Sometimes even when you take your loan applications seriously and work day and night on them, they can still get rejected. It is not because you weren’t putting your blood, sweat, and tears into it, but it might be because of a wide array of reasons ranging from technical issues to low credit scores. Here are a few top reasons why loan applications usually get rejected and tips to prepare better.
1. Stable job
Banks take job stability very seriously. There are high chances for your loan to get approved if you have been working with the same employer for 2-3 years and if there are fewer job changes in your career graph.
2. Good credit score
Having a good credit score increases your chances of getting your loan approved just like how a poor credit score can spoil your home loan dream. Credit scores are recorded by CIBIL(Credit Reports and Risk Management Solutions). This is why timely payment of dues and EMIs of other loans, etc. is important.
3. Avoid previously rejected loan applications
CIBIL record shows the previous history of rejected loan applications. It is highly advisable to avoid such incidents. If your loan gets rejected once, analyse the mistakes you made during the procedure and rectify them before you go ahead and apply for another home loan. This way, you could keep the number of rejected loan applications to a minimum.
4. Work-type
It is easier for your loans to get approved if you are a salaried employee with a stable job. On the other hand, it might be a little bit hard for self-employed applicants to secure a home loan, especially if it is a small business. However, with accurate paperwork, tax filing etc. you can still make it possible.
5. Age is a factor
Sadly, this is true. The loan can get rejected if the age of the applicant is close to the retirement age. If you are young, you will get a loan with a long tenor and low EMI. On the other hand, if you are old, the entire loan scenario will only work out if you are okay with a shorter tenor and higher EMI.
Apart from these, if you are looking forward to applying for a loan, make sure you return your income tax every financial year, buy the property or plot from a trusted builder, and if you are buying plots, go for branded plots. Mantri KNS Carica, for example, has branded plots by pioneers of the real estate industry in India. When it comes to loan approvals, the banking sector tends to go easy on properties or plots by reputed builders, like Mantri. Check out the Mantri KNS Carica website to know more about this plotted development that is located in an up and coming part of South Bangalore.