By 
Professional loans are financial advances which come with customised eligibility criteria and features to provide easy and comprehensive financial assistance to professionals.
However, applying for such a loan does not guarantee approval. Many applicants face rejections on their applied professional loan due to a combination of several factors. Here is a look at some important reasons that can lead to the rejection of your application.
- Multiple loan applications
You should apply for a loan only when it is necessary. Frequent loan or credit card applications can be a sign of your credit-hungry nature. Lenders avoid providing loans to such people. Furthermore, ensure you make only a single professional loan application to one lender, instead of multiple lenders. Doing so improves your chances of availing the credit.
- Insufficient credit score
To ensure the maximum chances of availing a loan, you need to, ideally, keep your CIBIL score above 750. Lower scores reflect a poor credit history and a likelihood of defaulting on loan repayments. If the rating is below 750, you can improve your credit score in 5 easy steps. In some cases, your credit score can be affected through no fault of your own, but due to errors in the credit bureau’s database. Inform these errors so that they can be rectified at the earliest.
- Insufficient or irregular income
To avail any loan you must show a stable income that your lender deems sufficient to handle personal liabilities as well as the credit repayments. If your income is lower than the minimum requirements, availing a professional loan is difficult. Boost your monthly earnings or apply with a co-applicant in such a case.
Furthermore, loan applications are also rejected in the case of self-employed individuals who have a fluctuating income. For instance, if you earn Rs. 40,000 in February and just Rs. 15,000 in March, NBFCs can disqualify from availing these loans.
- High debt to income ratio
If you already have outstanding debts and several credit card payments to take care of every month, you are likely to face loan application rejection. Ideally, you must maintain a debt to income ratio below 50% to improve your chances of successfully applying for additional credit. Therefore, the best thing to do is to pay off some of your other loans and then apply for the professional loan.
- Problem with documents
The information you provide on the loan application form must match the reality of your situation. Any inconsistency in the information and your documents can disqualify you from the loan. For example, if you say your monthly income is Rs. 50,000, but your bank account statements reveal that your earnings are, in reality, Rs. 40,000 per month, lenders can reject your application.
Ensure you are honest and provide accurate details, especially regarding your earnings. Every lender requires your income verification before sanctioning loans, so there is no point in lying.
Prevent the above-mentioned problems and you can avail loans conveniently. With instant approval options, loan disbursal usually takes place within a day or two.
It works as best loan for self employed as with professional loans, doctors, engineers and chartered accountants have an opportunity to become self-dependent. For those who already have established businesses, these loans provide a chance for growth and expansion.
