What are Loan Rejection Reasons Apart from Low CIBIL Score?
Consider you have a CREDIT SCORE 750+, but still the LOAN APPLICATION GETS REJECTED.
Yes, credit scores are very essential in deciding your creditworthiness and a low score will not make you eligible for getting a loan. But what if you have an optimum CIBIL score yet the loan or credit card application is rejected? The answer is that banks consider a lot more than just credit score when assessing your loan eligibility.
A credit score just tells the bank about your financial health and repayment capacity or history, existing debts and other such information. A good credit score always makes you a likely candidate for securing a loan, but it is not all. Here are the reasons why your loan can get rejected despite of a great CIBIL score.
- Basic Criteria: There is a set criterion most of the times about place of residence, job profile or nature, age of the person, income drawn, and others for securing a loan. If you are a mismatch with any of these factors, you may not get the loan processed despite a good credit score. However, you can look up for banks that are ready to find your profile eligible for borrowing
- Guarantor for a Defaulted Loan: If you were a guarantor to someone for their loan, and the person defaulted at payments, then your credit score takes a hit as well.
- Remarks in Credit Report: Apart from score, your CIBIL report will consist of comments and remarks by lenders. If you had settled a loan with the bank in terms other than those accepted then it will reflect in the report and work against you. Bank takes these remarks seriously: Days Past Due, Settled or Written off etc.
- Defaulters Info Match: Even if by error your details match with that of a defaulter, you may be rejected from taking loan. This happens in case of people who submit documents of the owner (who maybe a defaulter) of a house they have rented, and similar cases.
- Disposable Income is Inadequate: You may draw a high income but have too many debts to pay along with taking care of your other needs. In such situation, you will have fewer amounts left to be called eligible for repaying a new loan.
- Credit Hungry Behaviour: If you put too many loan enquiries or keep on borrowing frequently then the bank will consider you in negative way to give loans, as it will think that you always depend on loan, and chances to default are high.
- Too Much of Unsecured Loans: Today you can take loans without collateral. However, if you only take loans of such nature, the banks may not find you as a suitable candidate for giving you loan all the time. You must even opt for secured loan to balance the mix of credit.
- Inappropriate Tax Paying History: If you do not pay taxes in time or file for returns pass the due date then there are risks for getting loan approved as the banks consider your financial profile dangerous to trust.