Banks will have multiple reasons to reject your loan application, though they are there to help you on providing the money but still when it comes to complying with the rules and regulations they make sure that the applicant fulfills the basic eligibility criteria for applying for a loan. In case the lenders or the banks find that you don’t fulfill the eligibility criteria, then they will reject your loan application. Ensure you comply with the bank rules and regulations as each bank has different rules to follow.
Below are the few reasons why lenders turn down your loan request
1. Previous loan rejection: If your loan got rejected previously, don’t try applying with other banks, rather know the reason behind the rejection and work on those reasons. Applying immediately after getting rejected will again lead to rejection. CIBIL records your loan rejections, so, don’t apply immediately for the loan if it gets rejected.
2. Your co-applicant is your sibling or a friend: Your siblings or friend being a co-applicant for a joint loan could be the reason for your loan getting rejected. Many banks do not consider the loan application if the co-applicant is your brother or sister or friend. They take this as a reason to reject your loan application. To not get your loan rejected, choose your parents as your co-applicant and for married people, your spouse as a co-applicant will help you from not getting the loan rejected by the banks.
3. Frequent change in the jobs: Your frequent change in the jobs can be the reason for banks to reject your loan. They provide you a loan upon seeing your stability in your job because an employed person will repay the loan amount on time. If you are a frequent job hopper then banks do not consider you as a person who pays the loan amount on time. You should at least be working with a company for a minimum of about 2 years in order for the bank to approve your loan amount.
4. Being a Guarantor to a defaulted loan: If you have signed as a guarantor on behalf of someone who has taken the loan and the borrower has defaulted his payment, then this impacts the CIBIL score of both the borrower and the guarantor. Even if you are not directly related to the borrowed money, your CIBIL score will still take a toll. So, make sure you give guarantee to a person whom you think will repay the EMIs on time.
5. Bad tax history: At the time of applying for a loan, you need to submit a few documents in which you also need to submit your past IT return documents. If you did not pay your income tax returns regularly then that can be a reason for your loan rejection. Lenders prefer those individuals who have filed their income tax returns regularly and on time.
Don’t get dejected if your bank rejects your loan but rather work on the issues and rectify your CIBIL score. These small reasons can easily be rectified and after rectifying the issues try applying for the loan once again. Loan Paradise is the bank which helps you in the process of loan application and, with rectifying your loan rejection issues. We make sure your loan is approved the next time you apply.