Banks would be examining a number of factors including your income, age, credit report and your job steadiness for evaluating your capacity to pay back the personal loan you have applied for. So more often than not, a single mom’s personal loan request could get declined. Rejection of all kinds is quite tough to digest, more so if this rejection is related to some money matters. You may have devoted a lot of time to get ready with the various loan requirements including documentation and you may have been waiting eagerly for your personal loan approval but your expectations were dashed and you are in a mood to know where you have gone wrong.
The banks and other traditional institutions would never reverse their decisions and despite a whole lot of pleading, you could at best know the precise reasons why your loan request was rejected. You need to identify the main reasons and rectify the issue while applying again for the personal loan in the near future. Personal loan approval depends a lot on the borrower’s financial state. The banks and other traditional financial institutions base all their major credit decisions chiefly on the financial information and evaluation based on thorough background checks.
Banks obviously, would be examining the ability of the borrower to remain financially stable and they would be relying on background checks and credit investigations for making sure that the borrower has the capacity to repay the personal loan. Here are some personal loan rejection reasons. It is quite likely that a single mom’s loan request is declined because of one or an effective combination of two or more of the following loan rejection reasons.
Inadequate Income
The bank would not care to see the amount of money you have currently in your bank account. Further, your personal loan request would be declined in case your regular income is not enough for sustaining the monthly repayments of the loan. In this context, you must know that single moms earn remarkably less as compared to the single dads, and moms would be penalized for every additional kid they have. The income of dads who are single remains either the same or gets enhanced with each addition to the family. Visit https://www.libertylending.com/ for perfect loan solutions.
Single moms are known to be earning just about two-thirds of the amount earned by single dads. Even after controlling variables such as social capital, occupation, education, and a number of hours put in at work, the income gap is hardly reduced. There are more chances of single moms living in poverty as compared to single dads. As per the 2017 U.S. Census Bureau, 80 percent of the total single-parent families were actually headed by single moms. As per https://singlemotherguide.com, in 2016, the median income was about $35,400 for single mothers while the median income was $85,300 for all married couples. Statistics reveal the wide disparity in incomes. Banks generally require borrowers to fulfill minimum monthly or annual income requirement. Examine the lender’s minimum income requirement. If you are not able to match their needs, your loan application would surely be declined.
Unstable & Unsteady Employment Record
It is not enough to fulfill the bank’s minimum income criteria to rest assured that you would get the loan. Your personal loan request would be declined if you are having an unstable job or if you are having an inconsistent source of income. Banks are looking for solid assurances that borrowers could be sustaining all their loan repayments throughout the loan term. That is primarily the reason why most lenders insist on knowing your length of service or your minimum employment tenure. All this information could be accessed by them on your certificate of employment. In order to qualify single mothers must be employed somewhere for a minimum of one year and if she is self-employed then she should be operating this business for minimum a couple of years or so.
Your Residential Address Found on the List of Defaulters
If you are sharing the house with an individual who has missed a credit card date or a loan repayment and has already been reported to CIBIL, it is likely that banks would be finding your residential address on their database of defaulters. In such a situation, your loan request could be declined.
Poor History of Loan Repayments or Credit Card Payments
If you have a bad track record or history of loan repayments or credit card payments, banks would not be too happy to see that you have been ignoring credit card debts and accumulating them for years culminating in a big pending payout that has crossed the due date or you may have missed a few EMIs that is the reason why you have been already reported to CIBIL. The bank would be having a solid reason to decline your personal loan request whether you are a single mom or a single dad. This condition is applicable universally. All your insurance premiums and telephone bills must be paid. You must be vigilant about your credit and bill repayments.
Excessive Previous Loans As Compared to Income
If you are already having a tough time juggling multiple loans, then your total income minus the current credit repayments would be regarded as your actual income. If your income is not big enough to accommodate another loan repayment, your personal loan request would be denied.
Not Qualified for the Loan
You may fail to fulfill the eligibility requirements of certain banks for personal loans. There are some lenders who follow unique criteria for loan approval or you need to fulfill unique requirements. For instance, if you are seeking a Citi Bank loan, you must necessarily have your Citi credit card at least, for six months. Alternatively, you may have a credit card from some other bank at least, for one year.
Conclusion
It is pretty depressing and heart-breaking when your personal loan request is declined. However, single moms should have the fighting spirit and must learn from their mistakes. You must focus a lot more on boosting your credit score, paying off all your debts on time and you must do whatever to make sure that you are regarded as a responsible and reliable borrower. Moreover, once you are all set to put in your personal loan request, ensure that you are fulfilling all the eligibility criteria and accordingly you must submit all your important supporting documents.