Personal loans have emerged as one of the key financial products that have become successful because of the ease of application, approval and money disbursement. If you have maintained a strong credit score, has a clean repayment and consistent employment history, lenders can approve your personal loan application in a jiffy.
Leading banks and non-banking finance companies (NBFCs) provide a personal loan of up to Rs.25 lakh at a lower interest rate, wider tenor, and more.
What Can a Personal Loan Be Used For?
A personal loan can be used for a majority of reasons such as:
- Going on an overseas vacation
- Arranging funds during a medical emergency
- Sending your child for higher education
- Having a dream wedding
- Other personal needs
However, there are many times that your personal loan application gets rejected by lenders when you have an urgent need for the money.
This post will help you know the Personal Loan rejection reasons so that you can avoid all and get the approval.
1) When You Have a Low Credit Score
Having a low Credit Score is one of the major personal loan rejection reasons. Lenders assess your CIBIL Score while determining your creditworthiness for the personal loan. If your Credit Score is not above 750+ or more out of 900, your personal loan application will not get approved. You need to keep your Credit Score higher by paying all your existing credit card outstanding, loan EMIs and other payment on time. Defaulting on a due date for an ensuing payment may derail your chances of lapping up a lower rate-based personal loan.
2) When You Don’t Submit Enough Relevant Documents
When a personal loan applicant submits a loan application, the lender wants to ensure that you are a relevant person and hence, they require loan documents. If you don’t submit documents confirming your identity, address, salary details, bank statements and more, there are higher chances of getting your personal loan application rejected. Thus, ensure to submit complete documentation as once this is done, you can get the loan money disbursed in your bank account within 24 hours by leading online lenders.
3) When You Are a Job Hopper
Do you have a habit of constantly switching jobs? You should know that lenders consider frequent job hoppers as a risk while processing the personal loan application. Ensure to have at least 3 years of consistent employment history to get speedy approvals.
4) When You Don’t Match The Personal Loan Eligibility Criteria
Different lenders may have different personal loan eligibility criteria which you need to fulfill while applying for the loan. If your age is not within the limit set by the lender, or if you live in a city where your lender is not serving, the loan won’t get approval. Hence, other than matching other discussed aspects, you also need to ensure matching the eligibility criteria for the personal loan set by your lenders.
A Quick Look at The Personal Loan Eligibility Criteria
Here are the standard eligibility criteria for a personal loan that you need to fulfil while applying for the loan such as:
- Age should be under 25-58 years
- You need to be a salaried professional
- You need to be an Indian citizen
Now that you are aware of the major personal loan rejection reasons, you can work around your profile and then apply to get hassle-free approval.
Bajaj Finserv provides some pre-approved loan deals on personal loans, home loans and more. You can check your pre-approved loan offer right away by sharing your basic details and get instant financing.
Author Bio: Aditi Ahuja is a noted financial consultant and adviser. As she has been worked with several financial organization for many years, she has extensive knowledge in this sector. She writes on personal loan finance covering a broad range of topics like how you can apply for a personal loan, what are Personal Loan rejection reasons, who is applicable for a personal loan.