Personal Loan Rejection: Impact and Reasons Behind It

A Personal Loan may be the best means to fund your dreams and unexpected expenses. But sometimes, there are situations where you or the lender may cancel the Personal Loan application, before or even after disbursement. This blog discusses the reasons behind Personal Loan cancellations, their effect on your credit score, and how to reapply. Read on!

Reasons for Cancellation of Your Personal Loan Application by Lenders

Here are some reasons why lenders may cancel your Personal Loan application:

• Poor Credit Score: For a Personal Loan, you should have a credit of 750 or above. A high score shows your creditworthiness. Lenders may reject your Personal Loan Application if you have a poor score.
• High Existing Debt: If you already have a high debt and are applying for a new loan, lenders may doubt your ability to manage a new debt. This can lead to rejection of your loan application.
• Not Meeting the Eligibility Criteria: Every lender has age, income, and employment eligibility criteria. If you do not meet the eligibility criteria, lenders may not approve your loan application.

Note: If lenders reject your Personal Loan application, it won’t impact your credit score.

Personal Loan Cancellation Charges and Its Impact on Your Credit Score

If Personal Loan cancellation is done from your side, you need may to pay some cancellation charges or penalties. This can also affect your credit score. However, the charges and impacts vary according to different stages:

• After Submitting the Loan Application: If you cancel your credit request after sending the application but before the lender requests your credit report, there is no impact on your credit score. At this stage, you don’t need to pay any charges.
• Before Disbursing Loan Amount: You have the flexibility of cancelling your loan request even before disbursement of the credit amount. Since the lender has already made an inquiry by then, it would not reduce your credit score. However, you may need to pay some cancellation charges.
• After Disbursing Loan Amount: You also have the option to cancel your loan request after receiving the credit amount. However, it must be done within the cooling-off period mentioned in the loan agreement. At this stage, you will need to pay some cancellation charges. Beyond this period, your loan cancellation request will not be processed.

Note: Personal Loan cancellation charges vary from one lender to another, depending on their policies.

Also Read - Tracking your Personal Loan Application Status

Personal Loan Cancellation Process

1. Visit the Lender’s website or branch.
2. Fill and submit the Personal Loan Cancellation Form.
3. Receive the lender’s confirmation.
4. Get your credit report updated.
5. Follow-up with the lender to resolve issues, if any.

How to Reapply for a Personal Loan?

You can reapply for a Personal Loan to access funds instantly in 3 easy steps:

Step 1: Click on the ‘Apply Now’ button.
Step 2: Fill in the required details on the loan application form.
Step 3: Upload necessary documents.

On successful verification, the loan will be transferred to your bank account.

Things to Keep in Mind When Reapplying for a Personal Loan

If you have made up your mind to reapply for a Personal Loan, you should keep certain points in mind:

• Make sure to pay your EMIs on time.
• Apply for Personal Loan from trusted lending institutions for the best terms.
• Do not make multiple loan applications within a short time.

To Conclude

There are several reasons why lenders may cancel your Personal Loan application. If the cancellation is initiated from your end, you may have to pay some charges. In case the lenders reject your loan application, ask for reasons, work on the same and reapply. Explore trusted lending institutions like Poonawalla Fincorp for easy and hassle-free loan application process to reapply. Remember to borrow wisely and pay your EMIs on time to improve your credit score.

Disclaimer

We take utmost care to provide information based on internal data and reliable sources. However, this article and associated web pages provide generic information for reference purposes only. Readers must make an informed decision by reviewing the products offered and the terms and conditions. Personal Loan disbursal is at the sole discretion of Poonawalla Fincorp.
*Terms and Conditions apply