One of the serious implications of loan application rejection is decreased credit score. Not only does your CIBIL score reduces but your credit history will also reflect the refusal. Other lenders, after performing a credit check, may also deny you loans based on this rejection. 

Hence, it is essential that you make sure to fulfil all the eligibility criteria and provide the correct documents when you apply for financing either online or through a loan app. Although the terms and conditions to approve secured and unsecured loans have become easier, it can still pose challenges. So, here are some of the common mistakes made by borrowers that might lead to rejection –

Mistakes That Leads To Rejection of Loan Application:

[1] Holding A Poor Credit Score 

When you apply for a loan, the first thing that lenders check is your CIBIL score. Credit score reflects your credit behaviour towards financial transactions. It indicates your financial habits; lenders base their loan-sanctioning decision on the CIBIL score. They develop a risk-based disbursal based on your credit score. 

So, if a person defaults on repayments or delays in paying-off dues, his/her credit score will take a hit. To maintain a good credit score, you must pay your dues timely and avoid availing too many unsecured easy loans at once – as it negatively impacts your credit rating.  

[2] Incorrect Details On Your Credit Report 

Your credit report contains your details including your credit behaviour. Hence, any discrepancies in it can lead to a mismatch between your credit report and loan application details – thus, causing rejection. 

Henceforth, if there are changes in personal data, you must contact the credit information bureau to update the information as soon as possible. It is therefore essential, to check your credit report for signs of errors before using instant loan apps to obtain credits. 

The mistakes can range from listing you as a credit card user even though you have not applied for one or showing a loan yet to be repaid, which you have never availed in the first place. Upon noticing such discrepancies, fill-up the dispute resolution forms provided to aggrieved customers by the credit bureaus and submit it with relevant documents. 

 [3] Previous Instances Of Loan Rejection 

Some loan seekers tend to apply multiple applications at the same time. This often leads to loan getting rejected, which negatively impacts your CIBIL score. This, in turn, leads to your fresh loan application being rejected due to your past credit behaviour. Therefore, it is recommended to wait for a reply from one lending institution before applying to another via loan app. This improves your chances of having your credit sanctioned.    

[4] Unstable Income 

As timely repayment of a loan is of top-most priority of a lender, it would like to ensure your repayment capabilities are sound during sanctioning. In case of salaried professionals, his/her steady source of revenue is determined by the job stability. 

A similar picture comes to changing jobs frequently as well. While it might provide the borrower with a higher income level, it exhibits a negative impression towards your lender. Hence, it is advised not to change jobs frequently if you are planning to obtain a housing loan soon.  

For self-employed individuals, a minimum of 5 years of business vintage along with proof of steady income generation is required while applying for a housing loan.  

Having a loan sanctioned is a challenging task as chances of rejection are quite significant. Therefore, an applicant requires to be sure from all aspects before applying through a loan app. 

As for finding the best online app, you can consider using the Bajaj Finserv Experia. It comes with an easy-to-access interface and a host of benchmark-setting features. With this app, you can procure an advance, manage your investments, track your repayment schedule or raise a request. 

Further, if you are an existing customer of the lender, you can even benefit from their pre-approved offers. Pre-approved offers make the process of loan procurement more favourable through minimal documentation, instant processing and fast disbursal. These offers are applicable to a diverse range of financial products like home loans, personal loans, business loans and other financial products. You can use the instant loans app to check your pre-approved offer by sharing a few necessary details such as name and contact number.