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    Reasons for Home Loan Rejection

    Taking a home loan is one of the most crucial steps in building or buying a new home. Applying for a home loan involves a lot of research, decision making and keeping required documents ready. Being prepared not just saves time but also efforts. There are times when you are unaware of the many formalities and paper work involved during home loan application. Apart from being loan ready, it is also important to know the reasons for rejection of your home loan application.

    Some of the top reasons for which your home loan can be rejected by a lender or a bank are given below.

    Unpaid Dues:

    When a borrower takes a home loan, one of the foremost things that are involved in the approval for the same are credit history and record. The credit history check basically involves determining timely payment of dues and EMIs of other loans, etc. The best way to clear this condition is to be punctual with payments and never miss deadlines on EMIs and credit card dues. You can always keep a check on your credit record by being aware of your bills and repayment dues.

    Other Debts:

    If there is more than one debt in your name, your real income is calculated by subtracting the credit repayments from your income. If according to the lender’s analysis, your repayment capacity seems inadequate, the bank or lender may refuse to offer you a home loan.

    Address on Defaulter List:

    In some cases, if you have moved to an address which previously was rented by someone who hasn’t paid huge credit card bills or paid for a loan. And if the previous tenant or owner has given the same address in the bank records, the address could be listed in the database of defaulters. This decreases the possibility of your home loan being approved.

    Job Stability:

    Changing too many jobs also reflects poorly on the home loan application. Banks consider job stability as one of the main criteria for approving a loan for buying a home. Banks insist that the borrower should be employed in a particular firm or 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.

    Age while Application:

    Home loan applications are rejected if the borrower’s age is close to the retirement age. The lender is hesitant to offer loans to such borrowers as it assesses your repayment capacity to be poor or zero, after a few years. However, some banks may be willing to offer short-term home loans. Short term loans for big amounts would lead to a really high EMI, taking away the comfort of availing a home loan in the first place. Therefore, borrower’s age plays a very important role in terms of home loan rejections.

    Loan Guarantor to a Defaulter:

    Being a loan guarantor to someone can sometimes be risky. Unless you are sure of the borrower’s repayment capacity, do not agree to be a loan guarantor. Without having any strong reasons for believing in that person, do not sign to be a guarantor. If the borrower defaults in his repayment, you will be held responsible to repay the loan on his or her behalf.

    Credit Score:

    Keeping your credit score high plays a significant role in getting your home loan approved. You should ensure you have a good credit score when you apply for a loan. Your credit score is recorded by CIBIL (Credit Reports and Risk Management Solutions).

    Previously Rejected Loan Applications:

    CIBIL records incidents such as rejection of loan applications. Such an incident, becomes a part of your credit record. Therefore, it is best to know the result from one bank before applying to another bank. By ensuring this, you will be able to correct your mistakes and not repeat the same errors while applying for the second time.

    Income Tax Return Filing:

    It is important to file your income tax every financial year, whether or not you receive your Form – 16 from your employer. Lenders and banks check for a clear track record of filing income tax returns of the last two years, before approving a home loan.

    Suitable Property as Security:

    Lenders do not accept all types of residential properties as securities for home loans. Properties that have a good resale value, stable price, are in demand and are easy to sell, are preferred by lenders. Ensure that while choosing your property, do not go for something too old. It is also advisable that the property is constructed by a reputed and trusted builder. Also, all the required documents must be easily available. These are the few points related to the property in question, that must be kept in mind in order to avoid your home loan from being rejected.

    Any issue with the layout or title of the property could also result in rejection of your home loan application.

    Apart from these basic reasons, there are some unexpected reasons for the rejection of your home loan application:

    Mismatched Signature:

    Signing your documents using the same signature as in the attached documents, is very important while applying for a home loan. The signatures on the home loan application form should not only match the document copies, it should also match the documents of the registered bank.

    Non-availability on Landline:

    When you fill in your landline number in the home loan application form, the bank authorities will call you on the same for verification purposes. In case, the bank calls you when you are away at work or busy elsewhere, the bank simply considers it to be a case of ‘no response’. Therefore, it is very important you also provide your mobile number in the application form.

    Property with Minor Rights:

    If the property you are taking a loan for, has minor rights, then you may be in for some rejection. If the seller has not disclosed the information about a minor having a rights on the property, your home loan application has a high probability of getting rejected.

    Being a Fresher:

    Lender or banks prefer applicants with a stable job where they have worked for at least a year in the same company. As the bank determines the borrower’s stability as well as repayment capacity by assessing the number of years of employment. So, freshers are not a preferred option when it comes to approving home loans by banks. Also, applicants who have made frequent job changes could also have their applications rejected for the same reasons.

    Being an Entrepreneur:

    For entrepreneurs with established reputation and stability, home loan approvals are easier to come. However, for those who have just started out, with a low capital and no secure future, home loan applications may not get approved so easily. In these cases, you must ensure the bank of your growth and stability as a business by providing some testimony that can help you bag the loan.

