A Personal Loan is a fund you borrow from a bank or other financial institution and pay back with interest in the form of equated monthly instalments (EMIs). The lender fixes your loan amount, loan term, interest rate, and processing charges based on factors such as your CIBIL score, past repayment record, other obligations, and earnings.
Applying for a Personal Loan from a leading bank is a huge step, and rejection can tingle for several months. There are any attractive Personal Loan offers available in the market. HDFC Personal Loan is one among those options. If you wish to boost your chances of approval before you put in an application, or you have applied and already faced the negative response, then it pays to rake through your application and know exactly what your credit report says.
Tips to Avoid Personal Loan Rejection
Here we are particularly looking to deal with the different issues leading to your Personal Loan rejection. Once the request has been logged in, there are some background processes that occur based on which the loan application request is rejected or approved. Following are some basic points that need to be considered to avail a Personal Loan.
- Credit Score: Your credit score must be a minimum of 700 to be considered for Personal Loan approval. This is the main reason why every person must know their credit score prior to the submission of an application because if your request is rejected one time, it may take a while before you will be able to apply for a Personal Loan again.
- Documents Mismatch or Fabrication of the Document: When customers are in desperate need of funds, they tend to lose view of what is at risk when they forge documents such as salary slips in order to be eligible for the loan. In fact, lenders are not that simple to trick around with. Lenders will verify each document carefully before approving your Personal Loan application. If they notice any issues, they will report it to the credit bureaus and you will not be able to Get a Personal Loan ever again.
- Going Beyond Your Repaying Capacity Limit: This happens when the person applies for a Personal Loan; however. For every person, only some portion of their earnings can be spent towards paying EMI while the remaining is required for livelihood expenses. If the consumer is already paying other loan EMIs, then lenders tend to analyse such cases carefully.
- Don’t Provide Wrong or Incomplete Information:: Make sure that every detail you provide regarding your financial and personal life, is 100% accurate. Else, your credit score may take a toll and your loan request will get rejected.
- Credit Card History: Having no Credit Cards or no loan accounts also make banks cautious. If you don’t apply for any loan and don’t even own a Credit Card you will not have any credit history, which may reduce your chances of getting a loan approval.
Things to be considered before applying for a Personal Loan:
- Limit your requests for loan: When you put in an application for a loan, the request is counted as an inquest on your CIBIL report. Multiple loan inquiries and applications can affect your CIBIL score in a negative manner, which could result in loan rejection.
- Check your credit score: You should keep an eye on your credit score to make sure each and everything is correct and updated. If there is any error, inform it to the concerned credit bureau and get it rectified immediately.
- Pay your EMIs and bills on time: Pay all your EMIs and utility bills on time without a miss.
We hope that the tips mentioned above will help you with successful loan approval.