2 weeks Ago By Moneycontrol
While applying for a personal loan , one of the first hurdles you will face is KYC (Know Your Customer) verification. It is the process lenders use to confirm your identity and financial background before approving your loan. It helps prevent fraud, money laundering and financial crimes by ensuring that the person applying for a loan, opening a bank account, or making financial transactions is genuine.
Applicants may also face KYC rejection, which can delay or even prevent loan approval. Why is my personal loan KYC getting rejected? Here are some reasons for KYC rejection, common mistakes people make, and simple ways to fix or avoid them: Incorrect or incomplete documents One of the most common reasons for KYC rejection is submitting incorrect or incomplete documents. Financial institutions require specific documents for verification, and any discrepancy can lead to rejection.
Common mistakes: How to avoid: Personal details don’t match A mismatch in personal details can also lead to KYC rejection. Lenders compare details across documents, and any inconsistency raises red flags. Common mistakes: How to avoid: Issues with proof of address Address proof is a key part of KYC verification.
If your provided address does not match official records, the lender might reject your application. Common mistakes: How to avoid: Low credit score While KYC is mainly about identity verification, some lenders also check credit scores during this stage. A poor financial history can lead to rejection.
Common mistakes: How to avoid: Issues with PAN or Aadhaar linking Many lenders require PAN and Aadhaar details to be linked for KYC verification. If there’s an issue with linking, your application may get rejected. Common mistakes: How to avoid: Bank account and mobile number not linked to Aadhaar Lenders often send an OTP (One-Time Password) to verify the mobile number linked to Aadhaar.
If your Aadhaar-linked mobile number is inactive, the KYC process may fail. Common mistakes: How to avoid: Suspicious or fraudulent activities If lenders suspect fraud or identity theft, they may reject the KYC application. Red flags for lenders: How to avoid: Income or employment-related issues For personal loans, lenders verify not only identity but also income stability.
If your employment details do not match their records, KYC can be rejected. Common mistakes: How to avoid: Get Instant Loan Up To Rs.50L Conclusion Personal loan KYC rejection could be frustrating but is usually avoidable.
Ensure all documents are correct, updated and consistent for smooth approval. If rejected, identify the issue, fix it and reapply. Through Moneycontrol’s online lending platform, you can get personal loans up to ₹50 lakhs from eight lenders, with interest rates starting at 10.
5% per annum. The process is 100% digital..
