5 Steps to Determine Home Loan Eligibility and Prevent Rejection in Malaysia

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Are you aware that a loan rejection will be recorded in the system for up to 12 months, potentially affecting your chances of reapplying for a loan within this period? Keep reading to learn how to prevent loan rejection in Malaysia.

Financing goes hand in hand with affordability unless you are purchasing your property entirely with cash.

Gain a broader understanding of housing loans, learn how to determine home loan eligibility, and explore how loan eligibility calculators like LoanCare can help minimize or prevent loan rejections in Malaysia.

What Should You Do If Your Loan Application Gets Rejected?

To maintain responsible and transparent financing protection for both consumers and financial institutions, a credit check is conducted by banks on the borrower’s CCRIS report, income supporting documents, debt service ratio (DSR), and net disposable income (NDI) when assessing a loan application.

For DSR, the generally accepted average is around 60%. Some banks adopt a more lenient approach, allowing up to 80% DSR, while others are more conservative, setting the limit as low as 40% DSR.

Regarding NDI, banks use it as a measure to ensure that home loan borrowers can maintain a standard lifestyle after fulfilling all loan commitments.

Therefore, if the bank’s lending criteria are not met by your profile, your loan application will be rejected—here’s what happens next.

Will loan rejection be recorded by CCRIS in Malaysia?

Have you ever heard that CCRIS records your loan rejection in Malaysia? That is actually a common misconception.

In reality, information about rejected loan applications is not included in CCRIS reports, as stated in Bank Negara Malaysia’s (BNM) CCRIS FAQs.

This ensures that any bank or financial institution reviewing your loan application will not be influenced by another bank’s decision.

Additionally, BNM does not blacklist borrowers on CCRIS when their loan applications are rejected, nor does it provide any opinion on the information in the credit report.

A CCRIS report only displays a borrower’s financing and repayment history with financial institutions over the past 12 months. It does not evaluate a borrower’s creditworthiness.

As mentioned, a loan rejection could set you back for up to 12 months before you can apply for another loan. While you could continue applying, it wouldn’t reflect well on your record.

Therefore, you should only submit a loan application if you are confident in your ability to repay and have a high chance of approval.

With this in mind, iProperty Malaysia has developed a home loan eligibility calculator—LoanCare—that allows you to compare loan options from 17 banks in Malaysia for free.

This user-friendly home loan eligibility calculator requires no registration or documents, only minimal personal details about your financial situation.

By using it, you can avoid loan rejections and the consequences that may follow.

Determine Your Home Loan Eligibility with LoanCare in 5 Simple Steps

Step 1 – Access LoanCare on iProperty.com.my
All set? Click on ‘Get Started’.

(Image Source: iProperty)

Step 2 – Enter Your Details

Complete the fields under the Employment & Salary, Earnings, and Commitment sections.

(Image Source: iProperty)

Step 3 – Check Your Indicative Loan Eligibility

For instance, if you are 30 years old with a monthly income of RM5,000, a home loan repayment of RM1,500 per month, and a car loan repayment of RM1,000 per month, your indicative borrowing amount would be RM249,150.

You can modify the entered figures by clicking on ‘Edit Step’ in the right column.

(Image Source: iProperty)

Step 4 – Provide Your Email Address to Receive the Full Loan Eligibility Report

(Image Source: iProperty)

Step 5 – Open Your Email to View the Full Loan Eligibility Report

(Image Source: iProperty)

Let the Home Loan Eligibility Calculator Support Your Homebuying Journey

Although many property buyers apply for multiple loans to increase their chances of approval, this approach can backfire and lead to rejections. Submitting too many applications might raise concerns about your intent.

If you are confident in your financial standing and have taken the necessary steps to improve or demonstrate your creditworthiness, you may apply for a home loan with two or three banks.

Alternatively, use LoanCare first to save time and reduce the risk of rejection. As shown above, the process takes only five simple steps with minimal financial details required—no documents needed!

Give it a try and explore your options before submitting your next home loan application. Try LoanCare now!

6 Other Ways to Improve Home Loan Approvals

Maintain a Good Credit Record
Ensure all payments for credit facilities or liabilities are up to date. Without a repayment history for credit cards or other financial commitments, banks cannot assess your reliability as a borrower.

Demonstrate Financial Stability
Show that you can manage monthly repayments or work on reducing your existing loan commitments and debts.

Provide Complete and Accurate Financial Information
When applying for a home loan, fully disclose your financial position and submit all necessary documents requested by the bank.

Consider Government Housing Schemes & Incentives
Explore available government programs that may assist with home financing.

Acknowledge and Address Loan Rejection Reasons
Understanding why your loan was denied can help you take corrective measures before reapplying.

Stay Informed About BNM’s Borrowing Regulations
Keeping up with the latest policies from Bank Negara Malaysia (BNM) ensures you make well-informed borrowing decisions.