Personal Loan Rejection Reasons

A personal loan is one of the easiest ways to avail funds in times of crisis or emergency. With minimal documentation, personal loan processes have become quick and easy and can be availed from comfort.

However, not every personal loan application gets accepted by the lender. There are many personal loan rejection reasons. One of the most common personal loan rejection reasons is failure to meet personal loan eligibility or failure to comply with the process. Personal loans can also be rejected if the required documents are not submitted or submitted incorrectly.

Before availing a personal loan, it is imperative to do a personal loan eligibility check. This makes the process of applying for a personal loan as well as disbursal easier.

1. Failure to meet Eligibility Requirements

Most lenders have a personal loan eligibility checklist available on their website or app. At Finnable we also have a personal loan eligibility calculator page, so you can easily assess if you can apply and avail of a personal loan from us. 

  • Age: One reason for personal loan rejection is the age criteria. If the applicant does not fall between the age bracket of 23-47 years, you may not be eligible and face a personal loan rejection.
  • Self-employed, blue-collared workers: One of the personal loan eligibility criteria is to be employed in a public or private firm at the time of application. Being employed gives the lender confidence in the borrower’s ability to repay the personal loan.
  • Salary not getting credited in a bank account or receiving cash: According to the personal loan eligibility check, borrowers need to receive their salary in a bank account. Failure to get the salary credited or receiving cash raises doubts in the mind of the lender and is also a personal loan rejection reason.

2. Lack of Income: Salary Less than Rs. 15,000

To avail a personal loan, borrowers need to have a constant flow of income that is to be received from their employers. With this income, borrowers can repay the loan in easy EMIs. It also helps them create a repayment plan for the loan tenure. 

Lack of income is the main reason of loan rejection. Lenders generally do not give instant loans to individuals who have a salary less than Rs. 15,000 per month. In some cases, borrowers need to show that they receive a salary of more than Rs. 20,000 per month to be eligible for a personal loan.

3. Affordability

Before disbursing a personal loan, lenders ask for bank statements. Bank statements, as well as a credit report, outline the borrowers’ financial commitments. If the borrower has high, multiple and regular financial planning, it indicates that the ability of the individual to pay another additional financial outgo in the form of a monthly installment is low.  This makes lenders apprehensive to approve a personal loan for such an individual.

4. Document Mismatch

Applying and availing a personal loan is no longer a difficult task. Lenders ask for simple documentation which includes your PAN card, Aadhar card, salary slips, and bank statement. 

Any document mismatch would be a personal loan rejection reason. Before submitting the documents ensure that your name is spelt correctly in all the documents so that the lender does not have any doubts concerning your identity. 

Furthermore, attach all the documents at the time of application. Missing out on any of the documents will lead to either delay or rejection of the personal loan application.

loan decline reasons

5. Multiple Loan

Before disbursing a personal loan, lenders tend to do a CIBIL score check. If the numbers are in the borrower’s favor, the chances of loan approval are higher. However, during the CIBIL score check, lenders also get an insight into your previous loans. Having multiple loans that are currently active is one such personal loan rejection reason that many borrowers do not consider before availing a new personal loan.

  • Previous loan overdue: If a borrower is yet to repay a previous personal loan, lenders can find out about it by checking the borrower’s CIBIL score. An overdue loan reduces the lender’s confidence in the borrower, thus making them hesitant to disburse any funds to such individuals.
  • Previous loan not paid/defaulted: Loan default is a big personal loan rejection reason among lenders. Failure to clear old dues makes the borrower seem untrustworthy.

6. Low CIBIL Score

CIBIL score is a three-digit number assigned by CIBIL that summarises the customers’ credit history. An individual’s earnings, payments, borrowings, repayments and credit mix is scrutinised and a number between 300 to 900 is assigned to the individual. 

CIBIL score above 750 is considered to be a good CIBIL score by lenders; it is indicative that the individual has high creditworthiness. However, a low credit score diminishes the chances of availing a personal loan as lenders feel that the borrower will not be able to repay the loan on time, and the chances of default would be high.

how to fix your bad credit score

7. Job Insecurity

Stable job history is one of the primary personal loan eligibility criteria when it comes to availing a personal loan. If your employment history shows that you frequently change jobs, the chances of your personal loan application getting rejected are higher.

Additionally, the company where the borrower is employed needs to be registered or listed. Being employed in a non-registered or unlisted company can be a personal loan rejection reason.


Personal loans can be a boon during an emergency. They can help tide over certain situations that may require unforeseen expenses. Though borrowers can avail a personal loan for any reason, it is important to know why a personal loan application may get rejected. 

While keeping the above points in mind, it is possible to get a personal loan quickly from Finnable. Though Finnable does not ask for a CIBIL score, it is imperative to meet the other personal loan eligibility criteria to avoid rejection of your loan application. 

With Finnable’s personal loans, borrowers can avail an instant loan through Finnable’s online loan app or website. At Finnable, we offer personal loans, travel loans, or a loan for medical emergencies of up to Rs. 10 lakhs, with affordable interest rates and flexible repayment options. What’s more, our customers can track their loan status right from application to repayment through the app or website. 

Upgrade your life!

Apply for a loan at Finnable and live limitlessly

Learn with Finnable