Why Was My Loan Rejected? Understanding Bank Criteria for Company Listings

Hi all, I am working in a private firm with an employee strength of 60. I had applied for a personal loan based on my salary at one of the banks where we do not hold a salary account. Due to the higher interest rates, I didn't apply for a loan at a bank where I have a salary account. Although I met all the criteria, the loan was rejected, stating that our company is not on their list.

Understanding the Bank's List

Could someone tell me what this list is? What criteria does a company need to meet to get registered on the list they mentioned?

Thanks in anticipation.

Regards,
Shilpa Gowda

It depends on the bank, and the bank personnel could have clarified these queries quite well for you. Do get back to them and ask.

Regards,
MK

Every bank has a pre-approved list (within categories) under RMS (risk management services), often visible on their portals. However, this is not the sole criterion for approving or declining your application. While it is an important parameter to support your loan application, especially in unsecured loans (such as personal loans), there are other factors to consider. These include your credit history (in the form of Dedup and CIBIL), your terms of employment, designation, company, repayment capacity as per their EMI Index calculator after deducting ongoing payments, physical verification report, societal status (FI), family history (any criminal, legal/lawyer, or police background can make banks hesitant to disburse loans), and the reason for needing the money/personal interview with the credit manager.

Even if everything is correct, if the bank declines, it may simply be due to meeting their credit spending targets for the month. In such cases, trying another bank that is in need of business could be an option.

Above all, customers have the right to ask for the reason for the loan application decline. If the reason is not provided, an appeal or case can be filed with the banking lokpal.

Kind regards