Home Loan application: All You Need to Know About the Process
Most people in India end up taking a Home Loan to finance their property purchases. This has led to a constant demand for Home Loans and made the procedure of obtaining said loan, stricter. Banks are very stringent when it comes to approving Home Loan applications and usually consider a lot of things before they sign off on the loan. You have to be extremely cautious while submitting your application to the bank because a slight mistake in the form could lead to immediate cancellation. There are certain financial institutions like Bajaj Finserv that make the screening process very convenient and offer low interest rate Home Loans.
To make things easier on your end and give you a proper idea of what you are dealing with, here are some reasons your Home Loan application may get rejected.
Reasons for Rejection of Home Loan Application
Dubious Credit History
The biggest red mark on your Home Loan application is a past history of faulty credit payments. If you have any unpaid debt, or maxed out credit cards, your prospects of getting a Home Loan are greatly reduced. This is because, most banks check your ability to pay back the principal amount with the accumulated interest, before giving you a loan. Hence, having an unreliable credit history will automatically work against you and make the Home Loan acquiring process all the more difficult.
A Habit of Job Hopping
If you don’t stick around to a company for very long, you might find some serious obstacles in your path when you start looking for a Home Loan. A stable and well-established career can go a long way in getting you that dream house. But if you’re a job-hopper without solid financial backing, some banks might find it hard to give you a loan, fearing non-payment.
Loan for Non-Feasible Property
Another reason why your Home Loan application may be rejected is if you require the Home Loan to purchase an old property. Certain banks have strict policies that bar loan approvals for the purchase of properties that are older than 20 or 30 years. So, if you are looking to buy such properties, make sure that the lender has no such barriers in place.
Continued Application Rejection
If you have had your Home Loan application previously rejected, then you will find it hard to get your latest application approved since banks access and record such information. They will look back at your previous application and judge your new one on the same criterias they used to reject the old one. If the previous reason for rejection still stands true, you probably won’t get an approval.
Tips to Avoid Rejection of your Home Loan Application
Now that you know the reasons for loan application rejection, let’s discuss how to ensure your Home Loan application does not get rejected.
Maintain a Favourable Credit Score
The importance of having a favourable credit score cannot be emphasised enough. A good credit score not only adds value to your Home Loan application, but also instils confidence in the lender about your ability to pay back the loaned amount.
Provide Correct Information-
Another important tip you should keep in mind is to always provide true and correct information in your application. Concealing important information or providing false data is a sure-shot way to ensure that your loan application gets rejected.
Survey the Market-
Instead of feeling dejected after your application gets rejected, scope out the financial market for banks that are less stringent about approving Home Loans. Bajaj Finserv, for instance, has an easy approval policy and also offers Home Loans with part prepayment facility.