Why Your Loan Was Rejected?

 

Why Did Your Loan Was Rejected & What You Can Do About It?

 

It is common thing that your loan was rejected nowadays as Bank become more strict now on the documentation for loan approval.

Whether it’s a home, personal or car loan, getting rejected after all the hard work that goes into applying.  That being said, let’s not dwell on this unfortunate outcome as you can use it as a learning moment to improve your financial state. Take a look at these reasons as to why your loan application was rejected.

 

Bank Requirement

Every Bank have their requirement for any bank loan application.  Bank would require borrowers with the ability to produce income to show the borrower is capable of repaying the loan.  It would be automatic refusal if you failed to prove that you are under employment or producing enough income during the loan application process.  If your don’t have a steady job is one of the reasons for loan rejection.  To banks, job stability means that you are able to pay your dues without fail.

Salary Requirement

Even you proven that you are employed, but due to any changes of your income is a key factor that affecting your loan application.  Although your credit rating does not indicate your current level of income but bank will require you to disclose the information for further assessment.  If your income cannot meet the bank requirement, your application may be rejected.

 

Too Many Bank Loans/Commitments

Every Banks have different DSR (Debt Service Ratio) cut-off-rates and you have to make sure that your DSR doesn’t not exceeded within the Bank guideline -vs- your net salary as a general rule.  Anything higher than that, your chance of getting loan is very high. 

Banks are unlikely to give you a loan when they find out that you have too many financial commitments to be paid monthly such as other housing loans, credit cards, car loans, study loans and personal loans. They are able to track your monthly commitments via your CCRIS report which then affects your debt service ratio (DSR).

 

Credit Rating (CTOS & CCRIS)

Do not have a good credit score.  The bank will have access to your all track record includes any late or overdue transactions and whether you made minimum or maximum payments and/or indicates the remaining monthly balance.  The bank will assess your credit risk and understood whether your are a eligible borrower from here.

 

Wrong Bank Loan Application Submitted 

When comes to details of Bank requirements, different banks have different approval criteria, pursuant to general guideline set by Bank Negara Malaysia. It could be that you are not meeting the minimum age requirement, not in the right income category or the Bank does not offer to finance on such property/at that particular location. 

It is advisable to check with the Bank representative when applying for a loan so that you can choose the one that gives the best offer.  However, do take note that getting too many rejections is not good for you either. Just so you know, each loan application and rejection gets recorded on your credit report that in turn, affects your credit score and your loan approval chances.

The best thing to do is keep your CCRIS report clean, as it will ensure the banks favour you.  Additionally, you can can get an advice and/or check with us before applying, to see which bank fits you best.

 

Didn’t Submit the Right Documents and Details

This is every important part to the Banks.  Sometimes lack of necessary documents or incorrect details can make to rejection. This is why it’s important to make sure the application is done correctly so that you can avoid unnecessary thing happen to your loan application.  Make sure you double-check your application form to ensure that it is filled up correctly and submit all required documents to the bank’s representative without fail.

 

So, What Should You Do Next?

Here the above the information show that as to why your loan got rejected.  Don’t give up just yet!  As an applicant, understanding these reasons are vital to prevent time wastage and the possibility of rejection.  

Here are steps that you can take after the rejection:

Check with the Bank why your application was rejected.
If it’s due to a poor credit report, get a free copy of your report and see what can be improved.

 

 

Talk to us if your Bank loan was rejected by Bank and see what can we help you further.

 

 

Thank you for reading!

 

 

 

 

 

 

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