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Why was my loan rejected?

Lenders almost never tell you the real reason. They send a line about "internal policy" and leave you guessing. This decoder takes the same inputs an underwriter looks at and shows you which of them are likely working against you, ranked — so you know what to fix before you apply again. It is an educational diagnostic, not an underwriting decision, and no lender has endorsed it.

Your application

₹60,000
₹18,000

Include car, personal, home and consumer-durable EMIs, plus credit card minimum dues.

₹8,00,000
5 years

Unsecured lending leans hardest on your score and your FOIR, because there is no asset behind it.

Each formal application creates a hard enquiry on your credit report.

Possible pressure points

What to do next

Actions that actually move these numbers

Work the numbers

Tools for the specific problem

Before you apply again

Check the facts, then fix one thing

  1. Get your own credit report, free. This tool works from what you entered; the lender worked from your report. Get your free report from each bureau and check it says what you expect.
  2. If it shows a settlement or write-off, read settled vs closed before anything else — it changes what you can fix and how long it takes.
  3. If a reason points to a mistake on your report, the Credit Report Error Navigator shows who has to fix it and which official channel to use. If the reason is income against existing EMIs, the FOIR calculator shows the ratio.
  4. Decide what to fix first. Start with the one problem that matters most, then reapply for an amount the file supports.

What this tool assumes

  • FOIR is calculated as (existing EMIs + the EMI for the loan you applied for) ÷ net monthly income. Many lenders use gross income instead, which produces a lower ratio — so your lender's number may differ from ours. The ceiling it is compared against (50% for unsecured products, 55% for secured) is a reference point chosen for this tool, not a published lender rule; lenders set and do not publish their own.
  • The new EMI is estimated with a standard reducing-balance formula at an indicative rate for the loan type you picked — around 14% for a personal loan, 18% for a credit card, 9% for a home loan, 10% for a car loan. Your actual offered rate will differ.
  • Score bands follow the ranges commonly published by Indian bureaus. Lenders set their own cut-offs, and those cut-offs move with their appetite for risk in a given quarter.
  • Nothing here is a lender decision. We have no access to your credit report, your bank's policy, or the reason recorded on your application. This is a diagnostic built from the factors lenders generally weigh, applied to what you entered.
  • Rejections are often multi-factor. A profile that is fine on every measure but one can still be declined, and an application can be declined for reasons no calculator can see — an address mismatch, a document that did not verify, or a policy exclusion for your employer or pin code.
FAQ

Common questions about loan rejection

Why do banks not tell you the real reason for a loan rejection?
Lenders are generally not required to publish their internal credit policy, and most treat scorecard cut-offs as commercially sensitive. What you usually receive is a generic line about not meeting internal criteria. You are, however, entitled to your own credit report from the bureaus, and it will often show the enquiry, the obligations and the payment history the lender saw.
Does a rejected loan application lower my credit score?
The rejection itself is not recorded as a negative event. The hard enquiry created when you applied is recorded, and several enquiries in a short window can weigh on your score and can read to the next lender as though you are short of funds. The damage comes from repeated applications, not from one decline.
How long should I wait before applying again?
There is no fixed rule, but applying again immediately with the same profile usually produces the same answer plus another enquiry. Most people are better served by fixing the strongest pressure point first — clearing an EMI, lowering the amount, or letting enquiries age — and then reapplying.
Can I be rejected with a good credit score?
Yes, and it is common. A score above 750 says you repay reliably; it says nothing about whether you can afford another EMI. If your FOIR is already high, a strong score will not carry the application on its own.
What is FOIR and why does it cause rejections?
FOIR is the share of your monthly income already committed to fixed obligations. Lenders cap it because beyond a point there is no room in the household budget for a new EMI. It is also the factor most directly within your control: clearing an existing EMI lowers it immediately.
Does being self-employed make rejection more likely?
Not inherently, but the evidence bar is higher. Salaried applicants are assessed on payslips and bank credits; self-employed applicants are assessed on filed returns, and typically need two or more years of them. Without that history, many lenders cannot underwrite the file at all, regardless of actual income.
Will a co-applicant help?
Often, because the co-applicant's income is added to the capacity calculation, which lowers the combined FOIR. It helps most when the constraint is affordability. It helps less when the constraint is your own repayment history, since that stays on the file.
Is this tool a lender decision or a guarantee?
No. It is educational. It shows factors that may have contributed to a decline based on what you entered, using assumptions we publish on this page. Different lenders use different criteria, and only the lender who assessed you knows what was actually recorded.
Back to Tools Read the full FOIR guide