3 Things To Do If Your Personal Loan Application is Rejected

Personal Loans

Personal loans are emerging as a reliable financing option due to their versatile nature and are approved almost instantly. However, due to their collateral-free nature, personal loan application status is largely dependent on whether an individual meets the lender’s eligibility criteria and submit the right documents. If you are planning to apply for a personal loan in the offing and your application gets rejected, don’t worry as you can fix the problem easily. 

Here are 3 actions you should take if your personal loan application status displays a rejection. 

  • Stop yourself from applying for a personal loan elsewhere

Every time you apply for a personal loan, the lender checks your credit standing via your credit score and credit report. This helps the lender asses your creditworthiness. However, lenders can fetch such reports from CIBIL or other credit bureaus only. Every request by a lender is registered with CIBIL and is regarded as a hard inquiry. Each inquiry reduces your credit score by a little and having multiple hard inquiries portrays you as a credit-hungry borrower. This reduces your credit score significantly. So, refrain from applying for one more quick personal loan or for multiple offers from different lenders. 

  • Find out the reason for the rejection

The next step is to understand the reason because of which your personal loan application status displays a rejection. Here are a few reasons why this may have happened. 

  • Insufficient income

A lender only approves a loan when they think that you can repay the debt in full on time. So, if your income is not at par with the lender’s minimum income criteria, they may reject your loan application. For instance, when you apply for the instant personal loan from Bajaj Finserv in Pune, the minimum monthly salary requirement is Rs.35,000. To be eligible for the loan in Pune, your salary has to be equal to or higher than this amount. 

  • Low credit score

A credit score represents your creditworthiness and repayment history. Typically, a high score of 750 and above allows you to qualify for a quick personal loan at favourable terms such as nominal interest rate and a sanction of the amount you desire. A low score on the contrary, leads to rejection.

  • Employment instability

Owing to the unsecured nature of the personal loan, lenders pay a lot of attention to your income and employment status. A stable monthly income and a job with a reputed organisation will help you get an approval faster. However, if you have moved from job to job very quickly in the recent past, don’t have stable salary deposits in your bank account, or work with an unreliable organisation, your personal loan application may be rejected. 

  • High debt to income ratio

A high debt to income ratio will also result in rejection because it means that your existing income is already being used to service debts. This induces lenders to proceed with your loan application with caution and view your application as potentially risky. If your debt to income ratio is over 45%, your application for a quick personal loan may be rejected. 

Apart from the important reasons above, your loan application may also face a rejection due to the fact that you may not have submitted the right documents or if there was an inconsistency in the paperwork regarding your personal details. 

  • Employ a suitable solution 

Based on the reasons for which you may have seen a rejection on your personal loan application status, you can employ a suitable solution as follows.


  1. In case of a low income, wait for a salary hike before submitting your next application for a personal loan. Additionally, you can also disclose income from other sources in your application, such as interest from investments and rental income. 
  2. In case you have a low credit score, apply for a secured credit card and use it carefully each month, being diligent with your payments in full during each bill cycle. This will help you build a good score in time. If you think a low score is a mistake, you can also request to view your credit report from credit bureaus like CIBIL to check for any errors or discrepancies and get them resolved. This will also improve your score. Finally, if you need to access funds quickly, you can apply for a personal loan along with a co-applicant who earns adequate income and has a good credit score. This is an easy way to help you see an approval on your personal loan application status. 
  3. In case you have been job hopping in the recent past, try to maintain employment stability for a few years and then make a fresh personal loan application. If you cannot wait that long, you can use the earlier method of applying for a quick personal loan with a co-applicant or even a guarantor. 
  4. In case of a high debt to income ratio, try to repay a major chunk of your existing debts before you apply for a personal loan. This will help your application get approved. 



Taking the above-mentioned actions will help you find an immediate solution to tackle a personal loan rejection; however, the best thing for you to do before you apply is to check a lender’s eligibility criteria for a quick personal loan before you apply. You can also check your credit score before proceeding. 

To increase your chances of approval and access money in just 24 hours, apply for a quick personal loan with reputed lenders like Bajaj Finserv. The simple eligibility criteria and minimal documents required by this lender hastens your approval and catapults you in a better position to address your funding needs. Once you qualify, you can access a quick personal loan of up to Rs.25 lakh at affordable personal loan interest rates. Check your pre-approved offers from Bajaj Finserv to view your tailor-made deal and expedite your financing.