When you apply for a loan, there is no assurance that your application will be approved. In addition to this uncertainty, you need to remember that every time your application is rejected, it negatively impacts your credit score. There are some common reasons for your application to be rejected. Here are five points you may consider to ensure your loan application is approved:
- Check your credit score
Your credit score may be low even if you have never defaulted on a loan installment or been late in paying the credit card bill in the recent past. However, delays and defaults for previous five years are listed on your file and affect your score. Another reason for a lower score could be, that you have enquired for multiple loans in a short period of time. You must check your credit score and ensure that there are no errors to reduce the possibility of your personal loan rejection.
- Ensure you have adequate income
Lenders require you to have a minimum monthly income when you apply for the loan. If you do not meet this eligibility requirement, your loan would not be sanctioned. In addition, if the lender considers your income to be insufficient to pay the Equated Monthly Installments (EMIs) on time, your application may be rejected. Ensuring the adequacy of your income before you apply for a personal loan is recommended.
- Give accurate information
In case, the lenders find incorrect information on your application or if there are inconsistencies, they may reject your loan application. It is important you thoroughly check all the information before submitting the application to avoid rejection.
- Check the lender’s employment requirements
Financial institutions are meticulous about your employment history and stability while approving your loan. Several lenders require that you have a stable job for a minimum number of years to be eligible for a loan. You need to submit your income proof documents when you avail personal loans online or through a branch. It is recommended you check the eligibility criteria before applying to prevent rejection.
Leading non-banking financial companies (NBFCs) offer personal loan at affordable interest rates. The NBFCs have flexible eligibility criteria and easy processing, thereby ensuring quick approval. You may consider the aforementioned factors and apply with an NBFC to ensure your application is approved.