How to get a home loan even after it gets rejected
A home loan is one of the best options, to arrange the funds needed for buying a home. Generally, it is easy to avail of a home loan, if the applicant has all the documents in place and has a good credit history. However, banks may still reject a home loan application. Some important reasons for rejection are:
- A bad credit score.
- Bad credit history, which may include a loan settlement in the past that is reflected in the credit report.
- The project is not approved by the bank.
- The home loan application, is made for a project that falls in a restricted area.
Getting a home loan, despite a prior rejection
According to Shaji Varghese, business head, PNB Housing Finance Ltd, “An applicant can still get the loan, even if it is rejected once, by taking the following measures:
- Due to a bad credit score – In this case, the best solution, is to upgrade your credit score by settling the previous/ongoing dues. The score will improve over a period of time as the dues get cleared, allowing you to avail of loans as per requirement.
- Due to bad credit history – In case of a bad credit history, you should settle the pending dues with your financier and obtain a ‘no dues certificate’. After settling the dues, you can again approach the home loan provider and re-apply for the loan.
- Lower financial eligibility than the required loan amount – In such cases, you should meet the home loan provider and explore the following possibilities:
- Spreading the loan over a longer tenure, which can reduce the EMIs.
- Adding a guarantor or a co-applicant, which can increase the income that is considered by banks.
- If the applicant has an ongoing loan, which is of a shorter duration and higher interest, then, it is advisable to close the loan to enhance the financial eligibility.
- You can search for lenders who may approve the application, albeit with a higher charge perceiving the risk or/and by adding a guarantor along with additional collaterals.
- A problem related to project approval – You can request your preferred home loan provider to approve the project. If that is not possible, you may look for an alternate property which is approved by them.”