    Not Paying Telephone Bills:

    Sometimes even unpaid telephone bills can lead to the rejection of your home loan application. Banks and lenders do not look highly upon late payments or unpaid bills. This only serves as another reason for rejecting your application.

    No NOC on a Previous Loan:

    It is imperative that you get a NOC (No Objection Certificate) on any previously closed loan. Banks or lenders reject your home loan application, if you do not provide with an NOC of your old loan that has been closed.

    The list is vast and it is no joke to get your home loan sanctioned. Therefore, you must be very sure that your records are clear. Sometimes providing additional security towards your home loan application such as fixed deposits, collateral securities, a guarantor or insurance policies can help you secure the home loan you are looking for.

    Reasons for Home Loan Rejection Reviews

    • HDFC Limited Home Loan
      "Fraud HDFC - Please go at Your Risk"
      0.5 0.5/5 "Unacceptable"
      Marathon Innova, Lower Parel, Mumbai - 400013 I found property which is already approved with HDFC Bank. I asked Home Loan executive can I do Registration with this Property? They told me to go ahead with registration and stamp duty process. My file handle Mr. Prasad Parasnis. He is rude Person. He taken full one month period for home loan process & very cheap & disgusting treatment. Prasad suddenly told me your home loan is rejected. Mr. Prasad don't you have clear idea about which document required for funding any property? How can HDFC appoint such an uneducated person on a position to play with customer's financial condition...?
      Was this review helpful? 0
      , mumbai
      Reviewed on Jan 22, 2018
    • HDFC Limited Home Loan
      "EXPECTED MORE"
      0.5 3.5/5 "Pretty good"
      Actually the proprty i was looking for was in a remote area so they the HDFC LTD rejected the my loan application . The Customer service was not that good but was ok ok i can say .the bank people gave me all the required information for the loan process . It was a good experience i can say with the HDFC LTD .
      Was this review helpful? 6
      , delhi
      Reviewed on Dec 22, 2017
    • SBI Home Loan
      "Home loan process is very slow and not co-operative"
      0.5 1.0/5 "Really Bad"
      Dear All, SBI home loan process is very slow, SBI staff is not co-operative, I have submitted all the required documents for loan process n told me that your home will be passed in one month , they have taken 2month for entire process , suddenly they told me that your home loan application is rejected due development agreement is not registered which is taken 2month. My building has society formed and OC, many people got loan from SBI for my same building now they are saying that your development agreement is not registered which is wrong said in last stage. Kindly all, do not apply home loan in SBI , because they don't asses good customer , I got very negative publicity while applied home loan in SBI but I was pretty comfort with SBI but it is sure that I was wrong to apply loan in SBI. SBI's time mgmt, decision making and transparency is very poor.
      Was this review helpful? 5
      , mumbai
      Reviewed on Dec 03, 2017
    • HDFC Limited Home Loan
      "Average"
      0.5 2.5/5 "Just OK"
      I have applied for my home loan with HDFC LTD. My application was rejected since the property is in village. The rate of interest was 8-9% which was average in the market. The customer service and responses was really good so I would like to recommend to others.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Nov 01, 2017
    • HDFC Limited Home Loan
      "Not satisfied"
      0.5 1.0/5 "Really Bad"
      I have approached HDFC LTD for my home loan they have rejected my application since the structure of the building is not good as per the guideline of HDFC so now I have approached PNB . I am not satisfied with the customer service and responsiveness . The rart of interest was 8.4% for 20 lakhs which is average in the market.
      Was this review helpful? 0
      , mumbai
      Reviewed on Oct 31, 2017
    • Axis Bank Home Loan
      "Average"
      0.5 3.0/5 "Satisfactory"
      I have applied for my home loan with AXIS bank. The rate of interest was 12-13% which was bit high comparing to others for 8 lakhs. The credit score was low so they have rejected my application. The customer service and responses was really good .
      Was this review helpful? 0
      , hyderabad
      Reviewed on Oct 11, 2017
    • HDFC Limited Home Loan
      "Good"
      0.5 4.0/5 "Great!"
      I have applied for my home loan with HDFC LTD . Their customer service and responses was up to the mark and I would like to rate 4 out of 5 overall. The rate of interest was between 14-15% which was high so I have rejected my application. I would like to rate 4 out of 5 overall.
      Was this review helpful? 0
      , guwahati
      Reviewed on Oct 11, 2017
    • ICICI Bank Home Loan
      "Need little more consideration"
      0.5 1.0/5 "Really Bad"
      I have been literally disappointed with the failure of ICICI to extends its limitation to the current customers. I was rejected for the Home loan, as the project was not approved. I like this banks other products but the loan part of it needs to be little more open.
      Was this review helpful? 0
      , lucknow
      Reviewed on Oct 11, 2017
    • Axis Bank Home Loan
      "Good"
      0.5 5.0/5 "Blown Away!"
