UAE: Does your loan application keep getting rejected despite having good credit? Here’s why

UAE: Does your loan application keep getting rejected despite having good credit? Here’s why

Dubai: If your loan applications keeps getting rejected, despite having a good credit history, there may be a common reasoning as to why that is. Your debt-to-income ratio, or simply known as debt ratio, is detrimental to lenders deciding whether to approve your loan application or not. And if your credit history is intact, but your loan applications gets rejected, in all probability it is because your ratio is low. But what is it exactly? Your debt-to-income ratio is the percentage of your monthly income you must spend on your monthly debt payments plus the projected payment on the new loan. This is to check whether your current debt burdens increase or decrease your risk of taking on a new loan. Generally, the lower your debt-to-income ratio is, the more likely you are to qualify for your loan, be it a mortgage, car loan or education loan. “Yet, the reason (for rejection) may have nothing to do with you personally,” analysts at lender Citi noted. “Instead, it may have everything to do with whether you fulfill a certain set of criteria.” Each issuer maintains its own list of measures against which all new credit applications are checked. These may include