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Decline Reason - High debt repayments than monthly income. What does it mean?

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praveensudhakaran

TF Premier
My application was rejected by SBI CARDS by saying door locked at the time of verification(Haven't received any calls, nobody reached on that day as per my CCTV footage). Later rejected multiple times, with the reason Due to internal policy. Recently I got to know from an executive that it is because my debt is higher than my income. My entire debt is 2X of my CTC. My emi is 40% of my take home.

Then what does that mean?
 
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Interestingly this same thing happened to me today as well! My application for SBI Octane card got declined and the agent said that is was because I was over-leveraged.

I have no loans or no EMIs just a bunch of cards. Should I close some cards to make sure my overall CL comes down? What is the formula SBI uses to calculate leverage? Any one knows how much x should ideally be the total credit limit be of my CTC?

I have one SBI CC with 18 years history. No history of late payements or defaults with SBI.
 
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rogerthat said:
I have no loans or no EMIs just a bunch of cards. Should I close some cards to make sure my overall CL comes down? What is the formula SBI uses to calculate leverage? Any one knows how much x should ideally be the total credit limit be of my CTC?
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there is no fixed formula. total cl/net income of 5:1 is a good ratio. Many also have 10:1 and still get approval.
You can close some cards or even ask to permanently reduce cl in some account.
But you have long and positive history with sbi. There might be some other reason.
 
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praveensudhakaran said:
My entire debt is 2X of my CTC. My emi is 40% of my take home.
Click to expand...
Ctc doesn't matter. Most bank look at net.
Your total debt(2x), EMI and total exposure (5x) all are pretty high. May be you can close few cards or permanently decrease cl in lesser used cards.
As you have HL with HDFC, why don't you negotiate to get a better card with higher rewards. This will help you transfer some of the spends and close unnecessary accounts.
 
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anotheruser said:
Just curious, why just CTC in picture? What if someone has other investments and savings?
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Even returns from other investments are reported in itr. Issuers look at 3 parts: regular net income and total income, total wealth.

Many businessman has "low income". But they have high wealth. They have no problem in getting any cards. You can also show your wealth ( expensive car, bike, land, house, business holdings, investments in mf, nps etc) to get cc or loan. But this method needs human intervention and certain approvals.
 
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sidp said:
there is no fixed formula. total cl/net income of 5:1 is a good ratio. Many also have 10:1 and still get approval.
You can close some cards or even ask to permanently reduce cl in some account.
But you have long and positive history with sbi. There might be some other reason.
Click to expand...
That's what I am suspecting too. Maybe something about my income isn't updated in their system I think.
 
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rogerthat said:
That's what I am suspecting too. Maybe something about my income isn't updated in their system I think.
Click to expand...
Also data mismatch is big turn off for Axis and amex. Sbi might be looking at that.

Like if one issuers is reporting old data of 20L and recent application report 30L. Or different address or any other important data. You can request all your issuers to report consistent data.
 
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sidp said:
Ctc doesn't matter. Most bank look at net.
Your total debt(2x), EMI and total exposure (5x) all are pretty high. May be you can close few cards or permanently decrease cl in lesser used cards.
As you have HL with HDFC, why don't you negotiate to get a better card with higher rewards. This will help you transfer some of the spends and close unnecessary accounts.
Click to expand...
Okay, all my cards LTF except Amex. Regalia, MRCC, Axis IOC, icici Apay were the recurring cards.

SBI was not a need, just curious what was that internal policy. Thank you for the information
 
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praveensudhakaran said:
Okay, all my cards LTF except Amex. Regalia, MRCC, Axis IOC, icici Apay were the recurring cards.

SBI was not a need, just curious what was that internal policy. Thank you for the information
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You only have 4 cards? Then reason for rejection might be something else.

Tell hdfc to upgrade regalia to dcb fyf or at least reg gold ltf, else you will move HL to icici they are offer emeralde. If you have high spend and trv, you can even stress for infinnia which many people have got recently.
 
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sidp said:
You only have 4 cards? Then reason for rejection might be something else.

