It is very dejecting when our personal loans application gets rejected. We get upset and irritated. But before approaching another bank for a Loan we should know why our Loan was rejected. Banks also need Loan takers to keep their flow of money alive. Defaulting in loan instalments can affect their liquidity. That is why banks play very safe when it comes to personal loan or credit card.
Why do Personal loans get rejected?
Poor credit history
Purpose of taking loan is not clear
Giving wrong details to the bank
Not into confirmed job
Have multiple loans
You share your residence with a defaulter
Loan Guarantor is a defaulter
One thing we must understand is that when the Loan application gets rejected, it gets recorded in your CIBIL record which can cause you a problem in future if you apply for another loan or a credit card.
In such a situation the best thing you can do is to wait till you get another loan offer from another bank so you can correct the mistakes you have committed before. Don’t apply to multiple loans in multiple banks. It increases the chances of your loan forms getting rejected.
Tips to avoid your loan from getting rejected:
Do some self assessment of your finance and check, if you are ready for another liability.
Check your CIBIL score and if there is any ambiguity ,correct it.
Try to close your loans.
Keep cash as a backup.
Lower the amount you need to take as a loan.
Try to go for a secured Personal Loan.
Double check your details before submitting application form.
Apart from these you can also verify with banks if they really require a good credit history. In such case you can withdraw the idea of taking loan from that particular bank and approach some other bank if you do not have a good credit score.
You can check with lenders if there is any minimum requirement of income as each lender has different requirement. So, instead of blindly filling the form and submitting it and regretting, it’s better to check with different lenders. Then according to your budget you can apply for a loan.
Before taking any kind of loan it is necessary you have a good knowledge of interest rates of big banks so that you can understand if you are capable of paying those EMIs every month.