What to Do If Your Home Loan Application Gets Rejected?
At some point or the other, everyone dreams to have a home. But, there are many who don’t succeed to turn their dream into reality either because of limited finances or family responsibilities. For them, the only option left is to opt for a home loan. It is one of the most convenient and easy ways when it comes to buying a dream home. We said easy as any bank can lend a home loan if you have all the required documents and you fulfil their eligibility criteria. However, things are not that easy that it may sound. There are hundreds of reasons because of which a home loan applicant face rejection. And mind it, a single rejection on your home loan application is more than enough to shatter all your dream.
Now what to do if your home loan application gets rejected? Well, read further in this post by Gateway Propmart to find the answer.
Some Common Reasons For Home Loan Rejection
It is really important to look for some common reasons for home loan rejection before finding the solution. Some of the reasons are listed below:
Bad Credit History
One of the biggest reasons that your home loan application faces rejection is your bad credit score. If you ever got defaulted in the paying your loan or credit card bill, then your default status is reported to CIBIL and it can affect your chances of getting a home loan.
Standing Guarantor of a Defaulted Loan
If you are standing as a guarantor of a defaulted loan, the bank reflects it in your CIBIL score and will also make you defaulted.
You are Over Leveraged
If your debt to income ratio is more than 50%, there are strong chances that your home loan application may face rejection.
Poor CIBIL Score of Co-applicant
Even if you have a 750+ credit score, but your co-applicant is listed in the defaulted list earlier, then for sure, your loan application will also get rejected.
What to Do to Get the Home Loan?
- If your home loan application has faced rejection because of your bad credit score than it is advisable you can increase your credit score by clearing all your current dues. Though it will take some time to get reflected in your CIBIL score but it will definitely do over a period of time.
- If it is because of bad credit history then you should talk with your financer and ask them to offer the best possible way to clear all your dues. And after obtaining the ‘No Due Certificate’, you can again approach the bank and re-apply for a home loan
- If your income is less than the eligibility, you can explore below-given possibilities, such as:
- Take loan for a longer tenure to reduce EMIs
- Add a co-applicant
- You can close a loan if it is of a shorter duration but have a higher rate of interest, it will enhance your financial eligibility
Tips to Get a Home Loan Without a Hassle
- Keep your banking records clean, such as pay your EMIs on time, avoid cheque bounces, etc.
- Check your CIBIL score on a regular basis, so that you can avail a loan when required
- Don’t make too many enquires for the home loan
- Identify properties that are pre-approved by the lenders
- Maintain a good balance in your bank account to pay for down payment and cut-short the loan amount