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September 3, 2024
Remember, a Personal Loan Rejection from one Bank doesn’t mean a blanket rejection. There’s always a chance for approval from another bank. Staying hopeful and exploring your options is crucial, as this resilience can lead to success.
Have you ever applied for a Personal Loan and been rejected? It’s a shared experience. Many of us have felt the surprise and confusion of rejection, even when everything seems to be in order. You’re not alone in this. It’s a common situation that many people find themselves in.
On the other hand, customers with an aberration in their CIBIL record may feel it is no big deal if they have not paid their Personal Loan EMI on time for a short period but are currently on track. Let us look at situations when one lender rejects your Personal Loan, which an alternate financer can approve. Remember, there’s always a chance for approval from an alternate financer, so don’t lose hope. Keep in mind your financial journey is not over yet.
Before Applying for a Personal Loan, it is crucial to confirm that your company is approved per the bank’s policy. Lenders want to be sure the company is solvent and will pay salaries on time, so they prefer to fund employees of approved concerns. Refer to the HDFC Bank Company Category List of approved companies, which most lenders acknowledge. Most lenders will process your loan if your employer is listed on the list, reducing the risk of rejection.
Don’t limit your options to just one lender. You can check with an alternate lender to see if your employer is featured in their company category list. Some financiers, such as ICICI Bank Personal Loan and YES Bank Personal Loan, process Personal Loans for applicants employed with non-listed companies. By exploring these options, you can increase your chances of getting your Personal Loan Approved.
Your CIBIL Score or history details all credit used and repayment patterns. The bank checks the customer’s credit history to seek assurance that the applicant will repay the loan on time. Some lenders prefer only to fund applicants with a sound credit history and have regulated a minimal CIBIL Score for processing a Personal Loan Application. The acceptable score for most Banks ranges from 700 to 730 points. If your CIBIL Score is below the lender’s required benchmark, the application is rejected after the CIBIL inquiry. Understanding your CIBIL Score and credit history is crucial, as it can help you make informed decisions and improve your chances of loan approval.
If you are a first-time credit seeker and have not used a Credit Card or taken a loan, your CIBIL will reflect as a nil score. Look out for lenders who do not require a CIBIL Score to process a Personal Loan. Apply for an HDFC Bank Personal Loan, as the HDFC Bank processes applicants’ loan requests without a CIBIL Score.
Keeping a Tab on your CIBIL Score is a good routine if you have previously used Credit. Before Applying for a Personal Loan, check your CIBIL Score to see if it is acceptable to the particular Lender. For a YES Bank Personal Loan, 730 points are the minimal basis points that the YES Bank considers when processing a Personal Loan. Check your CIBIL Score before Applying for a Personal Loan to avoid delays and a denial.
Verifying a customer’s residence and office premises is mandatory to approve a Personal loan. Most banks and NBFCs outsource the verification process to a third party. The application could be declined due to a verification failure for the following reasons.
The Personal Loan is unsecured and forwarded without any security therefore, it is vital to the Bank that the customer is contactable in case of non-payment of dues. The verification, therefore, is an essential part of the process. To ensure a successful verification, take note of the following:
Banks keep records of all Personal Loan Applications processed, and the result is noted. If your application has been declined due to a discrepancy in the documentation or if the Bank has recorded your documents as suspicious or not genuine, this will show up the next time you apply. Your request will be declined in the primary stage of the process.
When You Reapply, The Bank Will See the Reason for the Decline and Process Your Application Cautiously
Try to clear your previous record with the Bank that denied your application. Ask the Lender to reopen the last delinquency issue, such as when your PAN Card was declared invalid. Be ready to show them your original document and clarify the issue. If funds are needed urgently, apply with an alternate lender with whom you have an excellent previous relationship.
The Personal Loan Application is rejected if the Bank feels that you cannot afford the monthly instalment for the loan amount applied, as per the calculations for financial eligibility. Lenders have a policy for calculating the funds that can be issued as Personal Loans. The basics include:
If the applicant has an excess of EMI being paid or the salary is insufficient to afford an extra EMI after the monthly expense, the Bank will not approve the request.
If a lender rejects your application if the criteria for financial eligibility are unmet or you are declared overleveraged, you can work on creating surplus eligibility. First, check the following:
In Conclusion, prevalent Banks today that issue Personal Loans have similar policies, but they differ on some fundamental policies. Our experience and in-depth knowledge of the policies of prominent Banks and NBFCs can help and guide you, so do not take a Personal Loan Rejection from one Bank as final. You can fulfil your Personal Loan needs by applying to the right lender.
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