If you plan to apply for a personal loan with HDFC Bank, it is best to understand the loan scheme and eligibility criteria. If your loan application and financial profile is not up to the mark, the bank will reject the loan. Here are some of the reasons for HDFC personal loan rejection.
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- Bad Credit History
A poor repayment record will hamper your credit score. It is your credit score, on the basis of which, the bank will decide if they wish to provide you the loan or not. For a personal loan, HDFC usually consider CIBIL score of 750+ as eligible and any lesser score may mean, your loan application could be rejected. It is important that you do not default in payment of credit card dues and EMI on loans. If any default in the past, your credit score will lower. Thus, check your repayment history before you apply for the unsecured loan with the bank.
- Dubious Purpose
Though a personal loan is unsecured and can be utilized to fulfil any expenses, the bank would still want to know for which purpose the money is required. If your response signifies an ulterior motive, then it may not grant you the credit. Thus, be clear with your intention regarding the loan and state that to the bank, even if it is not mandatory to do so. If the lender finds out that the purpose of loan is not credible, then the chances of loan rejection are high.
- Too Many Existing Loans
If you already have several debts, then HDFC bank may reject your personal loan application. It is advisable that you repay the existing loans and reduce your financial burden as much as possible, before applying for any new loan, especially if it is collateral free. The lesser are your financial responsibilities; greater are your chances of securing the loan, and vice-versa.
- Not Enough Income
The bank may not approve the loan if it finds that your income is not enough to sustain the monthly repayments. Any financial institution requires the borrower to draw a minimum monthly income in order to be eligible for the loan. Mostly, it is fixed at Rs. 25,000 per month. But, you should check the income eligibility criteria beforehand. Even if you draw the minimum income, HDFC will check your financial liabilities and outstanding debts and calculate your debt to income ratio to understand if you can be provided with the credit, or not.
- Insufficient Employment History
The HDFC bank requires a borrower to have at least 2 years of working experience, out of which 1 year of employment is compulsory with the current employer. You should have a stable job and the salary that you earn must get deposited in your bank account/salary account. This is the minimum criteria. If your job stability is not satisfactory in a way that you do not fulfil the minimum criteria or hop jobs often, then your personal loan will be disapproved.
- Incorrect Details in Application
It is very important that you provide correct details in your loan application. Fill the form carefully and avoid any inconsistencies, because if the bank spots any, it will simply reject your loan. State the details, as it is, like your name, address, income details etc. Do not feign anything or provide incorrect details or forged documents as penal action can be taken against such practises.
- Error in Credit Report
Before application, check your credit report for discrepancies. Error in credit report will certainly affect your credit score. Wrong payment entries can lower your credit rating. Also, checking payment history in report can identify if any purchase/payment was made without your permission. Fixing errors in your credit report will help you better your credit score.
Consider the above-given factors for HDFC personal loan rejection and proceed with your loan application with caution.