Vishal Anand, a graphic designer makes good profits in his business, pays taxes regularly, pays his bills on time and invests his money sensibly. Why then, is that, his personal loan application gets rejected?
CIBIL credit score is probably one of the most important factors that helps decide banks on your loan application. That is, however, not the only one factor-there is a number of others which affect the destiny of your personal loan application.
Let’s see why personal loan applications get rejected.
Adverse remarks in your CIBIL reports can always play a dampener. Remarks such as ‘written off’ or ‘settled’ make banks cautious and wary of providing loans to such clients. These remarks indicate that you did not pay our previous loans in full and that the bank had to forgo its money.
Too much loan payout or you may have not paid loans regularly make banks disinterested. If you are already paying your EMIs, your high payout ratio will reflect I bank’s calculations and the bank officials understand that you would not be able to shoulder the burden of further EMIs and you are likely to default in repayments. Your debt to income ratio must be in the higher side for bank to reject your loan application.
Your database credential match with some other defaulter, your loan application might get rejected, though by mistake. This is very tough to confirm with the banks, since they usually do not disclose why they rejected your application. Make sure the residence address is not connected to any defaulter, through the previous owners of the house that you live in, for example.