Your personal loan application may be rejected, unless…
Your friend bailed you out the last time you needed money. A dear cousin chipped in on another occasion. But these instances will become rarer as you progress in life. More often than not, you will realise that you can always fall back on a personal loan in your moment of crisis.
Many believe that a personal loan is just an application away. Just approach a bank or an NBFC, and officials will hand over the cheque to you in a day or two. But it is not always that simple. Your application may face rejection for reasons that do not even cross your mind. Here are some reasons why…and how to overcome them.
- Reality check: If your address details even remotely match with that of a defaulter, you might not get the loan. Financial institutions like Bajaj Finserv maintain details of defaulters. You may find yourself at the receiving end if such a person had once occupied the premises where you live. While buying or renting properties, always check these details before moving in.
- Clean record: Delaying credit card repayments or even your insurance premiums can land you in trouble. That is because your name could be referred to CIBIL. Keep an eye on these payments. Let these not hamper your prospects of getting the loan.
- Workplace secure: Maybe you work in an organisation where several colleagues are on the defaulters’ list. For no fault of yours, the lender may reject your loan application. The banks may believe you work for an unstable organisation. Take time out to check that you are not working for such an organisation.
- Juggling loans: Despite a decent income, you may find your application turned down. This happens when you are already repaying other loans. The bank might feel you will not have much left from your income to repay the loan that you are applying for. Prepare yourself for this. Calculate in advance before applying.
- Cautious approach: Applying for loans that keep getting rejected is not fun. This could have serious implications. Your name could be referred to CIBIL. So, it is advisable to get your CIBIL score before applying for a personal loan. Generally, a CIBIL score of more than 700 is acceptable.
- Unfriend a defaulter: Be careful whenever a friend or an acquaintance asks you to be his loan guarantor. More often than not, we do so with closed eyes. This could lead to trouble if the person you vouched for defaults on his repayments. Without your knowledge, you will be referred to CIBIL. This will lead to a poor CIBIL score that will ruin your chances of getting a personal loan. Exercise caution before becoming such a guarantor yourself.
How creditworthy are you?
Banks or other financial institutions are always willing to extend loans to you. It is their business. At the same time, they have every right to examine your creditworthiness. It is their money after all. So, it pays to do some self-assessment before applying for a loan. Remain committed to maintaining a clean track record by closing pending debts. Remember that tough situations may arise at the most unexpected times. Personal loans only help make the ride less bumpy.