Are you tired of facing refusal each and every time you apply for a loan? Experts say, there ought to be anything that you are undertaking incorrect. Note that becoming a wise borrower is not that tricky at all.
Rohit Garg, Co-Founder and CEO of, Smartcoin says, “One just has to play their cards right. First thing foremost, one needs to underline the primary causes behind their failure to receive loans from financial bodies.”
Reasons why your loan application is obtaining rejected
There are many causes why your loan could be rejected.
- An insufficiently low CIBIL score or credit score could lead to rejection of a loan
- You could have unwittingly offered erroneous or invalid information and facts to the lending party, for which for the duration of the procedure the loan application was rejected.
- There could be particular errors or ambiguities in your loan application kind
- You are aiming to apply for a higher loan quantity that surpasses your existing eligibility
- Failure to generate or submit the required documents expected for loan approval, and so on.
Here is how you can guarantee loan approval each and every time you apply
Garg, says “Generally speaking, a loan applicant’s present income status and credit score are the top factors taken into consideration by a lender before sanctioning any loan. However, this does not reveal the entire picture as there are other factors too that come into play.”
It is also doable that a lender could refuse to provide a loan to a seeker based on other elements, which specialists think could be poor employment history, lack of a steady earnings, and challenges with keeping sufficient money flow or liquidity.
Here’s how you can get loan approval
Verify beforehand no matter if you meet all the required criteria for loan approval such as positive credit history, a steady earnings, and so on.
One of the vital points in loan approvals is the CIBIL score. Garg adds, “One must preserve his CIBIL score well above 750 to ensure loan sanctioning from lenders. A poor credit score is bound to reflect poorly and can deter the lender from green flagging the loan application.”
Experts say borrowers really should make an work to rectify the shortcomings and errors present in their credit report. This indicates paying off outstanding dues on time and avoiding point drops that take place due to late payments or defaults.
Do not file numerous loan applications as that does not genuinely enable in any way. It not only appears spurious but is also thought of monetary malpractice. Applying to numerous lenders for a loan will also cut down your credit score.
Having stated that, Garg adds, “with the evolving times, much has changed. It is now possible to avail credit even with a low credit score. Many new-age lenders and fintech bodies are creating waves in the financial seas by providing credit facilities to borrowers with bad credit based on less rigorous credit parameters.”
The pitfall of these loan choices becoming that the interest price levied is comparatively larger as supposed to availing credit with a fair, excellent, or superb CIBIL score.
Additionally, there are other strategies also for borrowing credit with a poor score: leveraging a person with a excellent credit score to apply with you as a veritable cosigner.
Garg says, “Having a cosigner enhances your shot at getting your loan approved by lenders. Having a trusty cosigner has other perks as well. Enlisting a cosigner with a great credit history can help you score a lower interest rate even if you are qualified to attain approval on your own.”