application might be rejected. If you have faced a loan rejection, then here is how you can deal with it. These are some of the ways in which you can find out why your instant personal loan application was rejected.
1. Look Out For The Reason For The Rejection
There can be multiple reasons for your personal loan application to be rejected. Usually, loan providers send you a letter, which cites all the reasons for loan rejection. Some of the common reasons may include:
- Unstable employment history
- Monthly income lesser than the required amount
- Working in a private company which is delisted
- Not fulfilling the eligibility criteria
When you apply for a personal loan in India, you need to make sure that you do thorough research about the requirement. Even though you can now apply for personal loans online, you need to still research.
2. Check Your Credit Report
A personal loan is an unsecured loan, which means there is no need to pledge any collateral. This being said, the banks and NBFCs need some surety of you being a worthy applicant. For this, they check your credit report. A credit report is a breakdown of your credit history. It is detailed and helps the lenders gauge your credibility as an applicant. Not only lenders, but you can also access your report as well. You are eligible for a free copy once a year.
3. Check for The Minimum Income Requirement
Almost all personal loan lenders have a minimum income requirement. You can search for it on the lender’s website or call up the lender and ask them directly. If you do not fulfil this criterion then there is a chance your personal loan application will be rejected.
4. Get Expert Opinion
Once you have made sure that you know all the reasons and have considered all the plausible reasons, you can get an expert opinion. This will help you avoid such loan rejections in the future.
5. Put a Limit on the Outstanding Debt
A debt to income ratio is a measure of how much money you can borrow as a loan. This is an indicator of how responsible you are with your money. If your debt to income ratio is high then it shows you are using too much of your money. Hence, you have to put a cap on your outstanding debt.
Loan rejections are something, which you cannot avoid, but you can certainly prepare for it. The above are a few things, which you can keep in mind and deal with your loan rejections. Additionally, you can also verify your details before application. You can get personal loan online and look for all the details on the website of the lender.