Things To Do If Your Personal Loan Gets Rejected - Kotak Bank

11 MARCH, 2020

Personal loans are favoured by the borrowers due to their easy availability. Banks or other lending organizations readily approve personal loan applications. However, there are cases when the application for a personal loan has been rejected due to several reasons. If you are one of such people whose personal loan application has been rejected, then you can do the following things to get approval on your personal loan application in the next try.

Examining the Credit Report
When it comes to applying for any type of loan, your credit report is one of the most critical tools used by lending institutions. Therefore you must thoroughly examine your credit report while applying for a loan. Now, after rejection, you need to examine the inaccuracies (if any) present in your credit report. Make sure that your credit report is clean while applying for a personal loan.

Understanding the reason behind the rejection
When lenders reject a loan request, they are required to send an adverse action notice which enlists the reason(s) behind the rejection. This notice mainly consists of the reasons for rejection like unsatisfactory credit score, faults in credit history, etc. and the name of the institute that provided this information to the lender. So, when you receive such notice, evaluate it carefully in order to get your loan application approved in the next attempt.

Improving Credit Score
Your credit report and credit score are two of the most important factors that influence the likelihood of getting the personal loan application approved. Therefore, if your loan application is rejected, improving the credit score increases your chances in the next attempt. To improve your credit score, you can do the following things,

  • Clearing-off all old credit accounts
    Any unpaid credit account reflects badly in your report. Therefore, clearing them on time is the best way to improve your credit score.
  • Being punctual while paying utility bills
    Delayed payment reflects negatively in the credit report, and eventually reduce your credit score. So, you must not push your bill date while preparing to re-apply for a personal loan. 
  • Avoiding full utilization of credit card limit
    Maxing out your credit card is a sign that your income sources are not sufficient, thus this habit reflects negatively on your credit score.  

Lastly, the loan inquiries you made in the past few months also affect negatively on your credit score. Therefore, if you are planning to apply for a personal loan, do not make other inquiries until you are fully prepared for it.

Signing up for credit monitoring
While working to improve your credit score, you must monitor your progress. For this, you can apply to get an annual free copy of your credit report from credit bureaus like CIBIL, Experian, etc.

In order to get your personal loan application approved after rejection, you need to gradually build your credit score and clear your credit report. If you be patient and adopt the above habits, it becomes much easier to avail a personal loan the next time you apply.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.

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Frequently Asked Questions

What can a personal loan be used for?

Personal Loan can help you meet unexpected expenses such as wedding expenditure, school or college fees, dream vacations, home renovation projects or even for the purchase of consumer durables. 

 

Applying for a personal loan is a lot easier, quick, and convenient with Kotak Mahindra Bank.Click https://www.kotak.com/en/personal-banking/loans/personal-loan.html to apply for the same. 

 

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Do I need to provide any security or collateral to obtain a personal loan?

No, you do not have to provide any security or collateral to obtain a personal loan. Personal loan is a type of unsecured loan. This essentially means that it is not backed by the guarantee of collateral. You are not burdened by the need to generate collateral like gold, property or shares, as with other types of loans. As there is no security to assure loan repayment, the bank will focus on the income and financial stability of the applicant. 

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What are the benefits of taking a personal loan with Kotak?

There are several benefits of availing a personal loan from Kotak bank. Some of the most notable benefits include:

  • prepaymentInstant approval – The bank approves the loan at a quick rate and this makes the process much easier to serve different financial purposes.
  • Easy Documentation – It comes with minimal documentation requirements to help you save time and cater to your emergency financial needs without any hassle.
  • Versatile usage – The personal loan can be used to fulfil many purposes. From funding a dream wedding to serving a medical emergency, it can be used to serve different planned and unplanned financial needs.
  • Attractive interest rate – The personal loan is made more convenient with an attractive rate of interest starting at 10.75 p.a.
  • Part Prepayment facility – In case of excess funds/financial liquidity , you can reduce your loan burden with part prepayment

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What is the eligibility criteria to apply for a personal loan?

The eligibility to avail Personal loan is as follows :

  • All Indian residents who are employees of either MNCs, Public and Private limited companies with a minimum age of 21 years and maximum age of 58 years are eligible for a personal loan.
  • Other Personal loan eligibility criteria :
    • Income Net monthly salary of Rs. 20,000/-
    • Minimum educational qualification - Graduate
    • Years in city - Minimum 1 year
    • Total work experience - Minimum 1 years

You can apply for a personal loan by following the below steps:

On Mobile banking

  • Go to Apply Now
  • Personal Loan ( If eligible)

On Net Banking

  • Go to Banking
  • Apply for Preapproved Personal Loan (If eligible)

Or

By simply clicking https://rcasprod.kotak.com/personal-loan?source=website&banner=ProductPageApplyonlineTab

Please Note: The same would be subject to approval. The time frame for the personal loan is 10 working days if approved.

Was this information helpful to you? Yes No

What is the best way to apply for a personal loan?

You can apply for a personal loan by following the below steps:

 

On Mobile banking

  • Go to Apply Now
  • Personal Loan ( If eligible)

On Net Banking

  • Go to Banking
  • Apply for Preapproved Personal Loan (If eligible)

Or

By simply clicking https://rcasprod.kotak.com/personal-loan?source=website&banner=ProductPageApplyonlineTab.

Please Note: The same would be subject to approval. The time frame for the personal loan is 10 working days if approved.

Was this information helpful to you? Yes No

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