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Top Reasons Why your Personal Loan Application was Rejected

· Finance,Personal Loan

Personal loans are very useful. Once approved they are quickly disbursed and can be used for a number of reasons including marriages, education, or medical emergencies. However,
when applying for loans, lenders check a number of parameters to ascertain whether the applicant is worthy of being given the loan or not.

These parameters are carefully evaluated and it is only when the applicant is really not able to meet the desired criteria that the application is dismissed, a few of which are -

1) Low Credit Score

This is one of the biggest reasons why loan applications are not accepted. Lenders look for the credit history of the applicant and if they find that the applicant has defaulted on previous loans and credit card payments, the credit score goes down and loan application gets rejected.

2) Unable to Meet the Criteria

Every lender has set their own criteria when it comes to loan applications. These include the age bracket, monthly income, and even the city you live in, and many more. If these criteria are not met, then the loan application will not get through.

3) Low Income

Income earned by an individual is used as a parameter for determining the repayment capacity of an individual. If the applicant has an income which is less than the minimum income needed by the lender, then alternative sources such as rentals or interest payouts can be used for supplementing your salary and getting the loan approved.

4) Debt to Income Ratio

If you already have multiple loans whose installments you are paying, then the lenders will gauge whether you will be able to repay the new loan or will it put a strain on your earnings. If it is the latter then the application be denied.

These are just some of the factors which can lead to Personal Loan Rejection. There are many other factors. However, there is no need to worry as there are many lenders available who offer high-value loans, affordable interest rates, and flexible tenures. If you want to know about the eligibility criteria and more such information, visit the website of these financial institutions.

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