A Brief Overview
While unfortunate, there could be many reasons why a personal loan you apply for gets rejected. Personal loans are ordinarily approved for those borrowers that can furnish a good credit score, have limited financial liabilities, have a good income, and don’t have any records of defaulting any payments owed by them.
If these factors don’t hold for a borrower, their personal loan application can be rejected. That being said, there are also several more minute reasons owing to which a personal loan application could be rejected. Because these reasons are more minuscule and not always easy to catch, applicants might neglect them. That being said, lenders may catch them and choose to reject the application. Read on to understand what these unexpected reasons for personal loan rejection are.
5 Unexpected Reasons for Personal Loan Rejection
Unexpected reasons owing to which personal loan applications can be rejected are as follows.
Reason #1. Signatures don’t match
Availing of a personal loan is a serious matter and involves using a uniform signature across the entire application. However, you can slip up and inadvertently sign differently in different places. It is important to be careful and make sure you consistently sign in the same manner across the application for your loan to be approved with ease.
Reason #2. Credit report errors
Errors in your credit report can hinder your chances of getting approved for a personal loan. These errors can pertain to the incorrect reporting of payments, showing accounts that have been closed as still open, incorrect personal addresses, the wrong PAN, and so on. You must make it a point to check and review your credit report periodically. By doing so, you can spot any errors and have them corrected on time such that you avoid the chances of your loan being rejected.
Reason #3. Forgetting to get the NOC from a previous lender
If you have closed a previous loan and are now seeking a new one, it is important to ensure you have availed of a no-objection certificate (or NOC) from your previous lender. In case you haven’t, your loan application can be rejected. If the CIBIL report about your credit history does not feature a no-objection certificate, it can be problematic. Lenders are strict regarding following rules and regulations about disbursing new loans and will always expect you to furnish a no-objection certificate if you have borrowed funds in the past and returned them. It is, therefore, a must to have a NOC.
Reason #4. Inaccurate details
Personal loans can be rejected on the ground of incorrect details being submitted by borrowers. Because personal loans are unsecured, each of the details about yourself that you submit to your borrower is pored over and verified for authenticity. If they are incorrect, your loan can be rejected. It is, therefore, important that you fill out your loan application with care.
Reason #5. Lender’s Defaulter Location List
Although this might sound odd, lenders often have a list of locations that stem a high list of defaulters. This list mentions locations, and those who seek to borrow funds from those addresses tend not to repay loans. Should your address fall under a location your lender has deemed a defaulter’s hub; you might find that your loan is rejected owing to the same.
Always submit your personal loan application after spending ample time on your application and filling out details with care. Understand the personal loan eligibility such that you know whether or not you cut the same. Also, consider looking into Aadhar card loans which serve as a form of personal loans. Visit Finserv MARKETS for more information.