Monday, December 6, 2021
Home Finance 5 Unexpected Reasons for Personal Loan Rejection

5 Unexpected Reasons for Personal Loan Rejection




An incredible amount of research goes into applying for a personal loan. Applicants study the length and breadth of the financial market to locate the most appropriate personal loan for them. They compare the terms and conditions laid down by personal loans offered by various banks and lending institutions.

Personal Loan Rejection

The objective is to get a loan with as low an interest rate as possible. This can be done after careful consideration of various personal loans and once applicants calculate personal loan EMI. Some of the factors required to approve a personal loan are a good credit score, stable income, no default record, and existing financial liabilities. But what about the reasons for the rejection of an application? Here are some of the most unexpected reasons why personal loans are rejected –

Signature mismatch

Ensure that the signature you use is uniform across all personal loan documents, forms and papers. Of course, no two signatures can be identical in every aspect since they are executed by hand. However, you should not have changed your signature entirely. Make sure all signatures are as close to each other as possible. Any mismatch can lead to a rejection of your personal loan.

Lack of NOC from the previous lender

If this is not your first personal loan, you will be required to close your previous one and obtain a no-objection certificate (NOC) from the previous lender before getting a new loan. The lender you are presently approaching will reject your personal loan if your NOC is missing. The NOC will be reflected on your CIBIL report, and the lender will carry out a check of this report. Ensure you secure this document before you apply for a fresh personal loan.

Errors in the credit report

Your credit report records all your previous loans, credit cards, and repayment statuses. Your past track record shows the bank whether you have the capacity to repay an upcoming loan. Your credit score also depends on your personal finance hygiene. A lender will decide to grant you a personal loan based on all these factors. In fact, the rate of interest applicable to your loan amount will also be informed by your credit score.

Your credit report contains all information about your finances, and any errors in this information can lead to the rejection of your application for a personal loan. Check if closed accounts are shown as open, PAN and address details are accurate, and repayments are correctly recorded. You must review your credit report properly before applying for a fresh loan.

Bank’s defaulter location list

Banks keep lists of locations and addresses of the applicants who are more likely to default on loans than others. Unfortunately, if you live in such a location, the chances are that your personal loan application will be rejected. All your other documents and credentials may be in place, but this particular detail can derail your personal loan application.

Unstable source of income

Banks and lending institutions may reject your application if your income is unstable. Lenders grant loans to applicants who have stayed in a job for longer than a year, indicating income stability. Banks tend to be reluctant in extending personal loans to individuals who frequently switch jobs, are freelance workers, or are pursuing other careers that offer unstable income.

Conclusion

When researching for a personal loan, remember to check off items on both the dos list and don’ts list. Assess your credit score and spot in advance any reasons why your personal loan application may be rejected. To avail of a personal loan with minimal processing fees such as the one offered by Finserv MARKETS, such due diligence is necessary. Upon successful application, you can get up to Rs. 25 Lakhs in a personal loan with interest starting at 10% per annum.




Irving Frazierhttps://tessla.org
Future teen idol. Devoted communicator. Typical student. General analyst. Alcohol expert.Earned praise for training inflatable dolls in Deltona, FL. Was quite successful at building Virgin Mary figurines in Fort Walton Beach, FL. Had moderate success testing the market for saliva in Washington, DC. Earned praised for my work testing the market for basketballs in Fort Lauderdale, FL. Earned praised for my work importing teddy bears in Gainesville, FL. Spent the better part of the 90's developing shaving cream in Jacksonville, FL.

Most Popular

Check Out The Profile of Dr Inder Deep at Inc42

Nowadays, with more and more people trying to start their own business, the concept of 'digital coaching' has gained immense popularity. Many in the...

Why Choosing A Second Hand Electric Car Over A Traditional Car A Better Option In 2021

Climate change has become a severe issue, and India is the fourth largest emitter after China, the US and the European Countries. Working towards...

Pipe Material Options: Choosing the Right One

When you plan on adding plumbing to your building or facility, the first question that should pop up is what piping material to use....

Shopping for Car Insurance? Steer Clear of These Myths

Car insurance is a legal mandate as per the Motor Vehicles Act. This act makes it compulsory to purchase an insurance policy for all...