Know the Reasons Behind Secured Loan Rejection
Loan against property is a viable option when compared to many other loan options available. These are secured loans that put the both the lender and borrower at lower risk. The chances of approval are high as these loans are backed by collateral. Surprisingly, you may face rejection from the lender for unknown reasons. Know some of the reasons why your secured loans too face rejections from the lender. Rather than being disappointed with the reasons for rejection, make an effort to understand the reasons so that you can stay prepared to get the loan approved from the lender.
Poor credit score
A credit score is a strong obligation that borrower needs to adhere to get your loan application approved. Good credit score of the borrower establishes a trust to the lender about your responsibility to pay off the loan. If you have poor credit score, the lender will be reluctant to offer you a loan in spite of pledging the asset as collateral. However, the lender declines your loan application only when your credit score is too low to consider. Any errors in the credit report will also be reasons for your loan application rejection.
Insufficient asset and income documentation
The collateral you pledge to get the loan from the lender should have high property value than the loan amount you want to avail from the lender. If a value of the property is lower than the amount required by you, loan application will be rejected. Make sure the property you pledge You need to provide support documentation that proves your repayment capability to pay EMIs comfortably after meeting all the expenses.
The property you pledge with the lender is considered as one of the crucial things while approving the mortgage loan. The property that you are going to pledge should be free from any disputes. Any irregularities in the property that is pledged to avail loan against property will pose threat to the minds of the lenders thus resulting in the deny of the loan.
One big reason why most of the loans are rejected by the lenders is additional debts in your account. You should keep all your expenses within the limit till the loan is approved by the lender. Once the loan is approved by the lender, the promise can never be taken back.
In a rush to avail loan, many people fail to furnish complete information in the loan application. Though they are many lenders who offer the loan, mortgage loan lenders are not free enough to fetch every missing detail in the loan application. If you fail to provide any crucial and mandate information in the loan application in a hurry to submit it to the lender. There are high chances that your mortgage loan application is rejected by the lender.