Login to Internet banking
A brand-new experience - smarter, faster, and secured
Introducing the First-in-industry IDFC FIRST Bank's Super Account
Request a Callback
You gain a dedicated partner committed to helping you reach your full potential and achieve new heights
Know More- Account with Auto-Sweep FD
- Account for all Domestic businesses
- Account for Importers & Exporters
- Account for Start-ups
- Accounts for Trusts/Associations/Societies/Clubs
- Account for Merchants
- Account for Agri Traders
- Account for Self-employed professionals
- Special Purpose Accounts e.g. SNRR, RERA, EEFC
BRAVO (Auto Sweep)
Convert the idle funds in your current account into a fixed deposit with the BRAVO feature.
Know More
Zero Forex Markup Current Account
Maximise your savings and boost profitability with our Zero Forex Markup current accounts
Know More
Make more than one online payment in just a few clicks with IDFC FIRST Bank Bulk Payments
Know More
A Card that Powers your Savings & Lifestyle
IDFC FIRST Bank HPCL Credit Card
-
Business Max Credit Card
UPI-ready Lifetime Free Low APR -
Business Multiplier Credit Card
Zero Forex Metal Card 10X Rewards
-
FIRST Corporate
Lifetime free Travel
-
FIRST Purchase
Lifetime free Working capital needs Rewards
-
FIRST Business
UPI Rewards 1.99 Forex
-
Micro Enterprise Credit card
UPI-ready Udyam registered MSMEs
Most Searched
Earn up to 6.50% interest on your Savings Account
Open Account Now
Download our app
Get instant help for all your queries in one place
Explore Personal
- Accounts
Tools & Calculators
Privilege Program
- Privilege Program
Explore Credit Cards
- Newly Launched New
- Premium Metal Credit Cards
- Lifetime Free Credit Cards
- FD-Backed Credit Cards
- Zero Forex & Travel Credit Cards
- UPI-enabled Credit Cards
- Affordability & Cashback Credit Cards
- Fuel & Insurance Credit Cards
- Commercial Cards
-
Business Max Credit Card
UPI-ready Lifetime Free Low APR
-
Business Multiplier Credit Card
Zero Forex Metal Card 10X Rewards
-
FIRST Corporate
Lifetime free Travel
-
FIRST Purchase
Lifetime free Working capital needs Rewards
-
FIRST Business
UPI Rewards 1.99 Forex
-
Micro Enterprise Credit card
UPI-ready Udyam registered MSMEs
-
- Others
Unlock features, exclusively available
only on the IDFC FIRST Bank app
FinFIRST Blogs
Personal Loan
Personal loan rejected? Here's the one mistake everyone makes (and what to actually do)
Key Takeaways
Several factors can lead to personal loan rejection, but not checking if you are eligible for the loan before applying is the most detrimental.
- Most lenders provide eligibility calculators that allow you to estimate the loan amount you can obtain, even before you start the application process.
- Assessing your eligibility and taking the necessary steps to enhance it before applying for the personal loan proves advantageous and enhances your loan approval chances.
When considering your personal loan application, lenders take various criteria into account. But the one mistake that causes most lenders to reject your loan application is not checking your eligibility proactively before applying for the loan. Besides this, there are several other factors which lenders consider when you send your loan application. Let’s decode the common personal loan rejection reasons in this article.
READ MORE
The biggest mistake: Applying without checking eligibility
Lenders typically set basic eligibility criteria such as net monthly income, employment status, age, etc., which they mention on their websites, which you must fulfil.
Not checking your eligibility before applying can affect your ability to get necessary funding, especially when you need funds urgently. Randomly applying will lead to rejection and add to hard inquiries.
Top personal loan rejection reasons
Besides not checking your eligibility before applying, lenders may offer various other crucial personal loan rejection reasons, including the following:
Low credit score: Most lenders insist on a credit score exceeding 750 points to deem you creditworthy. While a score of less than 700 may result in unfavourable loan terms, scores in the 550-650 points range may result in outright rejection. For instance, with IDFC FIRST Bank’s FIRSTmoney, you can apply for a personal loan with a CIBIL score of 710 if you are a salaried individual and 760 or above if you are self-employed.
High EMI obligations: If you already have existing loans, for which you are paying monthly EMIs, lenders may be concerned about your fixed obligation to income ratio (FOIR) and may be inclined to reject your loan application. Typically, lenders prefer a FOIR below 40%–50%, though the acceptable range may vary across lenders and borrower profiles.
Document mismatch: If the documents you use do not match with the information ypu enter in your application, your chances of loan rejection may increase.
Frequent loan applications: If a lender senses that you are a habitual borrower, prone to applying for loans regularly, and struggling to repay your EMIs on time, they would be less motivated to approve your loan application.
Limited or no credit history: If you have no prior loans or credit cards, lenders may lack the data needed to understand your repayment behavior.
Job or income instability: Lenders prefer individuals with a steady monthly source of income. Frequent job changes, extended periods of unemployment, or not meeting the minimum monthly income criteria can lead to a rejection.
How to improve your chances of personal loan instant approval
An organised, clearly filled out and focused application maximises your chances of a fast loan approval. Here are the simple steps to follow.
- Maintain a consistently high credit score exceeding atleast 750 points.
- Avoid multiple hard enquiries by checking your eligibility and comparing offers before applying.
- Ensure your ongoing loan EMIs, if any, are less than 50% of your net monthly income. Also, utilize less than 30% of your total available credit limit on credit cards.
- Keep your KYC documents updated and handy.
- Explore instant, pre-approved loan offers before applying to other lenders.
- Link your current mobile number to your bank account and identity documents such as Aadhaar.
It is incredibly easy for you to check your eligibility with the personal loan eligibility calculators available on the IDFC FIRST Bank website. Upon completing the eligibility check, you can access FIRSTmoney personal loans with fast loan approvals and swift disbursals in as little as 10 minutes.
Conclusion
By simply conducting an eligibility check before applying for a personal loan, you can enhance your chances of loan approval considerably. An eligibility calculator simplifies this process by assessing key factors like your income, age, employment type, financial obligations, and credit profile. It then estimates the loan amount you may qualify for. This helps you apply with more confidence and increases the chances of a smoother approval.
Frequently Asked Questions
Why was my personal loan rejected?
Your personal loan could be rejected due to various reasons like document mismatch when applying, or a low credit score, insufficient net monthly income, a high existing debt-to-income ratio, and/or incomplete/inaccurate documentation.
How can I improve my personal loan eligibility?
You can boost your personal loan eligibility by conducting an eligibility criteria check on lenders’ websites before applying for the loan formally. It also helps to maintain a consistently good credit score, pay your outstanding debts on time, and maintain stable employment.
How long should I wait before reapplying?
Ideally, you should wait for at least 3 to 6 months if your loan application is rejected. This timeframe allows you to rebuild your credit score and enhance your creditworthiness, while your score recovers from any hard inquiries you may have made.
Disclaimer
The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.
The features, benefits and offers mentioned in the article are applicable as on the day of publication of this blog and is subject to change without notice. The contents herein are also subject to other product specific terms and conditions and any third party terms and conditions, as applicable. Please refer our website www.idfcfirst.bank.in for latest updates.
Summarize with AI
