The no-collateral feature of a personal loan makes it one of the most sought-after forms of a loan; because it can be used to meet any immediate financial needs, be it, wedding, home renovation, or travel. While applying for one is easy, getting approval on the loan application process could be daunting because it depends on several factors.
Let’s check out some reasons for the rejection of a personal loan application:
Poor Credit Score: To evaluate a customer’s creditworthiness, banks perform a check on CIBIL scores. Maintaining a credit score of 700 and above helps you get approval. Avoid overusing your credit card and making erratic loan payments. Pay off outstanding dues. However, StashFin offers personal loans even with a low credit score; you can repay on schedule and improve your credit score.
Multiple Loan Enquiries: Lodging multiple inquiries within a short period can lead to your loan application being rejected. Because you may be perceived as someone who is credit hungry or someone who is always dependent on borrowed money. This can affect your credit score negatively. So, before applying for a loan ensure to conduct proper research and compare your options in advance.
Existing Debts: If you have too many credit cards debts and outstanding loans, it’s best to clear them all before applying for a personal loan. Because the lender may perceive you as someone overburdened with credit, which may result in your loan application being rejected. With StashFin, you can apply for debt consolidation personal loans to clear all your debts, and further you can reprice the loan amount with a good repayment history.
Eligibility Criteria: Sometimes your annual income might not match the minimum income requirement defined by the lender, this might result in the rejection of the loan application. At StashFin, you can avail a personal loan with a minimum salary of Rs. 18,000 per month. This can be done by submitting minimum documents like salary slips and bank statements through their quick online form.
Unstable Employment: Financial institutions prefer businesses with consistent income and individuals with stable employment. Quitting or switching between jobs frequently will not only result in loan applications being rejected, but lenders might even end up charging higher interest rates.