How to Avoid Rejection of Personal Loan Applications?

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The approval of a personal loan application depends on many factors. When you apply for a loan, you should make sure that you are fulfilling all the factors to ensure the approval of your loan application. The eligibility criteria for personal loans may vary from lender to lender. However, there are some common criteria which include the age of the applicant, his or her income, credit score, the status of employment, and so on. Before you apply for a loan, make sure that all the eligibility criteria are being fulfilled. This will help you avoid the rejection of your loan application. Although there are other options that you can resort to in case your loan application gets rejected, it is recommended to double-check before applying to avoid the chances of rejection of loan application.

How to Check Personal Loan Status?

There are two main modes of checking the status of your loan application. Most lenders offer both online and offline modes through which you can keep tracking your personal loan status.

Online Mode:

Most lenders offer the option of logging in to their official portal to help you track the status of your loan application. You can use the application number or reference number which is issued by the lender for this purpose. On the other hand, if you have applied for a loan through a third-party aggregator website such as BankBazaar, you can just log in to its web portal and track the status of your loan application directly.

Offline Mode:

If you are not comfortable using the online platform, you can also track the status of your personal loan application through offline means. You can visit the branch office of your loan provider and check the status of your loan application. On the other hand, you can also connect with your lender over the telephone through their helpline or customer care number.

For both these methods, you would be required to provide a few basic details such as your name and the application number or reference number. Head to BankBazaar to know more about how to track your personal loan status.

How to Get Personal Loan Statement?

You can easily get in touch with your lender either through their online web portal or in person and request your personal loan statement. On most lender websites, you can just log in using your online credentials and provide your loan account number.

Once you have tracked your account, you can request a statement which is either sent to your registered email ID or provided in the form of a PDF file which can be downloaded. Similarly, you can also visit the branch office of the lender from where you have availed the loan and place a request for a statement. In addition to that, you can raise a request for your personal loan statement through phone banking as well.

Tips for Successful Personal Loan Application

There are a few important things to keep in mind when searching for a personal loan. Check out list of most helpful tips that will certainly help you with your personal loans.

Assess the need for your loan
Do proper research to get the best rate
Check your credit history
Review the fine print on your loan document carefully
Choose your loan tenure by assessing your repayment ability
Choose an affordable interest rate
Select your loan amount as per your convenience
Check your EMIs properly
Compare the processing fee
Select fixed or variable interest rate according to your preference

Note: Know more about Tips for Personal Loan

Do’s	Don’ts
Do proper research before you apply for a loan	Do not sign your loan documents without understanding every point
Do read the fine print carefully	Do not make multiple inquiries regarding loans from different banks
Do save your money carefully when you are repaying	Do not take a personal loan without any serious purpose
Do pay your loan instalment promptly every single time	Do not be in a hurry to end your loan comparison process
Do evaluate your credit score thoroughly	Do not forget to pay your loan instalments
Do apply for an affordable loan amount	Do not accept bad loan products

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Things to do After Closing a Personal Loan

If you have recently paid off your personal loan (either repaid or foreclosed), you might have the idea that your obligation towards the loan is over. However, that is not the case. There are certain things that you should do after paying off your personal loan.

No Dues Certificate (NDC): The No Dues Certificate (NDC) is issued by your lender once you pay off the debt. This is one of the most important documents that you should collect immediately after paying off your loan. It is also a wise decision to retain this document for an extended period of time. This certificate validates the repayment that you have made. Without this document, you cannot prove that you have paid off your debts. In case you are looking forward to taking another loan in the near future, you will need this document to prove that your previous loan has been paid off. Usually, this document is issued on spot by your lender if you are paying off the final amount through hard cash. If you are paying via check or NEFT or any other means, the lender will issue the NDC and will either send it to your registered address or will ask you to collect it from the branch office of the lender.
Statement of Account (SoA): The Statement of Account or SoA, along with the NDC will help you prove that your debts have been completely paid off and have been paid on time. This is an optional document which is often issued by certain lenders. If your lender provides this document, you should consider getting it. However, you should also look for any sorts of discrepancies in the credit score. If you find something wrong, you can use the SoA to make the necessary changes to it.
Collection of Unused Cheques: If you have some cheque leaves which have not been used, you should collect those as well. The collection of the No Dues Certificate and the unused cheque leaves, usually, marks the end of the closure process for the loan.

Check your Credit Score after Closing the Loan: This is just a recommendation. It is not compulsory to check the credit score after the closure process ends. However, it is recommended that you check the score to make sure there are no differences in the score. If there are some chances of you availing another loan within 1 to 2 years of the closure of the current loan, it is highly recommended that you check the credit scores right after the closure of the loan.

Personal Loan Disbursement

Personal Loan Disbursement is basically the process of the financial lender remitting the loan amount in the bank account of the customer. The loan disbursal takes place after the submission of relevant documents of the customer and the verification and approval of the financial lender. Financial lenders offer personal loan disbursals in a few seconds, while other take a few hours to a few days to disburse the loan amount following approval.

