When you decide to apply for a loan, the lender will quickly and thoroughly judge our ability to get a certain amount of money, repay the loan, etc. Your review can be based on several things, such as income, age, job stability, credit report history, etc. Often enough, loan applications get rejected and you may not understand why. There are several reasons why an unfortunate even like this can happen. Here are some common reasons why your loan application is getting rejected!
Defaults in your credit history report
One main reason why loan applications get rejected is the poor credit report history. If you have been accumulating “credit card dues” for some time now, or had trouble to repay a loan in the past you will have a bad credit score. The credit history report is a strong reason to reject a loan application. There are also other things to add up on your credit report such as insurance premiums, telephone bills, etc. Try to improve your credit card history by paying all the bills, debts and utilities in time.
Are you able to repay the loan?
This is the question lenders ask themselves when they go through your profile. Considering your income, existing debts and age, the lender will form an opinion about you. If he thinks you may struggle repaying the loan, he will reject your loan application. Plus, if you already have one, two or more loans, this can be another factor that contributes to rejecting your application. The bank can reject an application immediately if you are already on the edge with repaying other loans or other debts.
You are unemployed or have an unstable job
This is a common reason why loan applications get rejected. The lack of a stable income is a serious doubt for banks and lenders, so if your situation is unstable for the moment, you are very less likely to get a loan anytime soon. Banks and lenders need stability and to think that you are serious enough to repay back the money you lend. Therefore, without any valuable income, you will find it very difficult to get a loan.
Do you have a good reason?
When you apply for a loan, you should have a very good reason to do it. Banks and lenders do not just give money away to anyone. You need to state why you need money, what you are going to invest in, etc.