Why Was My Home Loan Application Rejected?
Key Reasons and How Banks Evaluate Borrowers
Applying for a home or condominium loan is not based on income alone
In practice, financial institutions assess multiple factors
Loan rejection can be summarized into two main cases
Case 1: Property Value Lower Than the Requested Loan Amount
Home loans are secured loans
Banks appoint independent valuers
to assess the actual market value of the property
used as the basis for loan approval
If any of the following occurs → “Loan Rejected”
Appraised value is lower than the purchase price
Appraised value is lower than the requested loan amount
Property location or condition is considered high risk
Outcome
The bank may
Approve a lower loan amount
Or reject the application entirely
Even with strong income, insufficient collateral value prevents loan approval
Case 2: Borrower Does Not Meet Bank Criteria
Even if the property passes valuation
if the borrower fails risk assessment standards
the bank may still reject the loan
Banks typically evaluate borrower readiness based on the following
Key Borrower Qualifications Considered by Banks
1) Stable Employment
Borrowers more likely to be approved include
Government officers / state enterprise employees
Permanent staff of medium–large companies
Continuous employment of at least 6 months
Work location also matters. Same occupation in a low-risk area is favored over high-risk locations
2) Genuine Repayment Capacity
Banks review net monthly income after expenses
which must sustain long-term repayments
Not just “able to pay the first month”
but “able to pay for 20–30 years”
3) No Excessive Debt (Debt Burden)
Having debt is not wrong
but it must remain manageable
Debt-to-Income (DTI) ratios commonly used by banks
Income ≤ 30,000 THB
➜ Debt should not exceed 40%Income 30,000 – 70,000 THB
➜ Debt should not exceed 50%Income ≥ 70,000 THB
➜ Debt should not exceed 60%
4) Savings and Consistent Bank Statements
Banks want to see
Stable income deposits for at least 6 months
Remaining balance in the account
Or savings equal to one-third of monthly income
Funds that enter and exit quickly are easily detected and considered high risk
5) Clean Credit Bureau Record
No missed payments
Not blacklisted
Demonstrates financial discipline
If previously listed all debts must be cleared and at least 12 months must pass before reapplying
6) At Least 20% Down Payment
Banks usually finance 80–95% of property value
the remainder is the borrower’s responsibility
Therefore, borrowers must prepare
Down payment
Transfer and registration fees
Emergency reserve funds
7) No Emergency Loan History
Frequent emergency or short-term loans
indicate financial instability
and are used as additional risk indicators
FAQ
Q1: Why was my loan rejected despite high income?
Because banks assess both borrower and property
Low valuation or high debt may still cause rejection
Q2: Can I apply if I have existing debts?
Yes, if total debt remains within DTI limits
Q3: How important are bank statements?
Very important—they reflect real financial behavior
Q4: Can I apply after a bad credit history?
Yes, after full settlement and a minimum 12-month waiting period
