Every day there are thousands of personal loan rejections happen. If this happens, the lender is required to provide a report to the borrower along with the rejection reasons.

The borrower should know clearly what led to this rejection. If some of them are not able to understand, they need to find out and connect with the lender.

Several reasons can be corrected in case a loan is rejected. But sometimes, it is a time taking process to rectify the reason for reapplying for the loan.

A loan is the only option during specific financial emergencies if you cannot rely on your savings. In such cases, having all your factors in place is essential to get your loan approval.

Eliminating the rejection factors

In the case of personal loans, there is no specific usage that is mentioned. Hence, every individual may avail of personal loans for different reasons. Your reason may become a cause of projection if you are unaware of it.

Reasons for loan rejection

There are several reasons for personal rejection that are mentioned below:

1. Low credit score

One of the significant reasons for loan rejection is the credit score. In case of a low score, the lender is at risk and does not accept it.

Hence, it is advisable to maintain a proper credit score that helps you to get quick loan approval.

Maintaining a credit score is crucial for any loan, such as unsecured personal or secured loans In Ireland, many people face rejection due to this.

There are several ways to improve your credit score. You can check out different sources on the internet and connect with credit rating engine sees to know more about them.

2. Multiple loan applications

If you make multiple loan applications at one time, this can be a reason for rejection. The lender can be distressed with your too many applications.

It does not signify financial stability. It raises a question about your financial credibility and your repayments.

3. High amount of existing debts

Many people go for more loans if they are already in debt. Too many existing debts can also become one of the important reasons for your loan rejection.

This way, you won’t be able to repay the loan on time, and there are high chances of default.

Lenders would prefer to avoid getting into it and being burdened with the borrowers’ pressure. On this ground, your loan application can be rejected by the lender.

4. Not meeting the income criteria

As a borrower, if you are applying for a loan and do not meet the income criteria, the lender will not approve your loan.

Your current income is an essential part of the eligibility criteria that must be adhered to. Your application might get rejected on the grounds of lower income.

5. An unstable employment history

Sometimes people have an unstable employment history. They are not having a stable job and may keep on hopping. This does not give a good impression to the lender.

If you are working permanently with an organization, it shows your stability in terms of finances and employment.

Without a stable history of employment, lenders do not focus on your loan application and are likely to reject it. Ideally, an experience of three years is highly appreciated by the lender if you are looking out for loan approval.

6. Missing or incorrect documents

As mentioned above, fitting into the eligibility criteria is very important. One of the factors is the documents. If there are certain incorrect documents in your file, you may not be approved for the loan.

Similarly, if there are missing documents, the case remains the same. Hence, before presenting your file, always check your documents, and if there is any incorrect information, immediately rectify it.

There should be no missing documents. For this, prepare a checklist and keep taking it once you put in all your required documents in your loan file.

7. Debt-to-income ratio is high

One of the significant reasons is your debt-to-income ratio. If that is too high, the lenders stay away from the borrowers. This means that your debt needs to be lowered as per your income, and you cannot pay it back.

With such borrowers, lenders also deal with caution. Your mortgage should be much less than your income as it signifies your financial stability.

8. Debts were not disclosed

If you’re applying for a loan with any kind of lender, you always have to disclose all your debts. The lenders usually go for credit checks on the borrower.

Loans without credit checks are only available when the lender is confident about the borrower.

If you are not disclosing and the lender finds out somehow, it can lead to a loan rejection. Further, it can put you in the bad books of the lender. If you’re trying to get your loan approved, always be clear about the debts that you have.

Sometimes the lender understands and may approve your loan with the existing debt as well. But if you are playing smart with the lender and not disclosing your debts, it will lead to rejection.

9. High risk for the lender

In some cases, the lenders have a higher risk. They are clear that the borrower is not able to repay their loan. This keeps the lender away from risky borrowers.

The lenders may take a risk and approve your loan, but only in specific cases. It primarily works for fast and short-term cash loans. You must assure the lender of your repayments and your current financial history.

10. Bad timing with life events

If you are struggling with your life events, it can also lead to rejection. For example, sometimes people apply for a loan but are going through any kind of legal battle or divorce or any kind of health issue.

It makes time bad for them, and they cannot stabilize themselves. Hence, if anything is going on for a long time, you may apply for a loan after it’s finished.


Availing of personal loans is easy. But it can be difficult for you if you do not pay attention to the rejection factors.

Always try to check with the above-mentioned factors and eliminate them from your life. You have to be clear about all the factors required by the lender.

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