First Time Business Loans – What You Should Know?

1
Why was My Home Loan Application Declined

• HOME LOANS

2
Why was My Home Loan Application Declined

• All of us would have a doubt in mind of the
  approval probability when applying for a home
  loan. At times even if you have good income,
  there are chances of getting home loan rejected.
  The reason for this is banks judge you based on
  the ability to repay loan.
• Too many Loans outstanding which is above
  Income/Repayment Capacity
•  If you are someone who is already juggling
  between too many outstanding loans, then there is
  very less chance of getting a new home loan
  application approved. Bank will compare your
  income with the repaying debt, this will bring
  down the availability of income to repay new
  loan. The real income considered while approving
  loan is your actual income minus (all expenses
  outstanding loans repayment amount 10 savings
  from income)

3
Bad or Poor Credit Card Payment Track Records

•  Those who have been accumulating credit card
  dues will start facing the pinch when it comes to
  home loan application. Your loan application will
  not be approved if there are lot of credit card
  dues and defaults. Lender will easily get access
  to all these information and can even check if
  you have defaulted payments in the past.
• If You are a Loan Guarantor
•  It is important to be extremely cautious if you
  are signing as a guarantor to someone. The risk
  of default will equally impact the guarantor.
  Unless you are 100 sure that the borrower will
  repay the loan amount, do not stand has a
  guarantor. Also beware of the fact that this can
  take a toss on your CIBIL scoring.
• If Your Residential Address is in Defaulters
  List
•  As precautionary moves make sure the residential
  address you are staying is free from all illegal
  transactions and activities. Also if you are
  planning to purchase a property that does not
  have clear titles, there is high chance of
  getting loan rejected by banks.

4
If Co-applicant has Bad or Poor CIBIL Score

•  If you are planning to apply for a home loan
  with co-applicant, the income, CIBIL score, age
  of the co-applicant is equally important as that
  of yours. Banks will check the credibility of
  both the applicants before approving huge loans
  such as home loan. Having clean payment records,
  good income and meeting all eligibility criteria
  will make it easy to get a home loan approved in
  India.
• If You are a frequent Job Hopper Consistency is
  very important in every aspect of life and
  especially when it comes to job. Being a
  continuous job hopper will hold you against
  getting a loan in India. Job hopper will have
  high chance of being job-less and this could
  affect the loan repayments.

5
If You are trying for a Joint Home Loan with
Friends or Sisters

•  Trying for joint loan with friends and sisters
  is the other reason why most of the home loan
  applications are being rejected. None of the
  banks or NBFCs in India will approve a joint loan
  among friends or sisters.
• Past Records of Loan Application Rejection In
  case if you have applied for a loan recently and
  if it has been rejected, then it is wisely to
  take a break from re-applying for a loan
  immediately. Continuously applying for loans will
  impact your credit score and will have a drastic
  fall. Whether you are trying for a car loan, gold
  loan or simply a personal loan, the minute the
  application is rejected it will be recorded in
  your CIBIL score.
• How to Reduce the Chances of Rejection of a Home
  Loan Application?
• Instead of worrying about home loan rejections,
  it is always a smart move to get it application
  right at the first go. In order to get the home
  loan approved right at the first it is important
  to meet the below criteria before applying for
  home loan.

6
Ensure You have Stable Employment

• Ensure You have Stable Employment
• First and foremost requirement for applying a
  home loan is having a regular income. At times
  even if the applicant has high CIBIL score and
  low income there are chances of getting home loan
  rejected. CIBIL score and income should go
  hand-in-hand, based on these analysis banks will
  decide how much loan amount should be approved
  and at what rate of interest.
• Check if You are Meeting all Eligibility
  Criteria
• Apart from income, the other eligibility factors
  such as age, employment status, property location
  and credit score has to be met by the loan
  applicant. Nowadays checking home loan
  application eligibility is not a tough task.
  There are many online website which will give
  instant information on the eligibility with
  specific banks and NBFCs.

7
What to do Next after a Home Loan Application has
been Rejected?

• Getting home loan application rejected is not an
  end. Even if your home loan has been rejected by
  one bank, there are chances of getting is
  approved once you meet all requirements. Once
  loan is rejected, do not immediately apply for
  another one. Take a break to analyze why the loan
  was rejected. Go through the below steps to avoid
  further loan application rejection
• Know why loan was rejected is important. Spend
  time and effort to investigate the reason
• Go through CIBIL score and its remarks. This will
  give a clear picture of what went wrong and how
  to fix it
• Do an error-check of your details with the CIBIL
  at times it can be the case that they have some
  error in the recorded information. Get this fixed
  firstly before analyzing further