Probable Reasons for Your Home Loan Application Getting Rejected

Updated on December 14, 20183 mins read
Home Loan Application

Many a times we hear stories from applicants how their home loan application got rejected even when they had all the documents to support their application. We looked into the various cases and found that while all applications are different, here are few things that are the most common causes of application rejection:

  1. If the name on the home loan application is not the same as that on PAN Card or property agreement, the application gets rejected. For example if the name on the Property Agreement or PAN Card is Vijay Kumar Agarwal and on the loan application it states Vijay Agarwal, then the application is rejected.
  2. While filling out forms, it often happens that you miss signing out on one or two places. This makes the application incomplete and thus leads to rejection.
  3. Many banks have specified formats, ways to fill up the form. As silly as it may sound, but few of them have also specified the ink color with which you need to fill in the application. You dont follow their rules, your application gets rejected.
  4. When you apply for loan, the banks look at your income. If they see you are not eligible for loan basis your income level, they reject your application. Thus it is always recommended to do an eligibility check before you apply. You can check your eligibility here
  5. If you have missed any EMIs on your previous loans, your application gets dicey. The banks then check for a pattern whether it was a one off thing or is there a pattern. They also check for what could be the probable reason for missing out.
  6. The banks also check your credit history and see how if there are any uncleared dues. Any missed out payments raise a concern and banks then dig into it more trying to find out the probable reasons for the same. They also check if this is a regular thing or just a case of delayed payment once.  
  7. Another major reason for your home loan application being rejected could be inconsistency in filing ITR. If you haven’t been regular with the returns, the bank rejects your application.
  8. If you are applying for home loan for a property whose documents are not registered, the application will be rejected.  
  9. While going through your property documents if the bank finds missing chain agreements, the loan is not considered
  10. If the Occupation Certificate is missing from your application documents, the application is bound to get rejected
  11. Old buildings go into redevelopment. Banks check the age of the building before approving your application. If the building is too old, your application will not be accepted
  12. Suppose you apply for a home loan when you are nearing retirement, chances are bleak for your home loan being approved
  13. Times when the bank finds that the property co-owner and the co-applicant are different individuals, the bank rejects your application

Has your home loan application been rejected for other reasons than listed here? DO share with us and we shall add to the list. In case you are looking for home loan or wish to transfer the balance home loan to a better deal, do connect with our Advisors. They would be happy to help.  

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