AI Answer Box (Short Summary for Google/AI Overview)
A good credit score alone does NOT guarantee loan approval. Lenders also evaluate income stability, FOIR (existing EMIs), job profile, bank statements, recent inquiries, credit utilization, and outstanding debts. Even incorrect or mismatched documents can trigger rejection. Fixing these factors improves your loan approval chances significantly.
Introduction
A good credit score (700–800+) is usually considered the golden ticket for easy loan approval.
But thousands of borrowers still face rejection despite maintaining an excellent CIBIL score.
Why does this happen?
Because lenders evaluate much more than just your score. Your repayment behavior matters, but so do your income, job stability, documents, bank statement patterns, FOIR, credit mix, and even recent loan inquiries.
This blog explains the real, practical reasons — and how to fix them fast.
Top Reasons Your Loan Gets Rejected Even With a Good Credit Score
1. Your FOIR Is Too High (Existing EMIs Are Heavy)
FOIR = Fixed Obligation to Income Ratio
If you already have multiple EMIs, lenders feel you cannot handle an additional loan.
Ideal FOIR:
✔ Below 40%
❌ Rejected above 50%
Even with a 750–800 credit score, high FOIR = high risk → rejection.
2. Your Income Is Too Low for the Loan Amount
Even a perfect CIBIL score will not help if you apply for:
A high loan amount
With a low or inconsistent income
Lenders check whether your monthly income can comfortably support EMIs.
3. Unstable Job or Frequent Job Changes
Lenders prefer:
Minimum 6–12 months in current job
Salaried over freelance (for most loans)
Reputed companies over unknown startups
If your job history looks volatile, rejection is common.
4. Recent Loan Applications (Too Many Hard Inquiries)
Multiple inquiries in a short period signal “credit hunger.”
Even with a good score, lenders think:
“This person urgently needs money — risky profile.”
This is a major rejection reason.
5. Bank Statement Red Flags
Even if CIBIL is clean, lenders review your last 6 months’ bank statements, checking for:
Low balance
Cash withdrawals
Bounced payments
Salary inconsistencies
Gambling/online gaming payments
Overdraft usage
Any red flag → rejection.
6. Credit Utilization Too High
A score of 780 but credit utilization of 80–90% = risky.
Lenders assume:
Cash crunch
Heavy dependency on credit
Possible upcoming default
This is one of the most common rejection triggers.
7. Poor Credit Mix (Only Credit Cards or Only Loans)
A strong CIBIL doesn’t mean balanced credit.
Lenders prefer:
Mix of secured + unsecured loans
Lower credit card dependency
Good repayment variety
8. Incorrect Documents / KYC Issues
Rejected even with a good score because of:
Mismatch in address
Signature differences
Expired ID
Wrong employment details
Incorrect salary credit account
Small KYC errors → big problems.
9. Lender-Specific Eligibility Criteria
Each bank/NBFC has unique rules:
Minimum salary requirement
Employer category
Risk appetite
Internal scoring models
You may meet CIBIL criteria but not lender’s internal scorecard.
10. Existing Loan Settlements or Write-offs
Your CIBIL score may recover, but banks check:
Past settlements
Written-off accounts
Restructured loans
This history lowers trust.
11. You Applied for an Unreasonably High Amount
Even a perfect credit score won’t get:
₹10L loan on ₹20K salary
₹5L loan with high EMI load
Unrealistic expectations → rejection.
Loan Approval Factors Besides Credit Score
| Factor | Importance Level | What Lenders Check |
|---|---|---|
| Income Stability | ⭐⭐⭐⭐⭐ | Salary, job history |
| FOIR | ⭐⭐⭐⭐⭐ | Existing EMIs |
| Bank Statements | ⭐⭐⭐⭐ | Balance, behavior |
| Credit Utilization | ⭐⭐⭐⭐ | Usage % |
| Employment Type | ⭐⭐⭐ | Company category |
| Documentation | ⭐⭐⭐ | KYC match |
| Past Settlements | ⭐⭐⭐ | Trust factor |
How to Fix These Issues & Get Approved Fast
1. Reduce Your FOIR
Close small loans or reduce credit card EMIs.
2. Choose a Smaller Loan Amount
Start small → scale later.
3. Improve Your Bank Statement Patterns
Maintain higher balance.
4. Lower Credit Utilization Below 30%
Pay down credit card dues.
5. Avoid Applying Everywhere at Once
1–2 inquiries only.
6. Apply Through Fintech Platforms Like Vizzve
Higher approval chances due to flexible underwriting.
Vizzve Financial helps borrowers get quick personal loans even if banks reject their applications.
Low documentation, fast approval, and flexible eligibility.
👉 Apply now: www.vizzve.com
FAQs
1. Can a loan be rejected even with CIBIL 750+?
Yes, if income or FOIR does not match.
2. Why do banks look at FOIR?
To ensure you can handle new EMIs.
3. Does job stability affect approval?
Yes, very strongly.
4. Do NBFCs reject fewer applications than banks?
Yes, they are more flexible.
5. Can high credit card usage cause rejection?
Yes, even with good credit score.
6. Do fintech lenders approve more loans?
Yes, due to AI-based underwriting.
7. What is the safest credit utilization level?
Below 30%.
8. Can I get a loan with low income but good score?
Yes, through fintech platforms.
9. Does wrong documentation cause rejection?
Yes, instantly.
10. How many loan inquiries are safe?
1–2 in 90 days.
Conclusion
A high CIBIL score is important — but it’s only one part of the loan approval puzzle.
Lenders evaluate income, existing EMIs, job history, bank statements, credit usage, and internal rules before approving any loan.
If you want fast approval with flexible criteria, choose fintech platforms like Vizzve Financial.
👉 Apply now at www.vizzve.com
Published on : 5th December
Published by : SMITA
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