Loan Singh Explains – What Causes Personal Loan Rejection



Being one of the premier providers of personal loans, in the segment of digital lending, we have seen a fair share of personal loan rejections. Our purpose, as a digital lending platform, is to serve the under-served salaried professionals who face personal loan rejections from traditional lending institutions, such as Banks. Many rejections happen, at Loan Singh, due to applicant’s ignorance or ineligibility for a personal loan. Our FAQ and Blog pages, mention more or less everything you need to know about eligibility, credit bureau score and the application process. Through this piece, we look at what are the most common reasons for a personal loan application to be rejected at Loan Singh. Before we look at the personal loan rejection reasons, let us understand what a personal loan is, the eligibility criteria at Loan Singh, and the application process preceding the rejection.


What is a Personal Loan?

A personal loan is a type of unsecured credit that is generally availed to meet urgent financial needs. Being an unsecured loan, there is no collateral or mortgage involved at Loan Singh. With no collateral involved, how does Loan Singh trust the borrower? Loan Singh has not met the person face-to-face. So, the question arises as to how can a borrower be trusted in making the EMIs on time, without any defaults? 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. 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. Everything, from application to disbursement, happens online. No time is wasted in cross verifying any paperwork.

Loan Singh’s eligibility criteria

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

Being salaried – For now, you must be at least 21 years of age and be earning a minimum of Rs.15,000 per month.

Good credit bureau score Have 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.


Why Personal Loans are the best option for quick funds?

We can all be hit with a financial emergency. Job Relocation, wedding expenses, international trip, medical bills, etc. are just some reasons which require a quick influx of funds. There are reasons which make personal loan the best option for quick funds.

No collateral – The advantage here is that even if you do not own any fixed assets, you can apply for a personal loan. Neither is there a need for a loan guarantor.

Varied purposes – Along with the purposes mentioned above, you can also avail a personal loan for home improvement, hair transplant, house repairs, debt consolidation, second hand vehicle purchase, and many more.

Quick and hassle-free – With no paperwork needed for Loan Singh’s digital process, you can apply for the personal loan from your home. No physical storage of documents and no need to travel to-and-fro between different banks for approvals and re-verifications.

No prepayment penalty – At Loan Singh, you can clear a personal loan ahead of tenure with no prepayment penalty – unlike banks.


How to apply for a personal loan?

If you find yourself fitting Loan Singh’s criteria, log on to and apply for a personal loan. You will need to keep your PAN and bank details handy. Here is how the process goes.

Get Started Page – Select ‘PERSONAL LOAN’ from the dropdown 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 to your Facebook, Google+ and LinkedIn profiles, to avail a lower interest rate.

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.

Address Page – Choose your type of residence, and 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 (in pdf format) either from your computer, GMail account or net-banking account directly. Our net-banking partner is ISO 27001 (2013 standard) certified & provides services to multiple banks, as well.

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 payments.


Loan Singh’s Personal Loan rejection reasons

Loan Singh’s credit algorithm decides whether you are personal loan worthy, or not. In case your personal loan application is rejected, it could be due to the following reasons.


“A Clear Rejection is Always Better than a Fake Promise”


Poor credit score

Default in any of your previous or running loan EMIs or credit card bill payment.

Job profile and monthly income

If your monthly income is insufficient, to pay the monthly repayments on time, then your personal loan application will be 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.

Some less likely reasons that lead to rejections 

Bounced cheques, insufficient average daily balance, and non-crediting of monthly salary on time, are some uncommon personal loan rejection reasons. But you could also have your loan request rejected if

  • 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


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