Availing a CA loan helps you to meet several costs like starting your new CA firm, work space renovation, office relocation, employee costs, etc.
Approval of your loan application will depend on various factors such as meeting the CA loan eligibility criteria, documentation process, etc. even though availing these are comparatively easy.
Given below are some of the reasons behind your loan rejection:
High debt to income ratio
If you have an outstanding debt comparatively higher than your monthly income securing your loan application can get difficult. Maintaining a debt-to-income ratio below 50% is ideal when applying for credit.
Low CIBIL score
Your CIBIL score plays an essential part when you apply for advances. A CIBIL score of 750 or above is necessary to successfully apply for a loan for chartered accountants. You can improve your CIBIL score by clearing all your outstanding dues. Alternatively, if you hold a credit card, maintain a credit utilisation ratio below 30% of the credit card limit to improve your CIBIL score.
There are certain eligibility criteria and documents needed to apply for a CA loan to prove your credibility to manage a credit. Such documents include income proof, address proof, KYC documents, etc.
Do make sure to inquire about your lender’s documentation process and apply once you hold all the required documents.
Your lender may also reject your professional loan application if you do not have a stable source of income and a sound employment history. Besides, if you have too many unapproved loan applications from the past, the chances of securing a loan can be challenging.