We have learned that if we have good source of income and have decent credit score, we can get loan without much difficulty. But this is not true every time. There are few reasons which can go against us to get a loan.
Let’s take a look at this example first:
Devarsh Patel, 28, is a freelance content writer. He is making handsome money, paying all of his bills & taxes on time and has a healthy CIBIL score.
Unfortunately, when he applied for a personal loan, his application was rejected. At present, he is not able to find a lender, who can extend a loan to him.
You might have heard similar stories in your social circle. To resolve your queries, we have compiled a list of reasons for rejection, which can be the reason for rejection.
Some customers have a habit of taking too many loans at the same time. Generally, if a person is already paying 50% or more of his income as EMI, then his new loan application is most likely to be rejected by financial institutions.
If your loan application was rejected in past, then it will remain in your credit history forever. This act will always seen negatively by the lender.
Bad CIBIL history
In cases of financial crunch, sometimes borrowers are not able to repay their EMI of loans/credit card. It will lead to remarks like written off, settlement etc. These types of remarks can hamper your chance of getting a loan in present and also in future.
Guarantor of a defaulted loan
Usually, people blindly sign the loan documents & become guarantor of the loan of someone known. When the primary borrower is failed to repay the loan, and then the guarantor is supposed to pay the remaining amount on his behalf. In such scenario, your loan won’t get approved, if you apply for loan.
Co-applicant’s poor credit history
For increasing loan amount eligibility, the lenders advise to take co-applicant to borrow a loan. Your loan application may be rejected or will be offered a less loan amount if your co-applicant is having a poor credit history.
Address matching with defaulter
If someone else has lived at your present address in the past and has defaulted then in such type of event, it can have the bad impact on your loan application. In this case, in lender’s database your address will be matched with defaulter’s address’ data.
Similar details matched with the defaulters
Sometimes few personal or professional details (name, age, address, employment details) of borrowers are matched with defaulter’s profile. It will create confusion in mind of credit manager & your loan application can stuck for a longer period of time even without you being at any fault.
All the lenders look at your credit score before deciding on a loan, when you apply for a loan/credit card. So, it is very important for everyone to get the clear idea of your credit score & its technicalities.
If you still have any query related to Personal Loans, then you can get free consultation here.