How to Avoid Loan Rejection: 7 Insider Tips Lenders Don’t Tell You
- Pooja Parvatkar
- Nov 19
- 3 min read
Applying for a personal loan can feel stressful, especially when you’re unsure whether the bank or NBFC will approve your application. A single rejection can affect your credit score, reduce future eligibility, and create unnecessary anxiety. The good news? You can avoid rejection by understanding exactly what lenders look for when you apply for a personal loan.
Here are 7 insider tips lenders rarely reveal — but borrowers must know before applying.
Maintain a Clean Credit Report (Check for Errors Too)
Your CIBIL score is the first filter lenders use. Anything below 700 reduces your chances of approval. Improving your CIBIL score is of utmost importance.
What borrowers often don’t know:
Even small errors like duplicate accounts, incorrect outstanding amounts, or old closed loans can cause rejection.
You have the right to raise a dispute for free with CIBIL, Experian, or CRIF.
Pro Tip: Download your free annual credit report and fix errors before applying.
Control Your Credit Utilisation — Stay Below 30%
Lenders check how responsibly you use your credit. If your credit card is constantly maxed out, lenders assume you’re financially stressed, even if you pay on time.
Keep utilisation:
Below 30% for best approval chances
Below 50% at all times
Pro Tip: Make a mid-cycle payment to bring utilisation down before applying for a personal loan.
Don’t Apply With Multiple Lenders at Once
Many borrowers think applying everywhere increases their chances. Actually, it hurts your score. Each application triggers a hard inquiry, and too many enquiries signal “credit hunger,” making lenders nervous.
Pro Tip: Use an aggregator like One Day Finance, which checks offers from multiple lenders without harming your CIBIL.
Keep Your FOIR Under 40%
FOIR = Fixed Obligations to Income Ratio
It tells lenders how much of your income is already going toward EMIs.
If your EMIs exceed 40–50% of your monthly income, lenders may reject your loan — even with a good CIBIL score. Calculate your EMI before applying.
Fix this:
Close small loans
Pay down credit card dues
Consolidate multiple EMIs into a single lower EMI
Ensure Stable Income & Job Continuity
A lender will almost always reject applications with:
Frequent job switches
Less than 6 months in the current job
Irregular income (for self-employed borrowers)
Pro Tip: Complete 6–12 months in your current job to maximise approval chances.
Provide Correct Documents — No Mismatches
Even small mismatches such as spelling differences in your name or address across Aadhaar, PAN and bank statements can lead to automatic rejection.
Checklist before applying:
PAN and Aadhaar match
Salary slips show clear credits
Bank statement has no anomalies
Address matches your ID proof
Apply Only for the Amount You’re Eligible For
Lenders calculate your eligibility based on:
Income
Company category
CIBIL score
Existing EMIs
Age
Loan tenure
If you apply for a much higher amount than your eligibility, it increases your odds of rejection.
Pro Tip: Ask One Day Finance to run an eligibility check to know exactly what amount you should apply for.
How One Day Finance Helps You Avoid Loan Rejection
At One Day Finance, we handhold borrowers from start to finish to increase their approval chances.Here’s what we do:
Check eligibility with multiple lenders
Match you with banks that fit your income & profile
Help reduce your FOIR by choosing optimal tenures
Advise on improving CIBIL score
Assist with correct documentation
Guide you through consolidating EMIs if needed
Our goal is simple — Get your loan approved fast and safely.
Final Thoughts
Loan rejection is not about luck. It’s about knowing what lenders check behind the scenes.By following these 7 insider tips, you can significantly improve your chances of approval and borrow with confidence.
If you want expert assistance and the best loan offers, reach out to One Day Finance today.
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