8 Personal Loan Rejections And How To Avoid Them!



Let’s face it! Rejections are a part of our lives. The rejections can include rejection from your school cricket team, rejection in admission to your preferred college, rejection of a work visa or rejection in credit. These rejections can hurt, but we as salaried individuals need to grow over this and keep moving forward. Loan Singh’s digital lending platform garners hundreds of personal loan applications on our website. Not everyone can get an approval. It all depends on meeting the eligibility criteria and having the right income. Sometimes rejections occur due to the borrower’s lack of knowledge or plain ignorance. It is best advised that you read our FAQ and Finance Blog to understand what are the eligibility criteria and documents needed at Loan Singh. Loan Singh’s digital lending platform tries to serve salaried individuals who have never availed any credit before. It is understandable that some of you may struggle to apply for a personal loan for the first time, even though Loan Singh’s application process being so easy.


Personal Loan Features

A personal loan is a type of unsecured credit that is generally availed to meet urgent financial needs. Being an unsecured credit, personal loan requires no collateral or mortgage. The next question you would have is, “With no collateral, how does Loan Singh trust a borrower?”

Loan Singh does not meet the borrower face-to-face like traditional lending solutions. Everything from loan application to amount disbursement happens online. To mitigate the prospect of risk, Loan Singh looks at your credit worthiness. If you have a good credit history, you have a better chance of avoiding a personal loan rejection with Loan Singh. Your credit history tells Loan Singh how prompt you have been with your past loan or credit card related responsibilities. Availing a personal loan via Loan Singh is advantageous because there is minimal paperwork involved. No time is wasted in cross verifying any paperwork. Your employment status and income help determine if you are capable of paying the loan repayment EMIs on time, or not. The personal loan amount along with interest rate is calculated for the entire tenure, and in case you want to clear-off the loan before tenure completion, no prepayment penalty is levied by Loan Singh.

The purposes for availing a personal loan are aplenty. Some of them are

  • Medical expenses
  • Second hand car
  • House repairs (which offer tax benefits, as well)
  • Online shopping
  • International holiday travel
  • Job relocation
  • Home improvement

No collateral means you can apply for a personal loan for the above purposes and more; even if you do not own any assets. No loan guarantor is needed. No storage needed for piles of paperwork.

You are a salaried individual and chances are that your salary will continue to rise in the forthcoming months and years. Use this impetus to plan your repayments to avoid any delay in repayments and defaults.


Eligibility Criteria

Just like in banks, there is a set of eligibility criteria at Loan Singh, as well; albeit a shorter one.

Indian and salaried – You must be an Indian citizen and be earning a minimum of Rs.15,000 per month.

Good score and age  Have a good enough credit bureau score to help Loan Singh gauge your repayment capabilities. If you have no credit history, then you must be salaried for at least 3 months. You must be at least 21 years of age.


Loan Singh Process

The process is simple and completely online. You need your PAN Card and latest 6 months bank statement. The statement has to be in PDF format only. You can apply for the personal loan by going to Loan Singh’s Get Started page.

Get Started Page – Select ‘PERSONAL LOAN’ from the drop-down and enter the loan amount with the desired repayment tenure.

Registration page – Add your contact number, personal email ID and corporate email ID

Social Authorization – Connect your Facebook, Google+ and LinkedIn profiles for discounted rates

Profile Page – Fill in your name, gender, father’s name, number of dependents and PAN Details. We use your PAN Card Number to check your Credit Score and as a KYC document.

Address Page – Choose your type of residence; mention your street address, city, state and pin code.

Job Profile Page – Mention your current designation, total work experience, company name, highest qualification, last institution attended and monthly salary.

Financials page – Upload your latest 6 months bank statement from your computer or GMail account or net-banking account.

Auto Debit Page – Provide permissions to your bank name, account number and IFSC code so that Loan Singh can auto debit the EMI amount from your account every month. This way you don’t need to set reminders or miss-out on any loan EMI repayments.


Loan Rejection Reasons

Now that we have seen the importance of personal loan, let us look at some common personal loan rejection reasons.

Incomplete Applications

It gets difficult for Loan Singh to assess how many of the borrowers, who left their application incomplete, were actually interested. Many a times, we receive applications where the applicant does not provide us with his/her PAN, but is actually eligible thanks to a good credit score. Ensure that you complete the application form on Loan Singh’s Get Started page. Help us so that we can help you. Trust us, just as we want to trust you.

Low Income

Borrowers with low income levels will be rejected outright. You should be earning a minimum of Rs.15,000 per month. This is because we, at Loan Singh, know what an average millennial needs to spend on a monthly basis. You need money to spend for yourself, as well. If you are barely saving enough for yourself, how can you pay the loan EMIs on time?

Poor Credit History

You may be a high salaried individual, capable of paying the loan EMIs, but if your prior repayment history is default strewn then there is no way you can convince us about your prompt repayments in the future. A personal loan involves no collateral, so your repayment history is the only indication of your past prudent credit responsibilities. Banks reject loan applicants who have never even availed a loan before. If you are salaried for at least the last 3 months, this will never happen at Loan Singh.

Bad Credit Score

The credit score is ranged between 300 and 900. The better the score, the better your chances of getting the personal loan approved. A good credit score is dependent on prompt EMI repayments, credit card statement and maintaining a good credit mix.

Not Old Enough

Age is a factor that can lead to your personal loan being rejected. A college student who desperately needs to buy the new iPhone X cannot apply for a personal loan just because it involves no collateral. A borrower, expecting to get a personal loan via Loan Singh, needs to be of at least 21 years of age.

Tampered Documents

Being honest with your financials is paramount. Loan Singh is a digital lending platform that does not involve any human intervention while checking and verifying your documents. That is why the bank statement has to be submitted in PDF format only. It would be even better if the statement is forwarded to Loan Singh directly from your net-banking account.

Borrowers also try to sneak in fictitious or tampered financial information to conceal their past defaults, this should not be done and the application would be out-rightly rejected.

Required Loan Amount

You cannot apply for a personal loan at Loan Singh with a far-fetched loan amount. Your loan amount will depend upon your income and repayment capacity. Before you apply for a personal loan, you should assess your requirement carefully. If your need for funds is small, then try to arrange from non-banking sources.

Multiple Concurrent Loans

Make sure you are not currently paying multiple EMIs towards multiple loans. This can be a reason for a rejection towards your application. If these multiple loans indicate you being in debt, then it is easy for the bank to reject your application.  Ensure you have enough balance in your account to spend towards daily expenses, utility payments, etc. Pay-off the loans you already have before applying for a new one. The total amount of EMIs being paid each month should be less than 50% of your monthly income.

More Reasons

  • Indication of bounced cheques in your statement
  • Non-crediting of monthly salary on time
  • You are a loan guarantor to someone who has defaulted in a loan EMI payment
  • The co-applicant to your personal loan has a poor credit bureau record, even if your credit score is good
  • Your residential address is on the defaulter’s list or if you live under the same address as someone who has defaulted on a loan EMI payment (could be a family member or previous tenant)
  • You faced many loan rejections prior to your current loan application

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