Whether you are a first-time loan borrower or someone who has already been on a financial journey, nobody wants a personal loan rejection, right? After all, a rejection will not only hamper your credit score, further damaging your CIBIL Report but makes your loan profile weak in the eyes of lenders for future borrowings as well. So, how to avoid personal loan rejection to stay away from such a situation? Read the post below.
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1. Compare Banks: The first step towards a hassle-free personal loan journey is the comparison. Start comparing the top banks and choose an ideal lender based on your personal loan eligibility. If you follow the same practice, there are fewer chances of you sending multiple loan applications to various lenders. Yes, because doing so will show your credit hungriness and brings your credit score down. Thus, could lead to personal loan application rejection. When it comes to comparison, it would be advisable to compare banks on many parameters like:
- Interest Rates
- Loan Amount
- Processing Fee and Other Charges
Doing so will help you in the long run as availing a loan is a journey of many years. And, once you are satisfied with a chosen bank only then you should proceed ahead with the loan proceeding.
2. Decide How Much Money is Required: It would be advisable to do some homework, prior to applying for a personal loan. Know your needs or desires and then decide the exact amount you are looking for. Usually, people end up taking a higher loan amount, couldn’t repay later due to extra financial responsibilities. Thus, be clear in your mind as it will also avoid the extra loan burden.
3. Calculate Your EMIs: Loan borrowers usually get impressed by just looking at the interest rates, forgetting that calculating your EMIs is equally important here. Do some maths before saying yes to a bank for personal loan just to know whether the EMIs will be easy on your pocket or not. After all, it is a monthly amount that will be debited from your account. Thus, it should be pocket-friendly.
4. Check your Eligibility: It is a wise move, to check your loan eligibility to minimize the loan rejection possibilities. Before applying for a personal loan, always check the required eligibility norms and know whether you are eligible for a loan or not. Lenders usually check the eligibility of a borrower on many factors such as:
Eligibility Criteria for Personal Loan Approval
- Monthly Expenses
- Any Other Loan/Default/Liability
- Job Stability
- Category of the Employer
- Relationship with a Bank
5. Know your Credit/CIBIL Score: Your credit score is a crucial factor that can make or break the deal for you. The lenders always keep an eye on the cibil score as it helps in knowing an applicant financially better. A score of above 700 out of 900 is considered to be good enough in grabbing the best deal for a personal loan. However, different lenders have different conditions as far as the minimum credit score is concerned. So make you check the same to avoid the last-minute rejection.
6. Keep Your Documents Complete: Make sure your documents are handy and ready. Yes, in the case of incomplete documents the chances of personal loan rejection would be high as lenders won’t give approval to that. So be documented ready to avoid the personal loan rejection.
7. Avoid Signature Mismatch: Make sure your signature should be the same on all your banking/KYC/loan-related documents. People usually do this mistake while signing the loan documents which will lead to rejection. Better to avoid this mistake.
8. Do Not Give False Information: Before giving the loan approval, it is a common procedure for banks to do background research of a borrower. So, it is advisable not to give false information/details to the bank to increase your loan approval chance. The online personal loan application should be filled as per the information mentioned in the KYC documents.
9. Stop Checking Your Credit/Cibil Score Frequently: Avoid checking your credit score too often because this activity will show your credit eagerness. As a result, your score will come down from its current state, thus lowering your personal loans approval chances. Maintain a good gap of 6 or 9 months to avoid personal loan rejection.