There are actually many reasons, apart from your credit score, that might result in your loan request being rejected. Let’s get an in-depth explanation from an expert.
How to avoid Loan Application rejection: Even with a stable income source and the ability to repay the loan, as well as a decent credit score, your loan application keeps facing rejection. Why does this happen? Besides the credit score, there are many other factors that can cause your loan request to be declined. Let’s get a detailed explanation from an expert.
Many times you apply for a loan but your request is repeatedly rejected by the bank. There are many reasons for this. Atul Monga, Co-founder and CEO of BASIC Home Loan, says, the first reason for repeated rejection of loan application is not having a good credit score or history. This happens when you have not made the payment on time or your debt-to-income ratio is high. Apart from this, if your income is insufficient or your work history is not stable, then the bank doubts your payment capacity.
Application beyond repayment capacity
Atul Monga says, another reason for loan request rejection is lack of necessary documents or not filling the form properly. This also does not get your loan approved. Sometimes you apply for an amount more than your repayment capacity, in such a case also the loan gets rejected. Lastly, the burden of any existing loan or loan taken from credit card can also affect the loan application process.
What to do to get the loan approved
Experts say that to avoid repeated rejection of your loan application, improve your credit profile. Make sure your income is stable. Apply only after reviewing all the necessary documents. Getting prior approval or consulting your financial advisor also increases the chances of a successful loan application.