      I have applied for my home loan with AXIS Bank. My application was rejected because they have tried reaching me but I was not in town so I could not able to respond them. I have no idea about the rate of interest also but the customer service was good.
      Was this review helpful? 0
      , bangalore
      Reviewed on Oct 10, 2017
    • ICICI Bank Home Loan
      "Not bad"
      0.5 2.0/5 "Expected more"
      I have applied for my home loan with ICICI bank . They have rejected my application since my company was not listed and Its a firm . I have no idea about the rate of interest and charges here. The customer service and responses was not bad. My overall experience was average.
      Was this review helpful? 0
      , pune
      Reviewed on Oct 10, 2017
    • HDFC Limited Home Loan
      "Good Service"
      0.5 5.0/5 "Blown Away!"
      I have applied for my home loan with HDFC LTD. The rate of interest rate was 10.75% which was very high comparing to other banks in the market. They have rejected my application since It's a sub branch and they could not transfer my loan account.the customer service and responses was up to the mark so I would like to recommend to others also.,
      Was this review helpful? 0
      , nasik
      Reviewed on Oct 09, 2017
    • Punjab National Bank Home Loan
      "Very Good"
      0.5 4.5/5 "Excellent!"
      I have applied for my home loan with PNB . I was looking for 1 crore but the maximum they could offer is 35 lakhs so they have rejected my application. The rate of interest was between 8.5% which was satisfactory . The customer service and responses was also good. My overall experience was very good and I would like to rate 4.5 out of 5 overall.
      Was this review helpful? 0
      , mumbai
      Reviewed on Oct 09, 2017
    • Dena Bank Home Loan
      "good service"
      0.5 3.0/5 "Satisfactory"
      I have approached DENA bank for my home loan . The rate of interest was 8.35% which is very good so I would like to recommend to others. They have rejected my application since I had an issue with my property. My overall experience was good and The customer service was also good.
      Was this review helpful? 0
      , new delhi
      Reviewed on Oct 07, 2017
    • HDFC Limited Home Loan
      "Not bad"
      0.5 3.0/5 "Satisfactory"
      I have applied for home loan with HDFC LTD. The rate of interest was 8.4% which was high comparing to other banks. They have rejected my application because my documents was pending. The customer service and responses was really good and I would like to recommend others.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Oct 07, 2017
    • ICICI Bank Home Loan
      "Good"
      0.5 4.0/5 "Great!"
      I have applied for home loan with ICICI bank. The rate of interest was 8% which was average but according to their eligibility criteria I am not eligible so they have rejected the application. My overall experience was average and I would like to recommend others
      Was this review helpful? 0
      , hyderabad
      Reviewed on Oct 06, 2017
    • ICICI Bank Home Loan
      "Average Service"
      0.5 3.0/5 "Satisfactory"
      I have applied for a home loan with ICICI bank, the response was too good. The customer service is doing a good work. TO process the home loan, they needs some documents to be submitted since I don't have those things. My loan got rejected with ICICI. The rate of interest is higher than HDFC LTD.
      Was this review helpful? 0
      , bhopal
      Reviewed on Oct 06, 2017
    • ICICI Bank Home Loan
      "Good"
      0.5 4.0/5 "Great!"
      I have approached ICICI bank for my home loan . The customer service and responses was really good but they have rejected my application since I didn't pay my IT properly. The rate of interest was average for 15 lakhs loan. My overall experience was good.
      Was this review helpful? 0
      , chennai
      Reviewed on Oct 06, 2017
    • ICICI Bank Home Loan
      "Average"
      0.5 3.0/5 "Satisfactory"
      When I applied for a Home Loan with ICICI bank, there were no response. I got a call from the executive after a 2 months, the service is damn slow. They informed me what are the documents needs to be submitted since I don't have those things. My loan has been rejected. I didn't get a chance to discuss about the rate of interest and the tenure period.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Oct 05, 2017
    • ICICI Bank Home Loan
      "Not a good service"
      0.5 2.0/5 "Expected more"
      I have applied for home loan from ICICI bank through online channel after submitting the application, I did not get the call from the Customer service for the loan application. After 2 days from submitting the loan application, i received a message stating the loan application has been rejected but there was no reason why the loan application for rejected. I was satisfied with rate of interest of 8.5% per annum which is very less when compared to other banks.
      Was this review helpful? 0
      , kolkata
      Reviewed on Oct 05, 2017
    • Indiabulls Home Loan
      "Good"
      0.5 2.5/5 "Just OK"
      I have approached INDIABULLS for my home loan. The rate of interest was between 9-10% which was high comparing to other banks. I was looking for 31 lakhs . They have rejected my application because of my current home loan with ICICI bank and the subsidiary was not given. My overall experience was good.
      Was this review helpful? 0
      , ahmedabad
      Reviewed on Oct 05, 2017
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