2023-12-31 18:04:33
When Your Loan Application gets Rejected
Everyone from the common people to the upper classes get loans in one way or another according to their needs. So when we try to get a loan from the banks, there is a possibility that our application will be rejected due to many reasons.
Generally, our loan application is rejected due to some inconvenience or when the details of late repayment of the loan that we have already received are revealed through CIBIL score.
So if your loan application is rejected, you should do things to avoid such problems in future.
A rejected loan application can seriously affect your credit score. It may take months to years for you to recover from it. Now let’s see what steps we need to take in such a situation.
Find the cause: Find out the reason why your application was rejected. Banks will usually let you know the reason. For example, low credit score, insufficient income, previous credit history, late repayment of previous loan, difficult employment or any deficiency in your collateral assets may result in loan rejection.
Your PAN number may be mistakenly linked to someone else’s loan. That too can lead to rejection. So find out and fix it.
Timely debt repayment: Take steps to repay the previous outstanding loan on time. Pay the monthly installments on due dates. This will help your credit score to improve again. At such moments there is a chance of getting a big loan.
Debt-Income Ratio: Banks don’t want more than 30 to 40 percent of your income to be used for loan repayments. So they will examine the previous credit and current income status. However, if your income increases you can get new loans.
Document Verification: You need to check the documents like Aadhaar number, PAN number, signature, address, name etc. that you are filing. Any errors in this may result in your loan being rejected unnecessarily.
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