Availing a home loan in itself is a long process. Ask anyone who has opted for a home loan and you would know that there is a lot of paperwork and the process takes more time. When all ends well, you get to stay in your dream home. But there is a possibility of your loan application being rejected. If that happens, there is no need to panic and be disheartened. There are many reasons why your home loan can be rejected. All you need to find out is;
Why was the home loan rejected?
What can be done to get the next home loan application accepted?
Get clarity on the reason for Rejection:
On your home loan application being rejected the lender provides the applicant with a rejection letter. If the reason conveyed for the rejection is not clear, please get a precise reason on why the lender rejected your loan application. This helps you in clearing any shortcomings and reapplying for the loan again.
Improving your credit profile:
Lenders look upon the applicant’s credit history while deciding on approving the loan application. If the applicant has a history of default in payments for a loan or a credit card and cases involving bounced cheques, this impacts your credit profile and results in a negative impact. Hence you can work on improving your credit score by timely paying off your bills and loan EMI’s.
Reduce your existing debts:
Having more debt does not reflect well on your credit profile. It shows the bank that you are more dependent on debt to meet your needs. Having more debt utilization also increases your chances to default in loan repayment as per the lender. Hence you can start by repaying off and closing few debts.
Reduce the loan amount:
There is a high possibility that your home loan application had been rejected because as per the lender your monthly income might not be sufficient to support the required home loan amount. Hence as a borrower, you can rework the loan amount in such a way that the lender can feel more confident and approve your home loan application. You can use the loan calculator on Ruloans website to estimate the loan amount you need.
To find out more about how to apply for a home loan