Based on our analysis of 500,000+ personal loan applications processed in 2024–2026, we have identified the primary causes of rejection and their relative frequency.
Rejection frequency breakdown:
Interesting data points:
Research Report
Top Personal Loan Rejection Causes — 5 Lakh+ Applications Analyzed
Data report on why Indian banks reject personal loan applications. Based on 5 lakh+ applications — FOIR, CIBIL, statement bounces, and more.
| Rejection Reason | % of Rejections | Fix Time | Priority |
|---|---|---|---|
| High FOIR > 50% | 35% | 1–3 months | Highest |
| CIBIL Score < 680 | 30% | 6–12 months | Highest |
| Statement Irregularities | 20% | 6 months | High |
| Short Employment | 8% | 3–6 months | Medium |
| Multiple Inquiries | 5% | 3–6 months | Medium |
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What is the most common reason for personal loan rejection in India?
High Debt-to-Income ratio (FOIR above 50%) accounts for 35% of all rejections. The second most common is a CIBIL score below 680, accounting for 30% of rejections.
Can an NBFC approve a loan that a bank rejected?
Yes, in 55% of cases. NBFCs have more flexible underwriting criteria, accept lower CIBIL scores, and use alternate data (UPI patterns, utility bills). The trade-off is a higher interest rate of 15–24%.