Getting a Personal Loan has become easier than ever due to the wide availability of online Personal Loan applications. Since consumers are looking for easier and more convenient loan application processes, various banks, lending institutions, and non-banking financial companies (NBFCs) are offering online applications. Through this, you can apply for Personal Loan online from the comfort of your home and office.
However, many individuals face rejection when they apply for a Personal Loan online. There are various reasons behind Personal Loan rejection. In this blog, we will look at some of these reasons to get you loan-ready.
- Low bureau score: Your bureau score is one of the most critical factors in the Personal Loan eligibility criteria. A bureau score above 700 and 750 is considered healthy. In case you have a poor bureau score, your application will get rejected. Lenders consider a bureau score above 750. Ensure that you maintain a healthy bureau score to avoid rejection. In case you have a low bureau score, you can improve it by paying your dues on time, having a good credit mix, and rectifying errors in the report if any.
- Debt-to-Income ratio: While your bureau score is important, your credit utilization and monthly income are also considered by lenders. Your monthly income is considered to help lenders determine your repayment capacity. Since Personal Loans are unsecured, lenders do not have any collateral to recover their funds in case of default Hence, your monthly income plays a huge role in determining your repayment capacity and Personal Loan eligibility. If your yearly income is low, lenders might feel that you may default on the loan. Maintain a good debt-to-income ratio to avoid loan rejection.
- Errors in the credit report: If you have any errors in your credit report, you must get them rectified immediately. These errors not only bring down your bureau score but also make you appear as an unreliable borrower in front of lenders. This will make them apprehensive about approving your loan request. While applying for Personal Loan online, make sure to check your credit report and get errors rectified.
- Incorrect information on loan application: Your loan application needs to be on-point and with the correct information as it is the first thing that lenders check. Incorrect information on your loan application might result in the rejection of your loan application. In addition to this, it is also important to submit all the required documents. Missing documents will reduce your credibility.
- Credit utilization: Since Personal Loans come with no end-use restrictions, borrowers prefer to use them for a variety of purposes such as home renovation, hosting a wedding, buying high-ticket items, and planning overseas travel. However, if you put a business-related purpose in your online Personal Loan application, there will be a conflict of purpose which might lead to rejection. Besides this, if you have multiple ongoing loans, lenders might think of you as an irresponsible borrower. Try to end your previous debt before taking up more loans.
How to apply for an instant Personal Loan online
Online application processes have made it easier for borrowers to avail of funds through a Personal Loan instantly. Before choosing a lender, research your options and choose the one that is offering you the lowest interest rates on Personal Loans. Follow the below-mentioned steps to apply for an instant Personal Loan online.
- Visit your lender’s official website
- Click on the page for ‘Personal Loans’
- Go through the eligibility criteria and required documents
- Fill out the application form with your correct information and make sure there are no errors
- Upload the supporting documents
- Submit the application
- Wait for verification and confirmation of your loan request
- Get funds disbursed instantly into your account
Personal Loan eligibility criteria
- Age: The applicant should be at least 24 years old at the time of applying for the loan and not more than 58 years of age at the time the loan matures.
- Citizenship: The applicant should be compulsorily an Indian citizen only.
- Employment: The applicant should be full-time employed with the state or central government, PSU, MNC, Listed, Unlisted Public Ltd., Private Ltd., LLP, colleges and schools, or companies that are listed internally.
- Work experience: The applicant must have job experience of at least 24 months, with at least half a year of stable employment with the current employer.
- Monthly income: The applicant needs to have a net monthly take-home earning (salary) of a minimum ₹40,000.
