Not getting a personal loan from banks? Here’s a way out!

The feeling of rejection is always hard to take, be it personal or professional. Loans are usually needed in times of desperate needs, a medical emergency or whatever and it’s up to the traditional financial strongholds to guide people through these perilous times. We’d love to be independent at all times in life but sometimes it’s just too stormy to swim. These are the times we look forward to the banks being our saviour’s but it’s hardly the case for most of us. For salaried employees, life is too tough and to add to that, stringent and worn out procedures are a roadblock we all could do without. Getting a loan for honest, hard working individuals shouldn’t be that big a deal really, but banks are reluctant to fund people who do not tick more than half of their established list of criterias leaving most of us stranded. Here are a variety of reasons for your loan application to be rejected.

1.Salary cap not reached:

No one loves revealing their pay scales to anyone for one reason or another. But when it comes to applying a loan, banks demand you to reveal your pay slip and if it isn’t more than or equal to INR 25,000, chances are your application would be rejected barring a family relation with a bank employee. This is a cruel filtration step which is unfair on a lot of levels.

2.Low CIBIL score:

If you haven’t availed a loan ever in your life, you’re probably going to be fighting a losing battle if you want one. CIBIL scores for such persons is 0/-1. CIBIL scores range from 350-900. Even a low CIBIL score would get you nowhere as it’s obvious that you’re bad at repayments. Why would a bank invest in such a person? You need not worry if you have a score of more than 500 as there’s a very high probability of you getting funded.

3.Work experience:

Turns out there’s a cap on this too. Banks usually prefer to fund individuals who have been employed for more than 2 years and for more than 1 year with the current employer. This gives them a general idea about how loyal the person is. Loans aren’t provided to teenagers either no matter how much they’ve worked before.

4.Employed in proprietary/partnership:

A proprietorship usually means that the proprietor is the business. There’s no separate existence of the business from its owner and if you’re employed in such a firm, your loan application faces an uphill task to get accepted. This generally happens because banks also check the credibility of the company’s owner in which the applicant works in. This involves risks such as sustainability, turnover etc which aren’t too reliable in most cases.

Clearly, acquiring instant personal loans from any bank isn’t bread and butter although it should be. Apart from this, there’s tons of paperwork involved which makes you dizzy by the day your loan is approved. Thank the Gods for peer-to-peer lending platforms like LenDenClub. A quicker, smarter and more innovative way of availing loans without having to get caught in the mundane of orthodox loan application procedures of traditional financial institutes. First things first, everything is online. From documentation to verification to lending and borrowing money. This has the added advantage of digital security and authenticity. Disbursement of money takes hardly 72 hours which is absolutely stunning and could never work for banks for a variety of reasons. The major problem of salary cap is kept in mind and is obviously made low enough to suit the needs of the general community. Work experience isn’t a criteria here altogether making it an option that freshers could choose too. But the CIBIL score requirements are the same which is never a problem for loyal, sincere individuals who have a day job. Employees working in proprietorship firms are not considered outcasts either which is one of the many ways peer-to-peer is different and interesting. As the world steps into uncharted territories through technology and innovation, so should you!

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