Being rejected is not something we take lightly, be it on a personal or a professional front. This rejection actually does not have any bearing on our personal capacity. It just means that something is lacking and many times this can be fixed.
Look at the case of taking a personal loan. Loans in general, secured or unsecured, is only taken in the time of need. It is a fact that personal loan requirements are often sudden and you will only avail one in time of need.
It could be for anything, that you have did not foresee. You would want to go on a much-needed vacation, renovate your house, or sponsor your sister’s wedding. These days, financial institutions such as Tata Capital let you apply for personal loans online at a single click. Irrespective of the need, it is therefore of utmost importance that your personal loan is approved and processed successfully.
However, there are times when your personal loan application may get rejected. If it does, there is not to feel dejected about. There are plenty of ways to understand and rectify the situation.
If you are planning to apply for a personal loan, it is best to know the reasons why personal loan applications are rejected so that you can be doubly sure about everything before you apply for a personal loan. Let’s look at a few reasons:
Inaccurate information in the application:
Institutions such as Tata Capital are very particular about the information that you provide in your personal loan application form. If details such as your name, residence, phone number and other account details are inaccurate, it will not be possible to generate the necessary information about you. And without the right information, it is impossible for banks or financial institutions to approve your personal loan.
Low CIBIL score:
CIBIL score is very important to ascertain what kind of a borrower you are, and approval or rejection of personal loans largely depends on your CIBIL score or credit score. After you apply for a personal loan, one of the first things that lenders such as Tata Capital will do is to check your credit score. If your CIBIL score is above 700, it is considered a good score, making it highly likely that you will be given a personal loan. If it’s below 700, it’s a cause of worry. You can check your CIBIL score online before you apply for a personal loan to get an idea about what lays ahead.
Basically, your personal loan repayment capacity should be high. When banks or financial institutions such as Tata Capital process your personal loan application, they check whether you have an appropriate regular income through a job, profession, or business. If your income is lower than the criteria or if it is not steady enough, the chances of you getting a personal loan are dismal. Therefore, whether you are employed with a company or self-employed, you should have enough proofs to show that you do have a steady income. That will ensure that you have a personal loan repayment capability.
Existing pending loans:
Take a loan only when you really need one because too many existing pending loans decrease the chances of your personal loan application to be approved. And you cannot hide such information from banks or financial institutions such as Tata Capital because they can access your financial profile, and check if you have availed loans from third-party sources. Also, make sure you pay your EMIs on time, else institutions consider you as a non-dependable customer, and there are chances of your personal loan application being rejected.
For every bank or financial institution such as Tata Capital, there is an eligibility criterion for personal loans. If any of the parameters such as income level, age, credit score, nationality or educational qualification doesn’t match their criteria, they will reject your personal loan. Before you apply for a loan, you can check your personal loan eligibility criteria online. This gives you an upper hand to understand the factors that can help you avail your personal loan and not get rejected.
Well, now that you know what could lead to rejection of your personal loan application, be very careful while filling up that application form, and ensure you have a good credit history, too.