Buying a home is one of the biggest financial decisions of one’s life, and a home loan comes in handy to achieve this goal by meeting the shortfall of funds. While the process of applying for a home loan has become easier, there are various reasons why a lender might reject your application:


Banks look at your age to understand your borrowing potential. If you are nearing retirement, banks reserve the right to reject your home loan application

Poor Credit Score:

this is a report card of your credit history, & current credit worthiness. If your score is low, then the lenders lack the confidence in the borrower’s ability to repay. A score of 750 plus is considered healthy for lending while anything less than 600 is considered poor.

Delays in Repayment of loan or non-payment of utility bills:

Sometimes lending companies/banks run multi-layered checks and if they find out irregularities in payment of utility bills such as electricity bills, etc., they assess the creditworthiness to be low. Delay in Credit Card payment/ EMI also reflect badly on your credit history, thus indicating low borrowing potential.

It is interesting to note, that you might have a clean record with loan repayments, however the loans that you may guarantee for your friends and family too impact your credit history. If they do not repay the loan on time, it reflects in your credit score.

Instability in employment:

Changing jobsfor better prospects, and personal reasons is common- however frequent change of jobs creates a certain sense of uncertainty about you in the lender’s mind.

Additionally, employer status also has a bearing on your home loan application acceptance or rejection.

Builders reputation:

Before you decide on the property, it is always worthy to run a background check on the builder, and check on the legality of all documents. Banks prefer properties with clear titles, good resale value, and no minor rights.

Incomplete Documentation:

A home loan is largely guaranteed based on the paperwork furnished, which could be an intense process. KYC details, bank statements, income proofs are some essentials which enable in swift approvals

These are some factors to keep in mind while applying for a home loan. In the event that your application is rejected, do not keep trying as it affects your credit worthiness, making you look credit hungry. Work on improving eligibility, before re-applying.

Learn more about your home loan eligibility here.


The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.

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