How To Avoid Getting Your Loan Application Rejected

 

Personal loans are amongst the most preferred loan products in India. They have some of the shortest approval times, and the lender does not ask why you need the money. Nor does the lender ask for any collateral before granting the loan.

But as easy as it is to apply for the instant money loan, it is also easy for lenders to reject the loan application on various grounds. These might not seem obvious at first, but it pays to be on your guard against a loan rejection. The rejection might ruin your chances of getting access to a large fund of money when you need it the most.

How can you safeguard your loan application from a rejection? Consider the following pointers to avoid having your loan application rejected:

1)      Have a high credit score.

A good credit score is the result of your age, regular monthly salary and good repayment history. Most banks and NBFCs in India use the CIBIL score to check your credit worthiness. However, some loan apps use their own AI-backed algorithms to find the applicant’s credit score, which is a far more  intelligent and analytical approach with more accurate results. We advise clearing up your credit score by repaying past debts before applying for an instant money loan.

2)      Apply on a loan app.

As mentioned above, loan apps are a better option for seeking personal loans. They use highly  intelligent, machine learning softwares to check your credit worthiness. Thus, where a bank may reject your personal loan request based on your income or other criteria, the loan app is likely to approve it if you have a regular source of income (from a salaried job) and a good credit score.

3)      Do not have outstanding loans when you apply for the personal loan.

Lending institutions are wary of approving instant money loans to those who have borrowed other loans previously (such as a home loan). If you have more than one loan to your name at the time of applying for the personal loan, it means that your monthly income is compromised: it must pay the different EMIs every month and thus, it reduces your spending capacity. Any EMI spend exceeding 50% of your income is not recommended. If you are about to apply for a personal loan online, please clear your outstanding loans first.

4)      File your documents correctly.

Another reason why banks and NBFCs reject personal loan requests is incorrect documentation. You might inadvertently miss out on filing some document, or furnish incorrect information. In either case, the lender can flag down the application. Most lenders offer extra time to rectify the lacunae in the documents. But if you are unable to, the application might get rejected. Always study the list of required documents and file them in the order asked, taking care that the documents are correct and latest in scope.

Conclusion

Applying for the loan properly as directed and having a good credit score with a salaried income increase your chances of getting the personal loan. We hope the pointers mentioned above help you get your loan processed quickly.