1. Ask for the specific reason
Ask the lender whether the decision related to income, existing obligations, credit history, documents, property criteria or internal policy. RBI’s Fair Practices Code for lenders asks banks and financial institutions to convey the main reason(s) for rejecting a loan application in writing, for all categories of loans. Some criteria may not be fully disclosed, but a clearer reason helps you decide what to do next.
2. Review your credit report
Check for overdue accounts, incorrect balances, accounts you do not recognise, duplicate records or loans shown as open after closure. Under RBI directions, you can get one free full credit report, including your credit score, from each credit information company once every calendar year. Follow the relevant credit bureau’s official dispute process and retain the reference number.
3. Check affordability
Compare existing monthly EMIs with reliable income. If repayments would stretch your budget, consider whether a lower amount or a different timeline is more sensible. Do not borrow more simply to pay existing debt without comparing the full costs and risks.
4. Correct application mismatches
Ensure that the name, address, employment or business details and income figures in the application match the supporting documents. Do not alter or misrepresent information to fit a lender’s criteria.
5. Compare criteria before applying again
Check the official lender’s published rules, fees and documents. Avoid unnecessary applications in a short period, because hard enquiries may affect some credit assessments.