Answer Book question
Because collateral is the bank's last resort, not its reason to lend. Banks lend against cash flow; collateral only reduces their loss if cash flow fails. A proposal with weak repayment capacity, a poor credit score, thin documentation or an unconvincing market will be rejected regardless of the house you offered.
Because collateral is the bank's last resort, not its reason to lend. Banks lend against cash flow; collateral only reduces their loss if cash flow fails. A proposal with weak repayment capacity, a poor credit score, thin documentation or an unconvincing market will be rejected regardless of the house you offered.
An applicant offers a ₹1 crore property for a ₹20 lakh loan. Rejected: DSCR 0.9 on the bank's numbers, and a settled-but-written-off credit card in the applicant's history. The property was irrelevant.
Banks do not want to own your house; they want EMIs. Underwriting tests repayment first.
Written rejection reason DSCR on the bank's assumptions Credit report Documentation Market evidence in the project report
Offering more collateral in response to a cash-flow rejection.
Ask for the rejection reason in writing; Kerala Rising can help rework the project report.
Fix DSCR by reducing loan size or improving revenue evidence; clean the credit report; reapply.
None.
Get the reason Fix the proposal Reapply or try another bank
What does a bank actually look for in a project report? What is DSCR and why does the bank care?
Loans, grants & subsidies
RBI directions on MSE collateral-free lending · CGTMSE scheme guidelines · MSMED Act 2006 delayed-payment provisions · MSME Samadhaan portal · Udyam registration portal · Kerala Industries Department scheme documents (verify current terms) Rates, limits and whether you may qualify change. Confirm with the official source. Ask Kerala Rising: Send us the quotation before you pay the advance. Or send us the bank's letter before you sign the mortgage. We will tell you what questions to ask. WhatsApp +1 443 595 9000 · keralarising.com Kerala Rising › Business › Finance · Business 17
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