Top 5 Ways to Prevent Your Home Loan Application from Getting Rejected

24 JUNE, 2021

When you apply for a home loan, lenders consider numerous aspects before accepting it. If you do not meet the home loan eligibility criteria or have a poor credit score, your application could be rejected. Here are top 5 ways that you can follow to get approval on your loan application and avoid rejections.

Improve Your Eligibility

The first thing that lender checks while reviewing your home loan application is your eligibility. Therefore, ensure that you fulfil all home loan eligibility criteria to avoid getting your application rejected. To be eligible for home loan, you should be within the age bracket of 18-65 years. Apart from this, your income should be above the threshold limit as required by the lender. Also, you should have a credit score above 700 to be eligible for the home loan.

Determine your eligibility with the help of an eligibility calculator before you apply. Avoid taking a home loan if you do not fulfil the eligibility criteria as home loan rejections can adversely affect your credit report.

Increase the Credit Score

A low credit score does not reflect well on the home loan application as it indicates irregular or non-payments of previous EMIs or other debts. Hence, a poor credit score can lead to rejection of your home loan application. Therefore, if you have a low credit score, ensure to take steps to improve it before you apply for the home loan. One sure-shot way to improve your credit score is by paying your dues regularly and maintaining a mixed bag of credit.

Avoid Multiple Home Loan Applications

Applying for home loans with various lenders can put a bad impression on banks and other financing companies. So, ensure that you research well and apply only with a lender that has eligibility criteria closest to your situation. Once you apply, wait for the response on your home loan application without hurrying. Making too many loan requests with different lenders can reflect credit hungry behaviour and lead to a decline in the credit score. Thus, avoid applying with various lenders at the same time.

Submit Proper Documents

Submitting incomplete or inaccurate documents can be another reason of your application getting rejected. You should submit all the requisite documents in the right order with accurate information. You can check the list of documents required, on the lender’s website or contact their representative for guidance. Typically, for a home loan, you are asked to submit documents like passport size photograph, identity proof, address proof, income proof, property documents, etc. Getting your home loan application and documents checked by a bank representative while applying can help avoid any last-minute trouble.

Maintain Job Stability

Maintaining your position at an organisation for a long period and avoiding frequent job changes is a good sign for lenders. Accordingly, switching jobs over a short period of time may increase the chances of rejection of your home loan application.

With these tips, you can easily reduce the chances of being rejected for a home loan and get your home loan approved without any hassles. If you wish to purchase your dream home, check your eligibility criteria, find your EMI through the EMI calculator and apply for a home loan with Kotak Mahindra Bank, today!

Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.

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