Did you have your application of a personal loan denied yet again, but you don’t know why? There are many reasons for loan applications to be generally denied by bank. Banks are very careful when the eligibility requirements to approve loans. They will likely deny your application if they do not meet their criteria.

This article we’ll be able to inform you,

What is the cause of your personal loan application?

Job Typ (salaried and self-employed):

Every bank will be aware of the frequency at which you have to repay the loan. They want to know that you are able to provide adequate income to cover your obligations. If you’re salaried, the banks are more likely to approve your loan since they believe it less risky. In addition, you will receive a fixed amount of income each month.

Listed Company/ Approved Employer list:

In UAE most banks will approve loans for those who work for the company which is included in their database. which makes it easy for banks to assess their financial security. The majority of large corporations are listed. They report their financial performance regularly to banks basis, or banks have visited them and checked the profile of the company in the past.

Minimum Salary Requirement :

Each banking institution has an minimum requirement for salary for personal loans The minimum salary requirements are AED 5,000 across all banks Some banks, however, have higher standards as well. For example, AED 8,000 or AED 15,000 based on their product.

So double-check your take-home earnings and only apply when it meets the minimum specifications.

Transfer of salary to the bank that you are with:

The majority of banks will accept the loan with ease when the borrower has their salaries in the same bank as they’re trying to get the loan. This is because banks considers it less risky since your earnings will be going to them and they will automatically deduct the monthly installments of the loan each month as your earnings are transferred into your account.

Debt Burden Ratio:

The ratio of debt to income has a significant impact on loan approval. Your debt burden ratio will be calculated when you add all of your monthly installments to the amount you earn. As per the UAE central bank, your EMI cannot exceed 50 percent. That is, you will not get the loan If your DBR exceeds 50percent of the income.

Credit Score:

Banks are able to access your credit history through your credit report from the AECB The credit report includes all of your present credit and debts, as well as unpaid payments that allow the calculation of DBR and DBR. Your credit score determines the likelihood of you being approved for a loan. In the event that you’re a victim of a bad credit score, it shows negative marks to your credit score. Also, a lack of track history of repaying loans can be a significant reason for banks to deny any future loans as well as Credit Card applications.

Age:

Additionally, eligibility guidelines take your age into consideration, which can be ranging from 21 years and the maximum age is 65 years old at the time of maturity. If your age falls within the acceptable range, your loan application will be rejected.