In today’s time, a personal loan plays an important role as a financial solution for many people. However, despite its popularity, many applicants still face rejection. For example, people commonly use personal loans for medical emergencies, weddings, education, travel, or small business needs. Yet, a common problem remains — lenders reject the personal loan application or do not approve the loan at all.
If you are facing this situation, there is no need to panic. In fact, with the right approach, you can resolve most rejection issues. In this blog, we clearly explain:
- Why lenders reject personal loan applications
- What you should do if you are not getting a personal loan
- Which alternative loan options you can choose
- How you can improve your approval chances
Therefore, we strongly recommend that you read this guide till the end, as it offers practical and actionable solutions.
Main Reasons Why Personal Loans Get Rejected
First of all, you need to understand why lenders reject your personal loan. Unless you identify the reason clearly, you cannot find an effective solution. In most cases, lenders reject applications due to one or more of the reasons explained below.
1. Low CIBIL Score
To begin with, your CIBIL score plays a crucial role in personal loan approval. Generally, most banks and NBFCs prefer a CIBIL score of 700 or above. Therefore, when your score falls below this level, lenders often reject your application.
Some common reasons for a low CIBIL score are:
- You pay credit card bills late
- You delay or default on loan EMIs
- You have a loan settlement or write-off history
- You make too many loan or credit card enquiries
2. Low or Unstable Income
Another important reason for rejection is low or unstable income. If your income fluctuates or you fail to provide proper income proof, lenders assume that repayment may become difficult.
3. Lack of Job Stability
Similarly, frequent job changes, probation periods, or employment gaps reduce approval chances, especially in private-sector jobs.
4. High Existing Loan Burden
In addition, when you already carry multiple liabilities such as:
- Home loan
- Car loan
- Credit card outstanding
then your debt-to-income ratio increases. As a result, lenders view your repayment capacity as weak.
5. Incorrect Documents or Information
Finally, even a small mistake in your application form, KYC details, or income documents can cause rejection. Hence, you must ensure complete accuracy.
What to Do If You Are Not Getting a Personal Loan?
Now that the reasons are clear, let us move to the most important part — the solutions. By following these steps, you can significantly improve your chances.
1. Check Your CIBIL Score First
First and foremost, check your CIBIL score before you apply. At the same time, review the following:
- Whether any EMI remains overdue
- Whether any incorrect entry appears in your report
If you notice any error, raise a dispute with the credit bureau immediately.
2. Clear Old Pending Dues
Next, clear any pending credit card bills or overdue EMIs as soon as possible. Over time, timely payments help you improve your credit score.
3. Apply for a Lower Loan Amount
Instead of applying for a high amount, start with a smaller loan. For instance, if lenders reject a ₹5 lakh loan, apply for ₹1–2 lakh first.
4. Add a Co-Applicant or Guarantor
Moreover, when you add a co-applicant with a stable income and strong CIBIL score, lenders gain confidence in your repayment ability.
5. Apply With Your Salary Account Bank
Additionally, applying with the bank where your salary gets credited usually works better, as the bank already understands your income pattern.
6. Avoid Applying at Multiple Places
Most importantly, avoid applying at multiple banks or apps at the same time. Otherwise, multiple hard enquiries will reduce your CIBIL score further.
How to Get a Personal Loan With a Low CIBIL Score?
Even if your CIBIL score ranges between 550 and 650, you still have some options. Although the choices remain limited, you can still get approval.
1. Personal Loan From NBFCs
Compared to banks, NBFCs follow more flexible eligibility criteria. However, they usually charge a slightly higher interest rate.
2. Fintech Loan Apps
Similarly, some trusted digital loan apps provide small-ticket loans to low CIBIL profiles. Nevertheless, these apps charge high interest and offer short tenures, so use them carefully.
3. Secured Loan Options
If unsecured loans are unavailable, you can choose secured options such as:
- Gold loan
- Loan against Fixed Deposit (FD)
Because these loans involve collateral, lenders approve them more easily.
How Can Jobless or Self-Employed People Get a Loan?
For Jobless Applicants
Generally, lenders do not approve personal loans without income. However, you can still try by adding a co-applicant or opting for a secured loan.
For Self-Employed Applicants
On the other hand, self-employed individuals must maintain proper documentation. In particular, you should keep ITR records for the last 2–3 years and updated bank statements.
Also Read: What Is Bank Internal Credit Score and Why CIBIL Is Not Enough
How to Increase Personal Loan Approval Chances
To improve your eligibility in the long run, follow these smart financial habits:
- Keep credit card usage below 30–40% of the limit
- Pay EMIs and bills on time
- Apply for loans only when necessary
- Maintain long-term credit discipline
As a result, lenders will consider you a low-risk borrower.
Best Alternatives If Personal Loan Is Rejected
If lenders reject your personal loan repeatedly, consider these alternatives:
- Gold Loan
- Loan Against Fixed Deposit
- Loan Against Insurance Policy
- Salary Advance from employer
In most cases, these options offer easier approval.
Important Warning – Beware of Loan Fraud
Nowadays, many fake agents make false promises such as:
- 100% guaranteed loan approval
- Loan without checking CIBIL score
Therefore, never pay advance fees and never share OTP, Aadhaar, or banking details.
Services We Provide at LoanSarthak
At LoanSarthak.in, we do not just share information. Instead, we actively provide complete end-to-end personal loan assistance. If lenders reject your loan, we help you find genuine and profile-based solutions.
Our Personal Loan Services
- Free Personal Loan Eligibility Check (No impact on CIBIL score)
- Guidance for Low CIBIL Score Profiles
- Right Bank or App Selection
- Loan Rejection Analysis and Practical Solutions
- Co-Applicant or Guarantor-Based Loan Planning
- Support for Salaried, Self-Employed, and Business Profiles
- Safe and Verified Loan Partners Only
Importantly, we do not charge advance fees and we never promise guaranteed loans. Instead, we focus on safe, transparent, and realistic solutions.
👉 Therefore, visit LoanSarthak.in for a free consultation.
Conclusion
In conclusion, not getting a personal loan today does not mean you will never get one. When you improve your CIBIL score, strengthen your income profile, and choose the right lender, you increase your chances of approval.
Above all, avoid rushed decisions. Instead, improve your financial health first and then apply for a loan.
Disclaimer: Loan approval depends on lender policies and applicant profile. Please read all terms and conditions carefully before applying.