Many times people resort to home loan to buy their dream house, but the bank rejects the application due to various reasons. Even if you feel that your house will not be built if the application is rejected by the bank, then it is absolutely reasonable to think so. Because by taking some smart steps you can change the bank’s no to yes.
If your home loan is getting rejected again and again, then you can follow these five easy tips, this will convince the banks and approve the loan.
Strengthen CIBIL Score
The first and biggest reason for loan rejection is CIBIL score. If your CIBIL score is low then the bank is afraid that the money may get stuck. So first of all strengthen your CIBIL score. Pay credit card bills on time, never miss EMI of old loans, and make regular payments. In a few months the score will go above 750 and the bank itself will be ready to give the loan. Apart from this, check for free on CIBIL website and correct mistakes.
extend the loan tenure
Another way is to extend the loan tenure. If you choose less tenure i.e. less years then the EMI becomes higher and the bank thinks that you will not be able to repay. So make the period 20-25 years or more. EMI will reduce and the bank will feel that you can pay easily. This greatly increases the chances of approval.
Add co-applicant
If your CIBIL is bad but you need a loan immediately, then add your wife, brother or parents who have good CIBIL. With co-applicant, income doubles, repayment power increases and trust in the bank is built. This trick works in most cases.
Apply for loan in old bank only
Where your savings account has been running for years and your salary is credited, the bank knows you very well. There is a complete record of your transactions, trust is built quickly. Do not go to a new bank, they ask for more documents and there is more scrutiny, the chances of rejection increase.
make a higher down payment
If the bank is rejecting, then put more money from your pocket, like 20-30 percent or more of the property value. This reduces the risk of the bank, they feel that you are serious and will pay the EMI easily. Also check the Fixed Obligation to Income Ratio i.e. FOUR. If it is more than 50 percent then the loan may be rejected. Loan rejection is common, but if you apply again with the right steps, there is a 90 percent chance that the bank can approve it.
