Most people take loans from banks or any financial institution for big expenses like home or car. They get loans only from financial institutions which have good CIBIL score. Some banks do not give loans to those with low CIBIL score and even if they give, then they have to pay a lot of interest on it. A good CIBIL score gives many relief from financial institutions such as giving less interest or relief in processing fees. Although the CIBIL score is good, sometimes the loan application gets rejected.
Despite the better CIBIL score, income is the biggest reason for rejecting the loan application. Apart from this, another factor plays its role in getting your loan application rejected, that is, your age. Let us know what are the factors that can make a difference on your loan application and how they affect.
Loan application is rejected due to these reasons
Caution in lending to older applicants
Most financial institutions take extra care in giving loans to people whose age reaches retirement. Due to limited regular income of people who have reached retirement age, financial institutions take care in applying to such people. The loan application may be rejected despite a better CIBIL score due to the uncertainty of filing EMI after retirement.
Applications will be rejected due to low income
You have to disclose your income while applying for a loan. With this, the applicant’s ability to repay the loan is assessed. Under this, financial institutions look at how much the loan applicant’s income is and how many people depend on it and how stable is the source of income i.e. how likely the income is to continue in the future. If the income is less, then despite the better CIBIL score, there may be problems in passing the loan application.
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Not having a stable job
If you apply for a loan from a financial institution, then they demand a work experience of at least two years. Financial institutions make this demand so that the employment status of the applicant can be assessed and the risk of default can be minimized. If the applicant is not doing steady job at any one place, then it reduces the chances of getting the loan application approved.