A credit score means a lot while taking a loan. With a good credit score, the loan is quickly found, and the interest rate is likely to remain low, but sometimes the loan is not found despite a good credit score. There are some reasons for this. Whenever a lender gets an application for a loan, he sees whether the borrower will be able to repay the loan with full interest on time. The lender finds out this through a number of facts, and if he has any doubts, the loan may be delayed, or the loan deal may be canceled. In this article, let's know the reasons why good credit scores are not able to get a loan.
The age of the borrower is very important. Many times, loans of people over 60 years are not sanctioned. Many a time, people who have come to their retirement age are not eligible to avail a home loan or a loan of more than 50 years with a period of 15 to 25 years. The lender feels that the borrower will not be able to fill the EMI after retiring.
The monthly income in any loan application is of great importance. Whenever a lender receives a loan application, he assesses the repayment capacity of the applicant. This assessment is made based on monthly income, stability of the source of income, and a number of dependents. If your credit score is high, but the monthly income is low, your loan application is much more likely to be canceled.
The ratio of monthly income and EMI:
The EMI-income ratio is seen by lenders while sanctioning loans. If the total existing EMI repayment of the borrower is less than 50% of his monthly income, his new loan application will likely be sanctioned.
Facts related to salary:
Most banks and financial institutions demand at least two years of work experience for the loan lane. This reduces the risk of default. If you are changing jobs quickly, it is a sign of a volatile career. The credibility of such people is reduced.
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