New Delhi, Aug. 6 -- Two people may earn similar monthly salary, work in the same cities and apply for a loan of the same amount, yet one may receive quick approval while the other gets a lower loan amount, a higher interest rate or even rejection. For many borrowers, this can feel unfair but banks look at many more factors other than the salary figure mentioned in the application.

Before approving a loan, banks run a detailed assessment of an applicant's financial profile to understand how likely they are to repay the loan on time. Though income plays an important role in this assessment, it isn't the only determining factor. These checks can sometimes change the outcome even when two applicants appear similar on paper.

One of the bigg...