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Writer's pictureEric Lee

Things you can do to improve for getting your personal loan approval


7 tips to avoid your personal loan application being rejected


7 most common reasons personal loan applications are rejected
  1. Bad credit history. While “bad credit” is usually show in your Ctos and ccris report. Ctos Problem mean you have some people or bank sue you or you have trade reference black listed by Maxis, Celcom, Singer, Money Lender, Motor Shop or any company which have subscribe CTOS. if your ccris repayment show 3 months not pay for your repayment record then most of the bank will reject your loan application. Other example, you may have never defaulted on any loans or credit cards, but you might have applied for a lot of loans in the past 6 months. That why Check your ccris and ctos credit score to see where you stand before applying.

  2. Insufficient income. The bank can’t approve your application if they find that your income won’t sustain your monthly repayments. Banks usually have a minimum income you need to earn in order to be eligible for the loan, so check the eligibility criteria. If your Commitment high you need higher income to fulfill the DSR (Debt Service Ratio).

  3. No Credit Card record. Certain bank will refer to your credit card limit and usage, If usages of your credit card is more then 80% a very high chance of rejection.

  4. Incorrect details or can't Verify. Banks will usually verify the details you put in your application, and if they may reject your application if they find inconsistencies or incorrect detail.

  5. Date of Business Registration and insufficient employment history. Banks are very meticulous about the stability of your job or business. Quite a number of banks insist that you should have a stable job or a confirmed staff, if business owner you need to have 2 year of business registration otherwise they may reject your loan.

  6. You hold too many clean loans. If you’re currently holding several clean loans (Unsecure loan), this could give a bank cause to reject you. You need to have some secure loan like Housing or Hire purchase.

  7. No Track of loan record. Many bank need to see your past one year repayment history before they can process your loan. They will justify whether you are a good pay master or a bad pay master just to refer from you ccris report.

7 tips to avoid your personal loan application being rejected and increase your chances of approval

You’ve seen the reasons your personal loan application may be rejected, so how do you avoid these?

  1. Check the credit requirements. You should check what credit rating your bank requires, certain bank accept ccris with 2 mths outstanding record and some bank accept ctos trade reference blacklisted under debt below RM300 or some bank does not check Ctos trade reference and then see if you meet them. If you’re required to have good credit, it usually means no negative listings on your file. If you’re unsure, it’s best to ask the bank before you apply As previously mentioned, you can check your credit ctos and ccris online to get an idea of your credit position.

  2. Find out the income requirements. Each lender will have a different minimum income requirement, The minimum income for personal loans is listed on simfunding.com review pages, so you can confirm this before you apply. And calculate the DSR (Debt service ratio), make sure you have enough income to serve the new loan installment. Ask the bank for their DSR, it is ranging from 60% - 80% refer to total income.

  3. Need Credit Card record. Check with the banks to see they need a credit card as reference to apply their personal loan. Look for bank that don’t need to have a credit card.

  4. Verify your details. Double-check your details and information before you submit your application so that the banks has no reason to reject your application on this basis. Is your application filled out entirely? Is all the information accurate? These are the type of questions that can aid you in verifying your details, and make sure your company and you is contactable, if credit officer can’t get to verify you or your company, it automatic rejected.

  5. Check that you meet the employment requirements. Do you need to have established employment at one company for a certain amount of time? Do you need to be receiving a regular income into your bank account via direct deposit? See what the bank requires of your employment and ensure you meet that. And If you are doing business make sure you have a business registration more then 2 years.

  6. Don’t hold more clean loans than you can afford. In short, banks want you to be able to repay your loan. The main reason bank won’t lend to you when you have a number of clean loan balances already is because they don’t think you’ll be able to pay back the new clean loan. You could look at consolidating your clean loans or repaying some of them before applying for a new one.

  7. No Track of loan record. If you are new to bank, you have to look for banks that accept no track record of loans. They is few bank that accept new to bank customer.

Important things to consider when applying for a personal loan
  • Limit your number of applications. When you apply for a loan, the application is counted as an inquiry on your ccris credit report. Too many application can negatively affect your credit score.

  • Keep your credit report clean. You can make this happen by paying your debts on time and not defaulting on any loans. It’s important to keep track of your financials and not take on loans you can’t afford.

  • Check your credit report. You should keep monitoring your credit report and ensure the information is up to date. You may need to dispute an error on your credit report if you find something incorrect

The Bottom line is

There’s no way to completely guarantee that your personal loan application will be approved. Even if you meet all the eligibility criteria listed by a bank, the bank can still reject your application at its discretion. What you can do is avoid common mistakes that lead to personal loan application rejection and follow the tips we’ve discussed to improve your chances of approval.

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