Why Your Home Loan Application May Be Rejected

Home Loan Rejection Reasons :

                 Home loan is by far an important principles in getting the home of your dreams. While the paperwork involved may seem simple enough, there are many factors involved in the processing of a home loan are terms and conditions. Number of attention to smaller details may result in your home loan being rejected.

               Lenders consider many factors before granting any loan. The principles to determine the eligibility and quantum of a loan differs from one lender to another. Improving your credit score, ensuring timely payment of credit card dues, closing all earlier loans and increasing one’s income levels are more common. However, there are certain other indirect reasons which could be causal for the rejection of the loan. Here are few reasons for loan rejection which normally people may not be aware about

Bad Credit Score:

General increase in awareness, you now know that a bad credit score may result in your loan application being rejected. Before you apply for a home loan, it is best to know what a good score. Besides your score, a bank will also look into:

• Past loan repayment track record
• Number of loan enquires
• Number of non-EMI based loans (credit card, gold loans, overdraft)
• Whether applicant is guarantor for any loan and the loan Repayment track record of that particular loan

If your research shows you that you have a bad credit score, then here are some ways in which you may improve it:

• Reduce the number of loan enquires you make
• Reduce the number of unsecured loans you have (Personal loans, Credit Cards)
• Bring down the outstanding on your credit cards
• Repay by your due date time frame (avoid EMI bounce and pay at least the minimum on your credit card before the due date)
• Avoid being a guarantor for your relatives or friend’s loans. Any loan miscount on their part may result in rejection of your loan application

Your Loan Application:

Before filling in your loan application form, you will need to do your due careful. Here are a few reasons why it may be rejected. These reasons may be attributed to you not doing your homework well:

• You are not eligible for the loan amount you are seeking based on multiple factors such as income, age etc.
• Property cannot be funded as per policy 
• You may have loans you have not declared
• Your employment status may be considered unstable
• You have multiple loan enquiries indicating uncertainty
• Loans availed after present Home Loan is sanctioned
• Credit Card/ Loans: written off or settled.
• Processing fees cheque bounce