Personal loans are generally ad hoc credit provisions from financial institutions when in dire need of money for a variety of expenses. They are often short term loans, which provide immediate respite in times of need. They require no collateral; all you have to do to get a personal loan is get approved by the institution and you’re good to go!
Although sometimes, personal loans may get rejected due to a variety of reasons which can cause distress for the loan applicant. Fibe brings you some of the reasons why this may happen, so we can always stay one step ahead.
The approval of personal loans often depends upon your credit history, job profile, current financial situations, employment history amongst others. In some cases, it can also depend upon the city you are living in or if you’re of the right age. Manoeuvring through these conditions is a hassle and people often get stuck in one clause or the other. The requirements should therefore be read correctly and thoroughly before submitting your application. Personal loan apps like Fibe require only basic documents to be uploaded for the loan to be approved within minutes. For approved users, the disbursal is often instant.
Approval of a personal loan also depends upon the credit score of the borrower. In fact, it is one of the crucial factors for your loan approval. The score provides an assessment of your likeliness of paying back the loan amount. Credit scores are measured by agencies such as CIBIL, based on your credit repayment history. A score above 750 is considered to be a good score with almost no chances of rejection. Online personal loan apps such as Fibe, however, adopt a broader approach to borrower assessment, and do not rely primarily on the credit score. The personal loan interest rates by these platforms can be as low as Rs. 9 per day on an amount of up to Rs 2 lakhs.
Creditors look for stability when a person applies for a loan. Frequent job changes often translate to instability in the eyes of the lender. Switching your job multiple times in the past can therefore reflect negatively when being asses for a loan. Some financial institutions may require staying at the same job for a number of years. Therefore, having a stable job with a steady income can only increase the chance of loan approval.
There can often be other binding criteria to become eligible for a personal loan, apart from a steady income and proper documentation. These conditions are often set by the lender and have to be complied with. These can range from being the right age or being in the same city in which the lender operates. These factors are often not in control of the person, but with a virtual loan platform like Fibe that offers instant personal loans online, there is no need to be in any specific city in the country. You can get your quick personal loan approved within minutes via the Fibe personal loan app, which has been downloaded more than 8 million times.
Though obtaining a personal loan is a relatively easy process, frequent borrowing can be a red flag for many lenders as well. This is because the more you borrow, the more are the chances of defaulting which affects the credit score. And since a low credit score is undesirable, it may lead to your future applications being rejected.
All these factors can be avoided by careful reading and understanding of the terms and conditions of the lender. A successful application for a personal loan online enables a person to wriggle out of an undesirable situation, and for that to happen, keeping in mind the above-mentioned reasons can help you get the loan approval you need.
There are many reasons for your personal loan application to get rejected such as not qualifying for the loan as per the terms and conditions set by the lender or not having a good credit history.
If your personal loan is rejected, your credit score may dip, and you may not be able to get the financing you need. However, you can reapply for the loan in time.
You can avoid personal loan rejection by ensuring your income is more than your liabilities, your credit history showcases responsible behaviour, and you meet all the eligibility terms of the financial institution.
Personal loan rejection reasons include not meeting the lender’s eligibility criteria, having a poor credit score, having a high debt-to-income ratio, being unemployed, not submitting the right documents, or due to a mismatch in the paperwork.
Factors that affect personal loan eligibility include:
At Fibe, to apply for a personal loan one should be between the ages of 21 to 55 years, resident of India and minimum in-hand salary should be ₹15,000.
Once your loan application is rejected, you can reapply for it after some time passes or when you qualify for the loan based on the eligibility terms of the lender.
Although you can apply in 1-3 months after your loan application is rejected, it is better to wait for 6 months. This gives you enough time to address the issue. However, you should make sure you find out the reasons for personal loan rejection.
Yes, when your personal loan application is rejected, your CIBIL or credit score dips.