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Home Loan Rejection: An Overview

If you’re in the market for a Home Loan, we advise you to consider all the possibilities that could lead up to a Home Loan rejection, so you can take the time to insulate your application from such adverse results. Read on to know more.

Reasons for Home Loan Rejection

Bad Credit Score

Lenders approve those borrowers for a Home Loan who have an ideal CIBIL score of 750+. Anything slightly below 750 might get you a Home Loan but it may not be as competitive, in terms of offerings.

Frequent Job Changes

To reduce the risk involved for them, lenders prefer giving loans to individuals with employment and income stability. Frequent job changes depict you as unreliable. Those who have changed too many jobs in too little time often face Home Loan rejection. 

Incomplete Documentation

One of the reasons for the rejection of Home Loan applications is incomplete documentation. So, if you are applying for a Home Loan, make sure your paperwork is complete and you have submitted all the documents your lender requires for Home Loan approval. 


Lenders prefer lending money to young individuals as they have more working years ahead of them and thus, their repayment capacity is also good. If you are nearing retirement, lenders may hesitate to sanction you a loan.

Multiple Loans

As mentioned before, if your chosen lender perceives you as a high-risk borrower, they won't offer you a Home Loan and having multiple loans does just that - it paints you as a high-risk borrower. 


If you took a loan and paid it off but did not take an NOC from your previous lender, your current lender will reject your loan application.

In conclusion, if you do not want to face Home Loan rejection, do the following: 

  • ​​ Apply only when your CIBIL Score is 750 plus.
  • Do not change jobs often.
  • Make sure you have all the documents your lender may need ready with you. 
  • If you already have multiple loans running, close a few loans before applying for a Home Loan. 
  • Make sure to obtain a NOC from your previous lender before applying for a Home Loan with a new lender.

*Terms and conditions apply.

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