You decided to go on that vacation you have always wanted and applied for a personal loan to fund the same. However, it comes as a rude shock if the bank turns down the application. While there are many lenders who offer personal loans today, they are getting more cautious about whom they give money to. The criteria for getting an approval varies for every lender, but there are some common underlying principles that lead to a rejection of your personal loan application
Credit Score: A bad/nil credit history (which in turns results in a bad credit score) is one of the biggest reasons for rejection for your personal loan applications. Lenders shy away from giving loans to people who have in the past showed a tendency to default in the past.
Low income: Lenders access your ability to repay the loan based on your income. If the EMI of the loan amount you wish to avail is greater than a certain percentage of your income, it is likely that loan will be rejected. It may be prudent to apply for a lower loan amount in these cases. You can also consider adding a co-borrower to increase the eligibility
Stability: When approving your personal loan application, lenders look for stability and consistency in your job and residence. If you switch jobs very often or have been in your current job for less than 6 months, the loan will most likely be rejected. The same applies to your current residence.
Incorrect Details: The lenders verify the details that you provide at the time of applying online or submitting a paper application. Any discrepancy in the data provided may lead to a rejection of the application. It is best to provide all information correctly and verifiably.
You can check if you are eligible for a personal loan by providing a few details and applying online on RupeePower