Bussiness

Bank loan: What are the reasons behind loan rejections? Know important parameters

Banks and financial institutions offer different types of loans to consumers. The loan amount for various purposes attracts a certain interest rate. The bank collects the loan amount from customers in the form of an Equivalent Monthly Fee (EMI) for a predefined period. However, getting a loan sometimes becomes a challenging task due to lack of proper documents, low credit score and others. As a result, institutions reject loan applications. We will tell you key things to keep in mind when applying for a loan:

Employment

Loan repayment is only possible when he/she has a stable job/business. The source of income must be stable so that the loan amount can be repaid within the time period. Banks consider your job very important and the stability of your income ensures that you will repay the loan on time. People who change jobs regularly, or those who are unemployed for long periods, may not be able to get loans easily.

credit score

When you apply for a loan, the first thing any bank checks is your credit score. The credit score indicates whether the person repays the loan on time or not. If your credit score is low (600 or below), it may be difficult for you to obtain a home loan.

If a score of 700 or higher is considered good and your chances of getting a loan are very high. Indian banks take credit score data from CIBIL.

Inaccurate details in the app

If the person applying for a loan has details such as residence, phone number and other account details that are inaccurate, it will be difficult to generate the necessary information about you.

Property not approved by financial entities

If you have applied for a loan to buy a property and the builder is not approved by financial institutions. Then the loan will not be granted.

outstanding loans

Banks also access the financial profile of loan applicants, even if the person has taken a loan from third-party banks. This is why it is advisable to use the loans only when necessary and ensure timely payment of installments. If you have multiple loans in progress, your chances of getting a loan decrease.
To successfully approve a loan application, make sure that current debts are paid and that you have a stable financial profile. Loan seekers can also check the eligibility criteria on the official website of the banks.

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