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Home Ownership Loans (KPR) are a common financial solution chosen by many to realize the dream of owning a home, including purchasing subsidized housing. However, it is not uncommon for KPR applications to be rejected by banks.
Each bank has its own reasons for rejecting a KPR application. Here are some of the most common reasons:
Poor Credit History
One of the main reasons for KPR rejection is a poor credit history. Banks assess the risk of prospective borrowers, including reviewing their credit records.
If you have a bad credit history, such as frequent late payments or outstanding debts, the bank may reject your KPR application. This is because the bank considers you a high-risk borrower.
Low Repayment Ability
The bank will also evaluate your repayment ability based on your income and financial obligations. If your income is too low to meet KPR installment payments, the bank may decline your application.
Banks need to ensure you have sufficient financial capacity to consistently repay your KPR installments.
High Debt Ratio
The debt ratio is the comparison between your total debt and your monthly income. The bank considers this ratio when evaluating your KPR application.
If your debt ratio is too high, the bank may feel you are already burdened with excessive debt, making it challenging for you to meet KPR repayment obligations. This could lead to your application being rejected.
Incomplete or Invalid Documents
Another common reason for KPR rejection is incomplete or invalid documents. Ensure you provide all the required documents requested by the bank and that they are in good condition and meet the bank's requirements.
Non-Compliant Collateral
The bank will assess the value of the collateral offered for the KPR. If the collateral does not meet the requirements, such as having legal issues or being in poor physical condition, the bank may reject your application.
Banks need to ensure the offered collateral holds adequate value and qualifies as acceptable security.
Bank Policy Changes
Another, albeit less common, reason for KPR rejection is changes in the bank’s internal policies. Sometimes, banks may alter their requirements or acceptance criteria for KPR due to market conditions or business strategies.
In such cases, there may not be much you can do other than look for another bank that aligns with your needs.
Applying for a KPR requires careful preparation. Make sure you have a good credit history, sufficient repayment ability, and complete and valid documents before submitting your application.
If your KPR application is rejected, don’t lose heart. You can work on improving your financial condition and try again at a better time. Be sure to also choose a property developer willing to assist you throughout the KPR application process.
Ingria Group is a reliable developer of subsidized and commercial housing. Their properties are located in many strategic cities across Indonesia. Contact our marketing team now to secure the best offers!
