Besides having a low credit score, other reasons for being declined for a personal loan include having a high debt-to-income (DTI) ratio and requesting to borrow too much money. If your loan is denied by one lender, however, you can always try applying with another. Each lender sets their own lending requirements.
It is difficult bcoz: limited availability of banks in rural areas, poor people are not comfortable with high delegates of banks, and they do not have proper documentation required by the banks.
A low credit score is reason enough to have your personal loan application rejected. … So, to boost your credit score, avoid erratic loan payments, pay off outstanding debts, and don’t overuse your credit card.
To qualify for a loan, banks look for the “Five Cs” of credit — capacity, collateral, capital, character and conditions
5 things to know to improve your loan approval chances
- 1: How banks assess your loan applications.
- Loan Assessment = Conduct (Credit Score) + Income (DSR)
- 2: Do you have a good credit score?
- 3: Five factors that contribute to your credit score.
- Factor 1: Payment history (Weightage: 40%)
- Factor 2: Credit mix and amounts owed (Weightage: 30%)