How can I Repay my Personal Loan?

There are a number of ways by which you can repay your loan. These include:

Via Electronic Fund Transfer (EFT)
By cheque
By physically paying at a branch of the lender
Via standing instruction for automatic deduction from your account

Risks and Considerations

Some of the risks related to a personal loan scheme are mentioned below:

High Interest Rate: If your credit score is low, then the bank may charge you a higher interest rate since you might be at a risk of not being able to pay your loan amount on time. Similarly, if you delay the payment of loan or credit card bills, or any other loans, your credit score will drop, making it difficult to apply for a personal loan. If you do apply for a loan in the future, the bank will charge you a higher interest rate.
Debt Burden and Financial Implications: If you avail yourself of a personal loan, then it must be understood that it is a debt you owe to the bank. Hence, it becomes important that you repay your loan on a timely basis. If you fail to repay the loan amount on time, then you would be penalised for it which in turn means you will have to pay more of your pocket, which in turn will deplete your savings further. Hence, always avail a loan amount which you can repay on time and do research all the personal loan schemes before applying for the one most suitable for you.
Impact on Credit Score: If you fail to repay your personal loan on time, your credit score will be affected which in turn will make it more difficult to apply for loans in future. Before applying for a personal loan, make sure you do not have any outstanding amount or EMIs to be paid to any lenders. Repay all your existing loans and then apply for a personal loan so that your credit score remains high, and you avail a personal loan at a lower interest rate.
Hidden Fees and Charges: Most banks when offering personal loans may also levy certain charges apart from the processing fee. These fees might be prepayment fees, cancellation fees, prepayment fees, etc. Hence, do check or simply enquire with the bank about such fees and charges so that you can decide better the personal loan scheme most suitable for you.
Potentially Fraudulent Activities: There is always a risk of potentially fraudulent activities when you are looking to apply for a personal loan. Top banks and lenders will always conduct their due diligence and will check your credit score, employment status, etc. before deciding to approve your loan application. A fraudulent company will not be interested in your credit score and will promise you approved loans, while also asking you for upfront payment. Make sure you conduct your own research such as whether the company offering you a loan is a registered entity and recognised by the Reserve Bank of India (RBI). If you have received any suspicious links which promise to approve your loan application, do not click on it. Do conduct proper research and check if the loan offering entity is authentic or not and then decide whether to apply for a loan from them.

