Wednesday, 4 August 2010

Guide lines for a loan application

When you apply for a loan you have to keep in mind some important points. Normally you apply for a loan only when you wish to purchase any new asset or to meet any urgent expenditure and you have not enough money in hand to meet the requirement. But some reason your loan application may be rejected. Normally when you get rejected a loan or any default in payment of loan your name will be recorded in some Credit Information Agencies and an institution which provides loan can easily verify the details from such agencies.

Insufficient Income to meet the repayment: The first and foremost thing a loan provides checks that whether the person who applied for loan have the ability to repay the money according to the terms of loan agreement. If they are not convinced that you could repay the money without much difficulty they won’t allow loan for you.
Your credit history:  If you have a bad credit history such as not paying E.M.Is or late payment of loan etc. the chances of rejecting your application is very high. So clear all dues and even close all possible loans to get approved your loan.

Apply for high amount of loan. The loan provides evaluates you for your repayment capacity. IF you ask for a high amount of loan which you cannot repay may be rejected without further thought.

Your residential address: Sometimes your residential address also may create problem for the approval of your loan. If any loan default is recorded in your address, I mean anybody lived in your address may have taken loan and may be a defaulter and your address may be blacklisted in the credit information records.

Default in payment of loan payments of credit card payments. If you have a large amount is pending due in your credit card account or if any repayment dues are there in any loan account, your application will be rejected.

Number of existing loans and low income. This is another reason to reject your new loan application.

Bad credit of your guarantor. If your guarantor is a defaulter of any loan payment, the chances of approving your loan is very low. And also if your co-applicant has a poor track record in credit information bureau your loan may be rejected.

If you choose the co-applicant is your siblings or you do not have a job with permanent nature you loan may be rejected.

If your any loan application has been rejected in any previous time the chances of rejecting your loan is high.

So apply for a loan only after thinking twice and only if you are in necessary condition to take a loan. Because all the above reasons and may be your plentiful loan also attracted rejection.

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