1. Finance

5 Reasons why your online personal loan gets rejected

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Personal loans are one of the best ways to get rid of all the financial crunch and to meet the immediate requirements of the cash. Getting an online personal loan is easy and hassle free and it does not require any collateral. However, sometimes due to some reason your loan application might get rejected. Hence to ease this, we have curated a detailed list which will explain why your loan has been rejected. Keep reading.

Here are the lists of the factors that can lead to the rejection of the online personal loan application: 

1.  If you have bad Credit Score or history

Credit score is one of the main reasons for the rejection of your online personal loan application. It might only be because you have a bad or nil credit history. Having a bad credit score can create a big problem for you. Banks and financial institutions consider a person with a bad credit score to be a high risk because they have shown a tendency to default in the past. Thus, your personal loan application will be rejected by banks or lenders if you have a bad credit score or history.

It is suggested that you must maintain your credit score and keep checking on it. For that you can check your credit score from Buddy score to know your credit situation.

2. If your income is Low

 You must know that banks and financial institutions consider your income just to check your ability to repay the loan amount. If you earn less than and the personal loan amount is bigger than your loan application has a chance of getting rejected. Hence in such a situation you must try to apply for a loan amount that is low.

3. If you incorrectly fill out the details in the document

 Banks and lenders evaluate your information or paperwork before accepting your personal loan application. If you provide any erroneous information or submit any incorrect documents, the bank will almost certainly reject your loan application, negatively impacting your CIBIL score in the future.

4. If your job is unstable

Another important reason for the rejection of your personal loan application is stability. Many banks and loans take into account your work and home stability. Banks will not consider you suitable for a personal loan if you move jobs often, such as every six months. However, the same may be said for your home.

5. If you have a lot of loans that are pending.

Even if you have taken out loans from third-party banks, banks can access your financial profile, which is why it is best to take out loans only when absolutely required and pay off your debts on time. Your chances of securing a personal loan are reduced if you have many outstanding loans with banks and NBFCs.

 Conclusion

It is essential to be aware of these variables in order to prevent personal loan rejection. To make yourself qualified for an online personal loan, avoid making these faults or errors. However, various banks have different loan rejection criteria, so study the terms and conditions carefully before applying for a personal loan at a bank. You can avail an online personal loan from Buddy loan. They are the most trusted aggregator in India that provides flexible and instant personal loans.

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