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FAQs on Personal Loans

What is a Personal loan? Personal Loan is a type of loan which you can avail to meet your immediate financial requirements. You wish to go on a trip, or need funds for marriage, or simply need cash to purchase any electronic appliance, or for any other reason, then you can simply compare the various personal loan schemes offered by various banks and apply for the one most suitable for you.
How does a personal loan work? You borrow a loan when you require credit. Once you submit your loan application to a lender for a personal loan, the lender verifies and approves it. Post this, the loan amount is disbursed into your bank account. Once you receive the loan amount, you will need to repay the lender via EMIs for the loan repayment tenure.
What is the maximum amount of loan I can get? The maximum amount of loan depends on your monthly income. In India, there are lenders who offer up to Rs.40 lakh.
What is a prepayment and how does it help in repaying my loan? If you happen to get some extra money, you can pay it towards your loan even before the EMIs are due. This is called prepayment. Every prepayment you make goes towards reducing the outstanding principal component of your loan. And since the principal reduces, your interest cost will also reduce. Also, your tenure gets shortened this way, helping you pay off the loan ahead of time.
What is the CIBIL score required to avail a personal loan? Usually, banks will require your CIBIL score to be above 720 to provide a personal loan. In case your credit score is less, your application may be rejected or the personal loan will be provided with high interest rates.
What should I do if my personal loan application is rejected? If your personal loan application is rejected, then it is mostly either due to your low credit score or you do not meet the eligibility criteria. If you meet the eligibility criteria and improve your credit score, your personal loan application will not be rejected.
Can you get a mortgage loan if you have a personal loan? Yes, you can, but it depends on your income and your ability to pay the EMIs of both the home loan and the personal loan.
What can a personal loan be used for? A personal loan can be used for holidays, to start a small business, purchasing consumer goods, to purchase a vehicle, to pay friends and family, to pay medical bills, and debt consolidation.
What is a pre-approved personal loan? A pre-approved loan is one where the customer can apply for a loan and possibly doesn’t need to submit documents or go through the verification process as he/she shares a healthy relationship with the bank as an existing customer and has a clean repayment record.
What is Standing Instruction (SI)? Standing instructions are basic instructions given by a bank customer to the bank to make a payment to another bank account or the bank at regular intervals or as a one-time payment, as per the requirement. As per the instructions, the money in the bank account of the customer will be debited and remitted to another account as per the specified time of the customer.
Do personal loans offer tax exemptions? Personal loans only offer tax exemptions if you are using the loan amount for renovation of your house, to pay for educational expenses, or to expand your business.
Can I get a personal loan during Covid-19? Yes, some of the leading banks in India were offering COVID-19 personal loans. If you wish to apply for a personal loan, you can do so by applying for it online on the bank’s official website. Applying online was recommended since the process was fast and hassle-free and allowed you to maintain the social distancing norm laid down by the Government of India. The interest rates offered vary from bank to bank and hence it was recommended you compare various personal loans and then avail the one which you felt was suitable for you. However, due to Covid now being kept under check and with social distancing norms being eased, Covid based personal loan schemes offered by most banks have now ceased to exist. However, you can check with your bank whether they are still offering these types of personal loan schemes to their customers or not.
How is my prepayment fee calculated? This depends on your lender. Some lenders charge you a fixed fee for each prepayment. Others may charge you a percentage of the amount outstanding or a percentage of the amount prepaid.
Do personal loan pre-closures have certain terms and conditions? Yes, financial lenders have their terms and conditions when it comes to personal loan foreclosures. Usually, financial lenders allow loan pre-closures only after the payment of 12 EMIs and charge a foreclosure charge + GST on the outstanding loan amount.
How can I get my address changed in my Personal loan account? You can change your address of residence linked to your Personal loan account via your net banking account or by visiting the bank branch. At the bank branch, you will have to fill in the address-change form and submit relevant address proof documents that are authorised or attested by the State or Central Government.
What is the minimum salary that an individual is required to earn to apply for a personal loan? The minimum salary requirement will vary from lender to lender. Most lenders, however, will require you to earn at least Rs.15,000. If you reside in a metropolitan city, you may have to earn between Rs.20,000 and Rs.25,000.
What should I do if I want to repay my loan (partially or in full) during the loan repayment term? Most lenders will allow you to make pre-payments or pre-close your loan during the loan repayment term. You will, however, have to pay a nominal charge to the lender for doing the same. Keep in mind that most lenders will only allow you to prepay or pre-close your loan after 1 year of borrowing the loan. If you want to prepay/pre-close your loan, ensure that you inform your lender of the same.
How do I cancel my personal loan after the loan is disbursed? You can cancel your loan application before the loan amount is disbursed into your account by submitting a written application for the same. You will also need to pay the loan cancellation fee to the lender. Once the loan amount has been disbursed into your account, most lenders will not allow you to cancel it. You can, however, pre-close the loan. If you are thinking of cancelling your loan because you pay a high interest rate on your loan, you can consider transferring your outstanding loan balance to another bank or financial institution.
How often should I repay my Personal loan? This depends on the lender you choose. Normally, every personal loan repayment is calculated on the basis of a monthly repayment pattern. It includes the principal and interest components that you’re expected to repay each month.
Are there any charges for prepaying my personal loan? Some lenders may ask you to pay a fee if you want to prepay a part of your loan. Others may either waive the fee or may not have prepayment charges at all.
When will a bank reject my personal loan application? A bank can reject your personal loan application if you apply for a loan for which you are not eligible. It can also reject your application if you fail to submit the documents it requires.
How to Track Personal Loan Application status? BankBazaar.com offers its loan applicants an active tracking tool through both email and SMS allowing them to track daily updates of their loan application.
How do I obtain a Duplicate Repayment Schedule for my Personal loan account? You can request the bank for a personal loan duplicate repayment schedule either via your net banking account or by calling the customer care unit or by writing to them via your registered email ID.
What happens if a personal loan is not paid? If the borrower fails to pay the EMI, the bank charges a penal interest on the overdue amount. Financial lenders usually charge a penal interest of 2%-3% per month of the overdue amount.
Where can I get a personal loan with bad credit and no checking account? It could be hard to get a traditional personal loan from a bank with a poor credit score and no checking account. However, certain lenders offer types of personal loans such as payday loans for those with a poor credit score. That said, the interest charged will be quite high.
Can I pay more than my EMI in personal loan? Over your EMI, after a certain period following the disbursement of the loan, you can make a part-payment towards the loan. The part payment will further deduct the outstanding principal amount of the loan.
What is the easiest personal loan to get? Compare and apply online for personal loans at BankBazaar and get an instant assistant from them.
How much loan can I get if I earn a monthly salary of Rs.60,000? For personal loans, most lenders fix the minimum monthly income requirement between Rs.15,000 and Rs.25,000. Thus, if you have a monthly income of Rs.60,000, you can be fairly certain that you won’t find it difficult to borrow a loan. The exact amount that you will be offered will, however, vary based on your repayment capacity, debt-to-income ratio, the lender’s terms and conditions, etc.
How much loan can I get if my salary is Rs.25,000? With a monthly salary of Rs.25,000, you are likely to be eligible to borrow a loan. However, the lender will also check if you have any other outstanding loans, your credit score, repayment capacity, etc. before deciding how much you can borrow. You can use a personal loan eligibility calculator tool to know how much you are eligible to borrow with a monthly salary of Rs.25,000.