• Who likes to wait in a long line, and then be told, you’re not eligible? We demystify the top reasons for Personal Loan rejections here. Taking Personal Loans is one of the best ways to finance your immediate requirement for cash.
  • Financial institutions like banks, however, will verify your profile against strict lending criteria, before approving a loan application.
  • Getting a Personal Loan is therefore not easy and having a good credit history is extremely important.
  • Your income plays a major role in influencing the bank’s decision. In case your income is not enough to sustain your monthly repayments then your application for a Personal Loan is likely to get declined.
  • The bank will also check your job profile to assess the stability of your current job. If you are on probation, have a temporary job, or are constantly switching jobs, you may not get pre-approval from your bank.

Bad Credit History

  • Before lending any amount, any lender, whether a bank or another financial institution, will first verify your credit history.
  • There can be many reasons like
    • Defaults on loans taken earlier
    • Overdue loans
    • Court judgments
    • Skipping EMIs, as well as
      • Late payment of electricity,
      • Telephone, and
      • Credit card bills are all factors that impact your credit history.

If you have been a loan guarantor to someone who defaulted, the bank will consider you as accountable.

Older Rejected Loan 

  • If your loan application was rejected in past, then it will reflect on your credit history.
  • Many times, this results in loan application getting rejected again, unless there is a significant improvement in credit score and repayment history since the last rejection.
  • Lenders also verify all information provided in loan applications. If any discrepancy is found, lenders will have good reasons to reject your application.

Insufficient or Irregular Income

  • The lender can’t approve your application if they find that your income won’t sustain your monthly repayments.
  • Lenders usually have a minimum income you need to earn to be eligible for the loan, so check the eligibility criteria. If not, work out what repayments you’ll need to make and if these will be manageable on your income.


  • If too many loans have already taken out by you in the previous year, regardless of whether you were able to honor them or not, banks will not approve your loan as they deem such individuals as credit hungry.
  • Even though your record is clean, you will be considered a risky candidate who can default at any time.

Invalid Details

  • The details provided by you on the documents will be verified.
  • If there are any faulty details then the bank or the lender will straightaway deny your application.

Avoiding Verification Calls

If you have been avoiding verification calls that are made to you while your loan application has been made, then there are chances of your loan getting rejected.

Select Joint Loan with sister or friends

  • If you are planning to take a joint loan with your friend or sister, it is for sure that your loan request will get rejected.
  • This is so because banks do not allow joint loans with sisters or friends.
  • However, joint loans with brothers or parents are usually approved.

To sum up

  • It usually happens so that a borrower has done everything right, but even then you are left analyzing the reason for the rejection of your loan application. However, EMI can be analyzed by the personal loan application
  • It is to be frustrated if you see your loan gets rejected, especially when you were very much in need of it. So, before approaching the other banks for a loan