Home loan application rejected but reasons are not known


Now a days getting bank home loan for an individual is become easy, the banks or financial institutions gives a home loan when your own eligibility (mainly financial reasons) along with your property eligibility matches with their policy. In this article we will discuss about the various possibilities why your eligibility to get a home loan is getting hampered which may lead to reject your application.

Now a days getting bank home loan for an individual is become easy, the banks or financial institutions gives a home loan when your own eligibility (mainly financial reasons) along with your property eligibility matches with their policy.

Below are the points which will be the reasons for your home loan application rejections.

Cheque getting bounced

You have given a Cheque to lenders and by some reason the Cheque got bounced. Bankers are really sensitive about the Cheque bouncing. So you must make sure that you have enough funds in your bank account from which you have given the Cheque for it to be cleared.

Your Financial Status

It is your financial status that will be a deciding factor for the lenders how much loan you will be given. Generally, it's found that a salaried person can have 50% of his net salary & a self-employed person can have 75-80% of his monthly income, paid as EMIs for any loans. So if you are already paying good amount of EMIs, more than what your finances can afford then your application may be rejected.

Become a Guarantor for loan

This is very important factor as you don't know could be the reason that you became a guarantor to someone else's loan may it be your family members, friends or relatives. For the lenders, it is as like you have taken the loan.

Property Age

If you are planning for the home loan for a property which is older and as per their belief it will not stand for further 20-25 years then your application will be rejected. Feels strange but this is true, lenders do not believe in old age property finance.

Own contribution Amount

Mostly lenders gives 80% of the property value and then requires minimum 20% - 25% of total value of property to be given by your own contribution. If the own contribution amount is lesser than this then lenders will feel jittery.

Co-owners application

If you think that to raise the eligibility for maximum fund you add many co-owners to your loan application then lenders do not like such applications and they would rejects it. Lenders will also check who are the co-owners, e.g. applications Co-owned with unmarried daughter, cousins, colleagues - lender is likely to reject the application.

Change in the career

If you are planning for getting home loan and at the same time you are planning to change the career then you should not apply for loan right away, rather wait for at least 6 -8 months because bankers do not like applicants who are frequent job changers or who have stable job and looking for starting own business which is a risk taking game.

Education Qualification & Work Experience

Your education and current work experience also matters on how fast your loan is approved. We do not know but lenders have written this somewhere in their policy about the educational background eligibility. Example would be an under graduate will be less likely to get loan approved then a graduate or post graduate applicant as he will have more stability her job.

The company for which you are working

Many lenders also have list of employers for whom they are not giving loans as those companies are either not having good financial background or may be some bad results in the past.

So above are some of the points that should be kept in mind if you are applying for the loan from any bank or the financial institution.


Comments

Author: Kailash Kumar14 Sep 2016 Member Level: Platinum   Points : 4

From the layman's point of view also, it is not Greek to understand the underlying principles of granting a loan to an applicant. Just consider as to how we react when somebody asks us for a personal loan. Our primary concern is that as to how and when the individual will return our money. In case, it a meager amount which can be forgotten even if not returned, then people take a risk and extend the loan. However, in case the amount is substantial then generally we refuse on one pretext or the other.
The same principle applies in the case of bank loans also. The banks do repeated scrutiny to ensure that the applicant will be able to return the loan amount and in this regard the most important factor is their repaying capacity calculated on the basis of their regular income and expenditure. Generally, Government servants are considered a safer option as there is more job security involved. Same is the case with the persons employed in reputed private companies.

Author: Swati Sarnobat26 Feb 2017 Member Level: Gold   Points : 1

Job guarantee is also another factor, because the company may doubt if the company where you are working can provide long-term employment.

Author: Partha Kansabanik13 Dec 2017 Member Level: Diamond   Points : 8

A very useful article from the author. Most of the applicants apply for home loan at the last stage and do not fill the application form properly. they don't submit requisite documents. Even I have noticed that copies of PAN card or AADHAR card are not submitted. Naturally such applications get cancelled.

In addition, some applicants resort to changing the salary by various illegal means to get loans. Before sanctioning loans, the banks verify the documents minutely. If such malpractices come to their notice, they cancel such applications.

The author has mentioned to important reasons for which the loan applications get cancelled. One of these reasons are the age of the property which the applicant intends to buy. If the property (intended tobe purchased by the applicant) is more than twenty years old, such application gets cancelled.

However, the most important aspect is being gurantor. Generally we become gurantor for our friends, relatives or colleagues without any hesitation. If in any case, the person for which we stood gurantor fails to pay the loan, our credit record becomes tarnished and this may cause our own loan application getting rejected.

In this connection, I would advise the applicants to check our own credit score from Cibil before applying for home loan. This would give the applicant a preliminary idea whether his/her application for home loan will be accepted or rejected by the bank.

Concluding my response, I thank the author for this very useful article.



  • Do not include your name, "with regards" etc in the comment. Write detailed comment, relevant to the topic.
  • No HTML formatting and links to other web sites are allowed.
  • This is a strictly moderated site. Absolutely no spam allowed.
  • Name:
    Email: