Banks and loan centres are paying extra attention to their lending services. In line with the added focus, the loan disbursal process has also improved in terms of speed. Because of these changes, they refuse to subject themselves to certain credit norms and loan defaults.
Loan rejection is inevitable and it can also predict your credit score. Before you assume that it’s your credit score’s fault, consider checking your employment status first.
Changing Jobs Frequently
Some banks and loan centres consider an applicant’s job stability. During the review process, they consider it favourable if you remain employed for at least 6 months. So if you have a track record of changing jobs every now and then, you might be at high risk.
According to Rapid Loans, a local loan centre, a history of job hopping is a signal to lenders that you might just end up jobless, which raises the question of whether you will have the financial capacity to pay off future loans or not. Some centres do not approve loan applications if you are serving a notice period.
Need More Work Experience?
Because of today’s fast paced lifestyle, a number of younger employees are eager to apply for loans. From personal loans to their first credit cards, newbies are eager to start their loaning experience. But for some lenders, work experience is an important factor before they approve an application. Unless you have at least a year’s experience, applying for a loan might be tricky.
Before you apply, check with the lender first. If you want to ensure approval, wait at least a year or until after you’ve earned some valuable work experience.
Risky Jobs = Risky Loans
For some lenders, approving applicants with hazardous jobs isn’t an option. If you work at a chemical factory, banks and centres are hesitant to offer loans without any insurance. To increase your chances of approval, you can switch from a high-risk job to a regular one. But if this isn’t an option, a loan protection plan can also help your case.
Bad credit isn’t the only determinant of loan rejection. Sometimes, your employment background comes into play. Always consult with lenders first before jumping in and risking a rejection.