In today’s growing world, a home is a vital part of an individual’s life, and as the world is growing and the stakes are increasing too, it is becoming difficult for an individual to buy or build a good, well-furnished house. Sometimes, it stays as a dream in the shell forever. And to overcome this

How to Ensure that your Home Loan Application does not get Rejected


In today’s growing world, a home is a vital part of an individual’s life, and as the world is growing and the stakes are increasing too, it is becoming difficult for an individual to buy or build a good, well-furnished house. Sometimes, it stays as a dream in the shell forever. And to overcome this particular difficulty, people turn to banks for loans. Apparently, banks play a crucial role in providing home loans at good interest rates. Various banks provide various housing loan interest rates from which an individual can choose a bank, which suits him best.

However, applying for a home loan isn’t that easy, because a home loan application includes a lot of factors both for the lender as well as a bank for approval of the home loan. You can check out Six Steps to check before going for a home loan here.

Discussed below are few home loan rejection reasons, which an applicant should avoid to get rejected from getting a home loan.

Maintaining a good CIBIL score Credit Information Bureau of India Ltd. (CIBIL) is a score (a good score for home loan is 700) that maintain records of a person who has previously taken a loan or used a credit card. To check for housing loan eligibility, this is a crucial deciding factor. There can be several reasons for a bad CIBIL score. Some of these are:

• Dues are not paid on me

• No payment of EMI’s

To maintain a good CIBIL score, one should ensure merely payment of dues and avoid taking unsecured loans.

Verification of personal profile

Verification of profile picture

A particular applicant who is applying for home loan, it is important to verify his personal details with the bank without any inconsistency. To be eligible each of his given identify has to match with the credit report. In case applicant changes there any detail, it has to be immediately informed to the lender.

Age limit

Age limit

The eligibility criteria for a housing loan in terms of age limit is a minimum of 22-23 years, and the maximum is around of 60 years for applicants. If an applicant is near retirement age, the bank would be hesitant to provide the loan as they will have no repayment capacity after few years.

Job Hopper

Job Hopper

If an applicant is a job hopper, that is, they keep on locating themselves to different places every month, then this can be a reason for loan rejection. As according to bank rules, an applicant must be employed with a certain organization for three years. Thus, job stability is also an important factor be eligible for a housing loan. To get more knowledge click on property document checklist

Loan application has been rejected before

Loan Application Rejected

If an applicant has received a loan rejection leer from bank previously, then he/she might not be able to fulfill the eligibilities the loan applicant requires. CIBIL keeps record of every loan applications. When the applicant applies for the loan, previous records from the database will be checked and the rejection will show up in credit profile. It is highly advisable one should not keep applying for loans without any reason.

A good tax paying history

Banks also check with a few years of tax paying history to provide loans. If any applicant has started their career recently, banks might find it difficult to provide loans to such applicants, as they will be not able to serve a long tenure loan.

Personal Loan

personal loan

Personal loan rejection reasons can be a factor, by which an applicant will not be able to get home loans. There can several reasons for rejection of personal loan such as Not paying dues on me, Bad Credit score, Insufficient income, Incorrect details and so on. Any given property should satisfy bank policy guidelines. Banks hesitate to sanction home loans to old buildings or houses. So, an established and trusted builder should be contacted who has all necessary documents pertaining to the property for sanction of loan.

Filling Income Tax Regularly

Income tax returns should be filed regularly. It is very important to have a clear record of income tax. Here are some more points on how to apply for a home loan: –

• Calculating net worth to evaluate if the applicant is ready for a loan commitment.

• Down payment should be made as much as it is possible.

• Backup funds should be ready to pay EMI for several months.

• Every bank has their own policies to provide loans. Complete details of existing investment should be ready before applying for the loan.

So, above are the few tips which can be used to stop rejection.

If home loan is rejected, the applicant needs to follow these right moves:

Have a look at the 5 questions your real estate agent needs to answer

Contacting with the lender

If an applicant’s loan application is rejected, the best thing he/she can do is to try contacting with the lender and try to find out the reason why the application got rejected.

Can decide to lower the home loan amount

Loans can be rejected, if banks do not find the required income of an applicant that he demanded. In this case, the applicant can try to reduce the loan amount having a proper conversation with the lender.

Checking and paying off existing loans

If an individual has existing loans, it is liable for the bank to reject the loan which is applied currently. In this case, the applicant can pay off their existing loans, before applying for next loan. You can check out the easy home loan assistance from Thrissur Builders here.

Checking credit report, evaluating and improving it

Credit report

If applicants CIBIL is low, for instance, given the case, that the CIBIL applicants are less than 700, which is required score to apply for a loan, then applicant might land in getting their application rejected. The applicant can always log into CIBIL’s website and check their report, and if any discrepancies found they can update it on the website. Generally, it takes about 4-5 days to get updated, after which applicant can again apply for a loan.

If any important paper is missing

While applying if any of important papers found missing, it can lead to the rejection of loan. For this, banks and financial institutions are always ready to help, since no lender wants to lose their customers.

Applying for a loan means getting ready tons of documents that need to be submitted to the bank. Normally there will be a list of general papers to be filled by the applicant, the guarantor, if present, and then there are additional documents for salaried persons, professionals/self-employed persons, etc.

So it is possible to miss one or two of these papers, which in some unfortunate cases can lead to the rejection of your loan by some financial institutions. But luckily, banks and other such institutions are always ready to help since no lender wants to lose their potential customers.

Market Value of property

market value of your property

This is also an important factor, by which an application is liable to get rejected. Moreover, it is a common fact that different lenders have different a Loan-to-value ratio.

Ideally, before availing a loan, you need to get the market value of the asset with the help of a qualified appraiser. Also, note that banks carry out an independent evaluation of the property for which you need the loan.

And in most cases, the estimated value of the property by the lender will be less than the recent market price, done as a means of reducing their risk. Therefore, the lower the difference between bank’s valuation and market value of the property, the higher the chance of getting the loan amount you applied for.

Also in the opposite case, your application is liable to get rejected, or you receive a loan that is way below the amount you expected. Moreover, it is a common fact that different lenders have different a Loan-to-value ratio.

Getting deep into problems

An application which is rejected by the lender is a generic one, once lender tells the reason for rejection, the applicant can dig into the details and do everything which will be helpful in rectifying the problems.

TBPL is one among the top builders in Thrissur, Kerala offering luxurious and premium apartments and  flats in Thrissur with top facilities. Following the  the most modern concepts of engineering, TBPL always try to fulfill the dreams of customers.


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