Bank entitled to decline loan application despite conditional approval

Concerns about lending decisions,
The bank approved Alistair’s online application for a home loan, subject to receiving “satisfactory supporting documents”. After he supplied the documents, the bank came back to say it could not accept the application. It said the documents showed he earned some of his income overseas and it had a policy of not including overseas income when assessing home loan applications.
September 2021

Alistair said he disclosed this fact in his online application and confirmed it in the follow-up documentation. He had, therefore, fulfilled the loan condition of providing satisfactory supporting documents. He also said the bank should have made it clear in its online application form that it did not include overseas income when assessing loan applications. It had not. Alistair said he felt misled by the bank. 

Our investigation

We found that Alistair had not actually disclosed that he earned income from overseas in his loan application although he had indeed provided the necessary supporting documents afterwards. However, the bank was entitled to decline the loan application if it did not meet its criteria. Also, the bank was not obliged to disclose its lending criteria in the online loan application, but it could have spelt out that applicants had to meet its lending criteria before it could approve their applications.


We considered the bank had not misled Alistair, a decision he did not accept.

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