General Reasons for Rejection of Your Loan Application
For many people, a personal loan is helpful in many ways when they have a shortage of funds for meeting some immediate requirements. The proceeds from a personal loan could be used for any purpose such as going on a dream vacation, buying an expensive item, paying medical bills, undergoing treatment, or meeting expenses associated with a children education or wedding. Personal Loan is easy to obtain as you are not required to submit any collateral security. However, banks look at various aspects before approving a loan. Sometimes, banks reject loan applications due to the reasons listed below.
Delinquency In Past Payments
Delinquency refers to missing out on loan or card installment payments. Your personal loan becomes delinquent when your payments are delayed, even by a day or you miss out on one regular installment payment or several payments. This means that the loan goes into default. This is what eventually happens because of extended payment delinquency. So, making payments on time into your loan account is very important. Lenders take delinquency in past payments seriously and if this has happened in your case they might reject your subsequent loan applications.
Lower Credit Score
Prior to approving your loan application, banks often obtain your credit report, typically from the Al Etihad Credit Bureau. They will also verify your debt-burden ratio (should be below 50 percent), delinquency in past payments, and find out as to how many credit cards are there in your name at the time of processing your loan application. The higher your credit score, the more will be the chances of your loan application getting approved. If your credit score is low, most banks will reject your personal loan application.
Your Company Is Not Listed
One other aspect that most lenders, including banks, check is whether the company you are working for figures in their list of approved companies. The reason why they do this is to assess the risk involved in lending money to you. In general, the names of large companies will find a place in their approved companies list. It is fairly easier for you to get a personal loan if you are working for any of the listed companies. This is because lenders know that your employment is stable and your income is secured. If you are working for a non-listed company, your application for a personal loan may be rejected.
Note: CompareGulf is an online market research consultant, our experts would support you in choosing right financial choice and also loan products from the market. This blog should be used only for knowledge and information purposes. Consult with bankers before signing any agreement.