Find out why your loan was rejected and learn simple steps to fix credit issues and boost approval chances.
Loan rejections can feel like a dead end—especially when the need is urgent. Yet, lenders always have clear reasons for saying no. Missed payments, high credit use, or a ‘written off’ tag can silently lower your chances. Understanding how to remove written off status from CIBIL or how to increase credit score puts you back in control. When you know what went wrong, you can fix it—and get approved next time.
Low or Poor Credit Score
Lenders look at your credit score to check if you repay loans on time. A score below 750 often leads to rejection. This number reflects your past payments, current debts, and overall credit use. If it is too low, banks may see you as a high-risk borrower.
How to fix it:
Pay all EMIs and credit card bills before the due date. Keep your credit use under 30% of your limit. Do not apply for many loans at once. Check your credit report for mistakes. Over time, these simple habits will help you increase credit score and improve your loan chances.
Written Off or Settled Loans in Credit History
A ‘written off’ tag in your CIBIL report means you did not repay a past loan in full. Even if you now earn well or pay bills on time, this one mark can stop your loan from getting approved.
How to fix it:
First, talk to your lender and clear any unpaid balance. Then, ask them to update your record with CIBIL. Knowing how to remove written off status from CIBIL helps clean your credit history. After the update, check your report to make sure the change appears. This step is key to regaining lender trust.
High Debt-to-Income Ratio
Lenders check how much of your income goes into paying current loans. If over half your earnings are used for EMIs, they may see you as overburdened and reject your new loan request.
How to fix it:
Try to close some small loans early or reduce credit card balances. If possible, look for ways to earn more. A lower debt load improves your credit health. Only apply for a new loan if you can handle the extra EMI without stress. This keeps your repayment record strong and improves your approval chances.
Unstable Employment or Low Income
Lenders look for steady income and job stability before giving a loan. If you switch jobs often or have just started working, they may not trust your ability to repay on time.
How to fix it:
Stay with one employer for at least 6 to 12 months before applying. This shows stability. If you are self-employed, share clear income proofs like tax returns and bank statements. A steady income builds trust and boosts your chances of getting approved.
Errors in Your Loan Application
Simple errors like a wrong PAN number or mismatched address can lead to rejection. If your details do not match across documents, lenders cannot confirm your identity or income.
How to fix it:
Check all details before you apply. Make sure your PAN, Aadhaar, and income proofs are correct and match each other. Upload clear and updated copies. Taking a few extra minutes to review your form can save you from rejection.
Applying for Multiple Loans at Once
Each loan application adds a ‘hard inquiry’ to your credit report. Too many in a short time can make you look desperate for credit, which worries lenders.
How to fix it:
Apply only when you meet the lender’s rules. Use pre-approved offers or soft checks that do not harm your credit score. Wait a few months between loan requests. This shows lenders that you manage credit wisely.
Mismatch Between Requested Loan and Eligibility
If you ask for a loan amount higher than what your income supports, lenders may think you cannot repay it. This often leads to rejection.
How to fix it:
Use a loan eligibility calculator to check how much you can borrow. Apply for an amount that suits your income. If needed, add a co-applicant with a steady income to boost your chances. This makes your request more acceptable to lenders.
Conclusion
Loan rejection is not the end. It is a signal that something in your financial profile needs attention. By understanding the reasons and taking the right actions, you can rebuild your credit image and secure approval in the future. Focus on correcting errors, improving repayment habits, and applying wisely. With time and effort, you can get back on track and meet your financial goals with ease.
