Make These Small Fixes And Re-Apply With Success
What, are you ready to give up on your dream of owning a dream home just because your bank said no your loan application?
One rejection is not the end of the road for your dream to own a lovely home. At best, it is just a road block, ahead of which you can scoot away just like that if you keep the following tips in mind.
So, do away with the sad face (it doesn’t look good on you, anyway) and get to work.
4 steps to turn a lender’s ‘no’ into ‘yes’
• Dig deep into the details
The lender would’ve sent you a letter stating why your loan application was rejected. Such letters are generic and may or may not mention the real reason. Read it carefully and see if the listed reasons make sense.
If you can’t make much sense out of it, pick up the phone and talk to an appropriate official to learn the real reasons behind the denial. This knowledge will help you when you reapply.
When it comes to home loan numbers, three factors are all important: the loan amount, tenure, and interest rate. How much and for how long you’ll have to pay installments depends on these three things.
For your monthly installment to work out with your monthly income, any of the three must occur: (1) the loan amount should be reduced, (2) the tenure should be increase, or (3) the interest rate should be increased.
Keep your mind open to suggestions when you sit with the bank’s representative to discuss a way out. You should also submit your loan application to other lenders to see who’s offering the best deal.
• Clear existing debts
Have you already taken several loans? If yes, these existing loans might be the reason why your loan application failed to elicit a favorable response.
Lenders like customers with a low or reasonable debt income ratio. If you already have taken sufficient loan in comparison to your income, for a lender giving you further loan would be a high-risk decision—and lenders don’t do high risk, especially when picking borrowers.
So, first pay off your existing debts and then reapply.
• Make efforts to improve your CIBIL score
In addition to your monthly income and current loan portfolio, lenders also take into account your repayment history, that is, how well you’ve paid your debts so far.
Your CIBIL report gives this information to lenders. Your CIBIL score, on the other hand, is a measure of your repayment performance. Apart from knowing your CIBIL score, you must check your CIBIL report, for all information related to your loans and credit card usage is listed in it.
On opening the CIBIL report, first check if information listed is correct. If you find some information is incorrect, contact CIBIL with relevant proof. Sometimes incorrect information, not financial indiscipline, is the real reason behind a poor show.
If you had taken poor financial decisions in the past, immediately start remedial action, which includes taking steps like paying off current debts, paying credit bills on time, and reducing credit card usage if it’s high.