Having a high credit score is a must for lending banks but it does not guarantee the loan approval. Other than credit score, there are also other factors considered before granting a loan. Eligibility and quantum of loan to be given depends on different parameters and criteria which may differ from bank to bank.
Approving of your loan application depends highly on your CIBIL credit score. But a host of other factors are required for your loan application approval process too. The reasons for rejection of a loan are:
Over leveraged:
You are expected to have at least 40% of your income towards everyday living expenses. When you are paying more than 60% of your income towards various dues i.e. car loans, home loans & credit card card bills or have way too many active loans, you are considered to be “over leveraged” by banks,
Though your CIBIL score may be above average(because you are applying for more credit) and you would be prompt in paying your loans you would still be rejected since banks consider you as “over leveraged”.
CIBIL report having Derogatory remarks:
Your credit report is plagued with derogatory remarks such as "Settled “and "Written Off" status. Financial institutions(NBFC’s) and Banks are cautious when lending money to individuals who have such derogatory remarks on their report because such remarks indicate that you didn't pay off the payment in past transactions or if you did make the payment you did not pay it in full. Most banking agents will insist that you go with a "Settlement" with the bank as you won't have to pay the full amount, but don’t get lured and always go for a full closure.
Credit Hungry:
When we are in urgent need of money, we do the mistake of applying in multiple banks and financial institutions all at once. For example, if are applying for a loan in Bank P, Q as well as R. You will think that the other bank will not be aware of you applying in the other two banks. But this is a wrong thinking because every application will be recorded as an inquiry for credit.
Now, this could result into: your CIBIL score being lowered by at least 10 – 17 points (approximately) every time you even inquire for loans. And also this will give the impression to your lenders that you are always borrowing beyond your comfort level.
Guaranteeing a defaulter:
As a guarantor of the loan you are equally liable to pay the loan as is the borrower. If you are the guarantor for a loan which is showing late payment pattern or has been settled with the bank with partial repayments, your loan gets affected too, for guaranteeing a defaulter.
Do not have adequate taxpaying history:
If for some reason you have recently started filling returns then the bank may reject your loan application. Banks usually need at least two years worth of income tax to be filed by the borrowers they consider favorable.
Problems with credit score ? Loan application rejected ?
Don't worry just hurry..book an appointment now only at www.cibilconsultants.com
Source: Secondary
Approving of your loan application depends highly on your CIBIL credit score. But a host of other factors are required for your loan application approval process too. The reasons for rejection of a loan are:
Over leveraged:
You are expected to have at least 40% of your income towards everyday living expenses. When you are paying more than 60% of your income towards various dues i.e. car loans, home loans & credit card card bills or have way too many active loans, you are considered to be “over leveraged” by banks,
Though your CIBIL score may be above average(because you are applying for more credit) and you would be prompt in paying your loans you would still be rejected since banks consider you as “over leveraged”.
CIBIL report having Derogatory remarks:
Your credit report is plagued with derogatory remarks such as "Settled “and "Written Off" status. Financial institutions(NBFC’s) and Banks are cautious when lending money to individuals who have such derogatory remarks on their report because such remarks indicate that you didn't pay off the payment in past transactions or if you did make the payment you did not pay it in full. Most banking agents will insist that you go with a "Settlement" with the bank as you won't have to pay the full amount, but don’t get lured and always go for a full closure.
Credit Hungry:
When we are in urgent need of money, we do the mistake of applying in multiple banks and financial institutions all at once. For example, if are applying for a loan in Bank P, Q as well as R. You will think that the other bank will not be aware of you applying in the other two banks. But this is a wrong thinking because every application will be recorded as an inquiry for credit.
Now, this could result into: your CIBIL score being lowered by at least 10 – 17 points (approximately) every time you even inquire for loans. And also this will give the impression to your lenders that you are always borrowing beyond your comfort level.
Guaranteeing a defaulter:
As a guarantor of the loan you are equally liable to pay the loan as is the borrower. If you are the guarantor for a loan which is showing late payment pattern or has been settled with the bank with partial repayments, your loan gets affected too, for guaranteeing a defaulter.
Do not have adequate taxpaying history:
If for some reason you have recently started filling returns then the bank may reject your loan application. Banks usually need at least two years worth of income tax to be filed by the borrowers they consider favorable.
Problems with credit score ? Loan application rejected ?
Don't worry just hurry..book an appointment now only at www.cibilconsultants.com
Source: Secondary
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