Why Home Loan Applications Get Rejected? The Common Reasons - Loan Trivia

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Monday, 26 November 2018

Why Home Loan Applications Get Rejected? The Common Reasons

“Many people try but not all succeed.” The quote is very much applicable on home loan borrowers; a lot many people apply but only a few of them get approved for the loan in reality. However, what makes the difference is, who works on the mistakes and gets approved the next time and who fails even in the second attempt. As a smart borrower, always analyze your mistake, work on them and then re-apply for the house loan while ensuring maximum chances of approval.

To give you a gist, below are some common reasons why most home loan applications end up in the dustbin. 

1 - Career and Income Instability:
First and the most common reason is the lack of a stable career and a stable source of income. If you, as an applicant, have been switching jobs very frequently, you’re likely to be lacking the stability in your career and hence, an unstable source of income. This is a major turnoff for the lender and they will, in most cases, reject the loan application.  

2 - Lack of Essential Documents: The documentation process is highly undermined by many. However, it has a very crucial part to play in the loan processing and approval process. One missing document can make or break your loan application.

3 - Insufficient Income to Meet the Minimum Income Condition: One of the most common reason of rejection in case of home loan is ‘insufficient income’. If your monthly income is not sufficient to qualify the minimum income criteria, you’re likely to lack the repayment capacity required. Hence, your loan application will be rejected.

4 - CIBIL Score & Credit History of the Borrower: Last but not least, a poor CIBIL score or an improper credit history can result into rejection.

Read Also:

Some Common Reasons for Home Loan Rejection – Must Read

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