Tell hdfc to upgrade regalia to dcb fyf or at least reg gold ltf, else you will move HL to icici they are offer emeralde. If you have high spend and trv, you can even stress for infinnia which many people have got recently.
Click to expand...
These are the 4 cards I am using regularly. Apart from these I have

ICICI Sapphiro
IDFC Wealth
Axis MyZone
RBL Duet
HDFC Tata Neu
Kotak League
Citi Rewards
SC rewards


Which channel is better for the negotiation calling customer care or email?
 
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praveensudhakaran said:
These are the 4 cards I am using regularly. Apart from these I have

ICICI Sapphiro
IDFC Wealth
Axis MyZone
RBL Duet
HDFC Tata Neu
Kotak League
Citi Rewards
SC rewards


Which channel is better for the negotiation calling customer care or email?
Click to expand...
Whether you use your cards or not, it is irrelevant here.
You are highly leveraged in the eyes of SBI, meaning you have more total granted Credit Limit inbuour total open credit accounts compared to to your total annual income.
SBI is follows this rule religiously total is over leveraged rule. I think their systems are automated with 4his rule. No manual intervention here.. I guess..

There is nothing you can do except for reducing this ratio either by:
1) Reduce total CL by closing some big CL CCs which were not in use.
2) Increase your annual income.


My PRO Tip here: to every SBI CC aspirant

Get your SBI CC at the very early stages of your CC journey. The earlier the better.
If you choose to get your SBI card in the later stage , over leveraged rule will hinder your chances of getting a SBI card...
 
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S S V said:
Whether you use your cards or not,nitnis irrelevant here.
You are highly leveraged in the eyes of SBI, meaning you have more total granted Credit Limit inbuour total open credit accounts compared to to your total annual income.
SBI is follows this rule religiously total is over leveraged rule. I think their systems are automated with 4his rule. No manual intervention here.. I guess..

There is nothing you can do except for reducing this ratio either by:
1) Reduce total CL by closing some big CL CCs which were not in use.
2) Increase your annual income.


My PRO Tip here: to every SBI CC aspirant

Get your SBI CC at 3he very early stages of your CC journey. The early the better.
If you choose to get your SBI card in the later stage , over leveraged rule will hinder your chances of getting SBI card...
Click to expand...
Same is for Standard chartered card if you want it get it at the initial stage only.
 
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S S V said:
Whether you use your cards or not,nitnis irrelevant here.
You are highly leveraged in the eyes of SBI, meaning you have more total granted Credit Limit inbuour total open credit accounts compared to to your total annual income.
SBI is follows this rule religiously total is over leveraged rule. I think their systems are automated with 4his rule. No manual intervention here.. I guess..

There is nothing you can do except for reducing this ratio either by:
1) Reduce total CL by closing some big CL CCs which were not in use.
2) Increase your annual income.


My PRO Tip here: to every SBI CC aspirant

Get your SBI CC at 3he very early stages of your CC journey. The early the better.
If you choose to get your SBI card in the later stage , over leveraged rule will hinder your chances of getting SBI card...
Click to expand...
Yeah, I got to know from the agent the card was initially approved and later declined by the backend. So it must be some algorithm at their end.


I made the mistake of closing the SBI CC i had.
 
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praveensudhakaran said:
Yeah, I got to know from the agent the card was initially approved and later declined by the backend. So it must be some algorithm at their end.


I made the mistake of closing the SBI CC i had.
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Chaitanya-a said:
SC approved many of my colleagues application easily who were over leveraged in the eyes of SBI. They don't follow this rule religiously.
Click to expand...

Correct. . We are getting many reports here in the TF community that SBI is very strict in the over leveraged cases..
 
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praveensudhakaran said:
Yeah, I got to know from the agent the card was initially approved and later declined by the backend. So it must be some algorithm at their end.


I made the mistake of closing the SBI CC i had.
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I made the same mistake though I have one more SBI Card (IRCTC) which is also my oldest card. I have closed five SBI cards until now: Bangalore card, FBB, Prime, SimplyClick and now BPCL.

I closed SBI BPCL hoping to get Octane. Only now I came to know that they weren't upgrading BPCL to Octane not because it is the same brand, but because I was over-leveraged. It also explains why I had such low credit limits on my SBI Cards.

I never tried to close the BPCL card fearing what if I closed it and then they won't give Octane, I won't have either. And exactly that happened!
 
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