It is disappointing to learn that your home Loan application has got rejected. But you have a right to know why. Sometimes the reasons given by the banks for rejecting home loans are logical, and other times they may seem unfair. Remember, you don’t have to take “no” for an answer.

Loan lending is a competitive business, and some banks of India are more flexible than others. Credit unions and community banks may take more time to analyze your particular situation.

Below mentioned are the top 5 reasons why your home loan application got rejected

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1.Poor/Low CIBIL Score

One of the most significant reasons that home loan applications faces rejection. Borrowers tend to overlook this, unaware of the fact that CIBIL score plays a very important role in getting loan approvals. The score below 750 is not considered good.

A bad credit history is a result of late repayments, missed repayment schedules are another reason for loan rejection. Your poor credit score will remain unflattering if you remain perilously close to the credit limits on your cards ore have a high percentage of unsecured loans.

2.Not Income Stability

Hopping jobs is not considered good. Especially; when you are applying for significant loan like home loans. Changing too many jobs reflects poor on your home loan application. Banks consider job stability as one of the focused and primary criteria for approving a loan.

Banks insist that the borrower should have a stable job in a company for three years preferably, in order to be eligible for a home loan. If sometimes, the applicant’s company, although reputed seems unstable, the bank reserves its right to reject the loan.

3. Age Plays A Vital Role

Home loan applications often gets rejected if the borrower’s age is near to the retirement age. The banks as well as private lenders are bit hesitant to offer home loans to such borrowers.  Because; they assesses your repayment capacity to be poor or near to zero, in some years.

However; some banks may be willing to offer short-term home loans. Short term loans means small loan tenure and bigger installments which may take away the comfort of availing a home loan in the first place. Therefore; home loan borrower’s age plays a very important role in home loan rejections.

4. Having No Credit Is Also Not Good

A majority of Indians are averse to the idea of living on credit therefore; do not prefer getting credit cards or loans. If you belong to in the same category and think that you will have a high Cibil score, you are mistaken. Because; having no credit history or a single type of credit shows your inability to take up debt responsibly.
In order to have a good CIBIL score, it requires having good mix of credit history to meet the repayment criterion of the same.

5. Not Provided Required Information/ Missing Documents

The banks or private financial lenders may have found inconsistencies between the income listed on your home loan application and the information obtained from your employer. Also; incomplete documentation, and missing information gets you home loan rejections. These issues requires resolving before you can go ahead and apply for home loan.

Make sure your home loan application is accurate and complete before submitting it to the bank.

Apart from the above mentioned, there are obvious reasons like income tax filing, previous loan rejections, loan guarantor to be defaulter, address on defaulter’s list, unpaid dues, mismatched signatures, no NOC on previous loans and being a fresh home loan applier could be the reason for your home loan rejections.

Talk to the experts, before you start for applying for your home loan. The experts will guide you in the right direction and helps you get all the documentation in line.

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