Home Loan Application Rejected: What's Next? Follow These Steps for Faster Approval - Loan Trivia

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Wednesday, 21 July 2021

Home Loan Application Rejected: What's Next? Follow These Steps for Faster Approval

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 It's not the end of the world if your home loan application gets turned down! Even though a home loan denial is annoying, there's no need to be discouraged. Instead, you can learn from your previous failures and succeed on your second try. Despite the denial of your home loan application, here are seven vital actions to assist you in getting your dream home:

  1. Find the reason for the rejection- The reason for the rejection may or may not be stated in the letter or email sent out by your lender. However, you can always contact the lender to find out why you were turned down. This is a crucial step since it will help you better prepare for your next home loan application. 

  2. Reduce the loan amount- One of the most typical reasons for home loan rejection is applying for a large loan amount without sufficient income to sustain it. If your home loan was denied, for this reason, you can lower the loan amount, so the lender has greater confidence in your capacity to repay the loan.

  3. Existing debts must be paid off- If you have several loans, there's a good possibility your home loan application was turned down because of it. Most lenders consider a higher debt-to-income ratio to be a red flag, as it raises the risk of defaulting on loan payments. As a result, if you have many debts, make sure to pay them off before applying for a mortgage.

  4. Increase your down payment- Making a higher down payment improves your chances of getting approved because you'll be borrowing less.

  5. Get a co-applicant or guarantor- If your income or credit history is insufficient for approval, enlisting the help of a co-applicant or guarantor (with stable income) can assist you to get a house loan.

  6. Evaluate your CIBIL score - A bad or low credit score can have a poor impact upon the lender and can lead to near sure shot rejection of the home loan application. Therefore, it is always advisable to maintain your credit score by being aware of all the repayments and dues. In addition, it will give the impression of your loyal and punctual history with the earlier debts.

  7. Check for all the documents- When applying for a home loan, make sure you have all of the essential documentation on hand. Your home loan application may be refused if you fail to present any required documents.

Armed with the information you need to know to avoid home loan rejections, you can now apply for the home loan with the right lender confidently.  Just make sure that all records, such as the credit score for the home loan being clear. There are many Indian companies offering home loans that feature competitive home loan interest rates, flexible loan tenor of up to 360 months, and ample sanction, perfect for your home purchase needs.

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