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WHAT ARE THE UNEXPECTED FACTORS BEHIND LOAN REJECTION?

When you take a loan from any lending or financial institution, the first thing they judge is you ability to repay the loan. This evaluation depends upon various things including your creditworthiness. Some of those parameters are borrower’s age, job stability, income and credit score for sure. Therefore, before you "Apply For Loan" it is good to calculate your loan EMI with the help of EMI calculator which will help you to plan your finances well.

Every lender has their own set of eligibility criteria to approve your loan application regarding these parameters. In case, if they find any borrower not eligible in any of these aspects, it will lead to the rejection of their loan application. Here, in this article we will discuss some of the unexpected reasons that will be responsible for the rejection of your loan request. Let’s get a deep dive into them:

  • Poor CIBIL of co-applicant: However, it is really important for every borrower to have a good credit score but if your loan request gets turned down for unforeseen reason then it could be the poor credit history of your co-applicant. So, even if you have good credit score but your co-borrower doesn’t have good credit history, it may be the reason for the rejection of your loan application.
  • Frequent borrower: Lending institutions are hesitant to sanction a loan to the borrowers who already have multiple loans to repay. Approving a loan to such borrower increases the credit debt and can also lead to defaults in future.

Hence, it becomes risky for lender to lend money to such an applicant. However, frequent borrowing can also affect your credit score adversely even if you are repaying it on time. So, if applicant is financially overburdened, lenders conclude them as risky borrowers and reject their application.

  • Frequent job hopper: Career stability plays a key role when you apply for any loan application. Your stability at workspace gives a relief to the lender regarding your repayment capacity. Lenders use to lend those borrowers who are employed in an organization for minimum of two or three years. If anyone doesn’t has a stable job then it will reflect the lender that you are unable to repay the loan in scheduled time and may reject your loan request.
  • Rejected loan application in past: You should not avail any loan if you have already faced a rejection from one or two lenders. The loan rejections get recorded in your credit report and once your loan gets turned down, it may negatively impact your CIBIL. Therefore, try to improve your credit mistakes first ten "Apply For Loan Online" or offline with specific lender.
  • Irregular tax return history: It is one of the most significant factors in your loan rejection because lenders prefer to approve the loan to those applicants who have filed their income tax returns regularly in past years. To ensure themselves, lenders check your past two years IT return slips. If you hadn’t paid regular taxes in past two or three years, you loan application may get rejected.


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