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5 Reasons Why Banks Reject Your Home Loan Application

Mr. C.S. Sudheer | Updated On Saturday, July 21,2018, 03:23 PM

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5 Reasons Why Banks Reject Your Home Loan Application





Tired of living in a rented house? You have a great chance of buying your dream home. Yes, demonetization or the scrapping of high-value rupee notes, has given you a great chance to buy your dream home. The main aim of demonetization was to destroy black money and corruption in the economy. A lot of black money was hidden in real estate. Black money could easily be hidden in real estate, pushing up prices of houses and apartments in major cities, making them unaffordable for you and the common man.

Now, as the Government chases black money, it is becoming very difficult to hide it in real estate. This has led to a fall in property prices giving you a great chance to buy your dream home.

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Why banks reject your home loan application?


You don’t have a stable job


If you don’t have a good stable job, your home loan application could get rejected. Many banks insist that you work for the same company for at least 3 years or more, to be eligible for the home loan. Your ability to repay the home loan depends on your job and the salary you earn. Banks take job stability very seriously. Don’t have a stable job….Forget about the home loan.


You have a poor credit score


Not checked your credit score and applied for a home loan? You could be in for a nasty shock. Your credit history plays a very important role in getting your home loan application, approved by the bank. Your credit history tells the bank how regular you have been while repaying loan EMI’s and credit card dues in the past.

If you have delayed repayments on past loans several times, your credit score comes down.  A bad credit score means your home loan application will definitely be rejected. Credit score/Cibil score ranges from 300 to 900. You need a Cibil score of at least 700, to make sure your home loan application is not rejected.


You have not regularly filed Income Tax Returns


You have a good credit score and a stable job? Your home loan application could still be rejected if you have not been regular in filing income tax returns. You need to file your income tax returns for at least 2 years, before applying to banks for the home loan.


You have a very risky job


Work in a job considered hazardous and life-threatening? Your home loan application could get rejected. If you work as a journalist covering a war /riot or work in a chemical plant/industrial plant handling boilers and dangerous chemicals, it would be very difficult to get your home loan application approved.


Age does not meet bank eligibility criteria


Banks can deny you the home loan, if your age does not fall within the bank’s eligibility range/criteria. If you are close to retirement or you could retire within the loan tenure, banks could reject your home loan application. Banks are not confident that you could make the repayment and will most probably reject your home loan application.

Property prices are falling and banks have cut home loan interest rates. Now it’s your turn to understand the common reasons why banks could reject your home loan application. Be Wise, Get Rich.


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Article Author

Mr. C.S. Sudheer

Mr. C S Sudheer is the founder and CEO of – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of He aims to build a nation that is financially literate with investment savvy citizens.

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