Find The Reasons
People look at the personal loan for a wide number of reasons. Hearing a rejection from the bank can be overwhelming. It is a serious blow to your financial plans. Rather than just blindly approaching another lender to seek approval of the personal finance, it is important to dig out the reasons for your unsecured personal loan rejection. Each lender has different criteria to approve the loan but, the basic requirements like credit score, job stability stay same in most of the cases. Know the reasons behind your unsecured loan rejection and take necessary measures to correct them and increases the chances of loan approval. Taking preventive measures will keep you away from facing the loan rejection again.
There is high demand for personal finance due to its versatile nature. Banks have no restriction on the purpose which it can be used. These loans are unsecured and approved in short time aiding your financial emergency. Facing rejection for these loans leaves you in great disappointment. Here are a few reasons why your personal loan is rejected from banks.
As these unsecured personal loans are unsecured, banks/ lending institutions take your credit score as a prominent criterion to sanction the loan. Most of the lenders have a minimum credit score requirement which you have to adhere to avail the loan. If you have a poor credit score, the chances of your personal loan approval are very less. You can obtain a free credit report from the credit rating agencies and take measures to improve it to avoid rejections in your next appeal.
As stated above, these personal loan is unsecured. No doubt, the lender is at high risk while issuing the loan. The loan approval is based on your ability to repay the loan for which job/ business stability becomes more important. The lender looks at your stable income and mandates you to oblige the requirement of continuing the job/ business at least for three years before applying for the loan. They also look at the stability of the company that you are working in to ensure you have a regular income that enables you to repay loan.
Borrowers keep approaching different lenders to apply for personal loan as they face rejections. The unknown fact is that, once your loan gets rejected with the lender, it gets recorded in the credit report and is the warning sign for other lenders about the risk of approving the loan. If you face the personal loan rejection from lenders, it is not advisable to approach the other immediately before knowing their requirements. Facing the second rejections will impair your chances of getting the loan further. Know the reasons behind the loan rejection and take effective measures to correct them.
If you are tenant who want to apply for personal loan, check your residential address is in the defaulters list before you apply for personal loan. In such cases, your loan application will get rejected deeming you as defaulter of loan. Submit proof about the time period of your residence in the home and rise your chances of loan approval.