Banks do several in-depth checks before approving loans and below are 20 reasons why your loan request may be rejected:
1. Credit bureaus keep track of your financial history and compile credit scores, and a lower score means rejection.
2. Frequent job changes reflect your stability and commitment and are vital to banks.
3. Self-employed people find it harder to avail of loans compared to salaried people.
4. People working in certain vocations find it difficult to get home loans.
5. If you have been rejected for a previous loan, your credit score will reflect this, causing rejection.
6. If you are a tenant of a house whose landlord has defaulted, this can adversely affect your loan application.
7. There are lists of red zones maintained by banks, and loans in these areas are rejected.
8. A loan will be rejected if a property price is higher than that estimated by the bank.
9. Any questions over the title deed can result in the bank rejecting a home loan application.
10. Loans for properties by builders with dubious reputations will be rejected.
11. If you have defaulted on any loan payments, your credit score will reflect this, causing rejection.
12. No credit history means the bank cannot verify your stability, resulting in rejection.
13. Loan applications of older borrowers closer to retirement age are usually rejected by banks.
14. The age of a property is a factor in obtaining a home loan, and loans for dilapidated properties will be rejected.
15. Banking services prefer borrowers that can allocate at least 40% of their salary towards repaying their loans. Having multiple loans can result in rejection.
16. The numerous signatures on the home loan application must all match.
17. Income tax return documents are scrutinized in the loan process, and any discrepancies will result in rejection.
18. A loan is approved only upon home and office address verification by bank employees. You have to be present at the time of the visit.
19. Banks typically have a profile of borrowers that they lend to, and not meeting this will result in rejection.
20. Single borrowers of a loan may face rejection as these organizations prefer co-applicants.
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