The need of personal loan has increased in today’s world and it would not be wrong to say that a personal loan acts as a saviour in case of monetary exigencies. Now, it may come as a big shock and disappointment when the lender rejects your loan application for some reasons. This article focuses on some of the major reasons why your personal loan application gets rejected.
If we have a closer look at the reports, we notice that it is not always possible that you get your personal loan application approved all the time from the lender. The best defence against personal loan rejection is to know what it takes to be approved by a lender.
- Credit Score
Your credit score is one of the main factors for determining whether your loan will be approved or not. Despite being it, such an important factor applicant does not take credit score quite seriously. Not every lender requires excellent credit, but one should always maintain a good credit score in order to avoid any problems later. If you’re unsure about your credit score or credit history, you can always check it our credit score checker or you may directly ask the lender.
- Low Income
Many lenders have a minimum income requirement while looking into a personal loan application. This may not be listed in the eligibility criteria or their website, but lenders generally investigate the income statement of the applicants. As your monthly income helps them in gauging your loan re-payment capability. If the loan re-payment EMI is monthly salary, then it is highly unlikely applicant will be able to re-pay the loan on time.
- Job Stability
Lenders are quite meticulous about the stability of your job. Several lenders insist on having stable job or at least a regular source of income for approving a personal loan. Also, if the lender feels the company’s future is at stake or seems unstable then they may reject your personal loan application.
Bottom line
There’s no way to completely guarantee that your personal loan application will be approved. Even if you meet all the eligibility criteria listed by a lender, the lender can still reject your application at its discretion.
However, you can avoid common mistakes that lead to personal loan application rejection and follow the tips we’ve discussed to improve your chances of approval. You can also compare your personal loan options to find more lenders you may be eligible for.
