Was your application for a personal loan rejected once again but you don’t have any idea Why? There is a number of reasons for loan applications are usually rejected by banks. Banks are extremely cautious about checking your eligibility criteria for loan approval. They are likely to reject the application when you do not reach their requirements.

In this article, we will let you know,

What could be the reason to reject your personal loan application

Loan rejection

Employment Type  (salaried or self-employed):

Every bank is likely to know how often you pay back the loan. They need an assurance that you have stable and adequate income to repay your debts. If in this case you are salaried employ the banks more likely to approve your loan as they find it less risky, you get a fixed income every month.

Listed Company/ Approved Employer list:

In UAE, Most of the banks approve a loan for those who are employees in a company that is listed in their own database, This usually makes the job easy for banks to check your financial stability. In general, large companies are listed, where they submit their financial results to the banks on regular basis or banks has visited them and verified the company profile in past.

Minimum Salary Requirement :

every bank has a minimum salary requirement for their personal loan products, Lowest minimum salary criteria are AED 5,000 across the board, But many banks have higher requirements also. i,e, AED 8,000 or AED 15,000 according their product.

Hence double check your net take-home salary and apply only if it matches the minimum requirements.

Salary transfer to the same bank:

Most of the banks will approve the loan easily if the applicant has their salary accounts on the same bank where they are applying for the loan. This is because the bank will find it less risky as your income is going to them from which they can automatically deduct the monthly loan instalments when your salary is credited into your account. 

Debt Burden Ratio:

The debt burden ratio will have a major impact on your loan approval. My debt burden ratio is calculated by adding all your monthly repayments to the monthly income you earn. According to the UAE central bank, the EMI should not cross 50%. In other words, you will not be given the loan if your DBR comes more than 50% of your salary.

Credit score: 

Banks can access your credit history by acquiring your credit report from AECB, the credit report includes all your current credits, debts, missed payments which allow them to calculate DBR as well. The credit score will determine your chances of getting a loan. If you have a poor credit score it reflects negative remarks on your credit report. And a poor track record of repayments is a strong reason for banks to reject future loan or Credit Card applications.


The eligibility criteria also take age into account where it ranges from 21 years, and the maximum is 65 years at maturity. If your age is not in the range, then your loan application would get rejected.