Applying for a loan is an easy ‘to do’. But, how many times does that application actually gets approved? Not always. There are various hurdles hampering amidst the application of loans and the actual disbursement.
Highlighted below are the top 5 common hurdles of individuals when applying for loans:
- Documentation: There are a list of documents which your bank will want you to produce before them. Many a times, there will be some document or the other which will create nuisance. The list is quite long, so either you don’t have all your documents ready or your existing ones turn out ill-suited.
- Weak credit score: Having a credit score of below 700 is really bad for you. Not under any circumstances will you be given a loan with such poor scores. This is one challenge which maximum portion of the borrowers face.
- Bad credit history: This really ruins your loan approvals. If ever you made late payments or defaulted a loan, it gets recorded in your credit history. And such a history is what we call as the “bad credit history”. This tells any lender about your repayment power and responsibilities.
- Weak Business Plans: If you take a loan and don’t have a strong business plan, there is a chance you will not get any loan. Failing to convince the banks with the business idea is one of the most prominent challenges faced by almost everyone who visits the bank for loans.
- Securities: Often, banks come up with issues related to securities you keep with the bank for secured loans. The security you offer, may not always be what the banks allow or approve of. Do all your questions and answers with the bank about what you can keep as security with the bank keeping in mind the amount of loan in order to avoid any inconveniences.