Loans are the useful fund and become valuable at the dearth financial situation when you need to finance your business or personal needs. You might be alert of several possible reasons a bank may reject your loan application. Applying for a loan involves preparation on different fronts. You are required to update your credit score such as ensuring close-out existing loans or credible loan track, proper payment of credit cards, proper tracking of other existing loans on property or assets, good income tax report and sound salary figure with healthy bank statement. These are the basics and prerequisites of the loan preparation as well as approval.
However, there are several other bold factors that can lead to your loan application rejection!
The first and foremost reason is your inconsistency in a particular job. This is the prime reason behind loan denial by banks. If you are not consistent in a job for more than six months then many banks consider your case as a weak loan application. Now days it is a common practice to switch jobs from one organization to other to gain a salary hike or get rid of job pressure or for a change. Banks pay considerable attention on job stability. So better to stick with a good organization as it hampers your credit worthiness and also you can avail prepayments by your employer at critical times.
Your profile is negative or not in line with the internal policies of bank may be the next reason. Every bank has its own internal policies and guidelines and they define credit profiles or geographical regions according to their policies as negative for loan. If you fall under this radar then the banking institutions will not lend you loan. Though there is an escaping space as your profile considered as negative by one bank may not be negative for rest banks. Also, one can present additional documents as security such as fixed deposits, insurance policies or other securities.
Apart from these, rest reasons are falling of your residential address in the bank's defaulter zone, loan application for an old or disputed property or your loan application has been rejected before. But you can avail loan even if you are under these loan rejection radars by providing valid and convincing proofs against those reasons to the bank. It is better to approach a bank, for loan purpose, which is near your residence or the bank where your salary is deposited. Banks are ready to address your valid reason for loan application and latterly awarding you with loan approval.