Once you apply for a home loan from a bank or a non-banking finance company (NBFC), one of the things you are required to constantly check up on is your home loan application status. You can do this through the bank or NBFC’s online portal or an app that can be downloaded on your mobile phone. This also increases the transparency on the bank’s part, as you know your situation as to whether your home loan will be accepted or rejected.
Each bank and non-banking finance company has a specific set of requirements when it comes to checking your home loan application status. However, the following steps are common
-Your will be required to visit the bank or NBFC’s website
-Here, you go to the home loan
-In the home loan section, you can click on the home loan status
-You are usually redirected to a new page where you enter your application number and password
-Once you are in your unique page, you will be given details of the home loan that you have applied for. It will also have three options: ‘accepted’, ‘rejected’, and ‘in process’.
-If the loan is accepted, then you will have to conduct the following . In case it is rejected, you will have to apply for a fresh home loan. However, if it’s still in process, you will have to constantly visit the website or the app to check the status.
-Download the mobile app from the Play Store or the Apple Store
-Once you open the app, enter your details such as your registered mobile number, your application number, etc
-Once inside, you can check the status application by tapping on the button. Do note that this option is available on different sections of each banking or NBFC mobile app.
You can also SMS the bank or the NBFC through your registered mobile number. Of course, each bank and NBFC will have a different number on which you can call or send a text message. Sometimes, you will be given a call back option. If you avail that, a bank representative will call you to tell you the status of your loan application.
You can visit the nearest branch of the bank or NBFC and give the representative your details, following which s/he will share your home loan application status
You get a unique reference number once you apply for a loan. You need the number to check your application status. If you don't have the number, contact your bank or NBFC and share your details, following which you will be given the reference number
You will be required only to share your reference number and your password
Banks and NBFCs consider many factors while processing and approving your home loan application. One of the most important deciding factors is the income of the borrower i.e. higher your income, better the chances of getting a home loan sanction. Candidates with high income are considered low-risk by banks. Furthermore, you will also be checked on your credit score. If your score is above 750, then the bank is more likely to sanction your loan. Other factors that banks take into account is your age. If the borrower is close to retirement, the bank may consider the borrower to be a high risk one. The bank considers the chance of defaulting on the loan in such cases is higher.
While processing your loan, the bank will also look at your spouse’s income, and the number of dependents in the family. If the income of your spouse is high or if there are fewer dependents in the family, the bank is more likely to sanction your loan.
The bank will also check your credit history before granting you the loan. The better your credit history, the higher are your chances for approval. If your credit score is high, you are more likely to get your loan application accepted. If you have existing loans that you are repaying, the bank may reject your claim. In that case you can pay off existing debts before getting a new home loan.
Having a home loan makes you eligible for tax benefits every year. There is an exemption on the repayment of the home loan principal amount under section 80 C of the Income Tax Act. Under this section the borrower will be eligible for a maximum annual tax deduction of Rs1.5 lakh.
The interest paid on home loans is also eligible for deduction under section 24 of the Income Tax Act. You can avail deductions up to Rs 2 lakh of interest paid towards a home loan.
If you have a joint home loan account, you and each of your co-borrower will be is eligible for the above exemptions. The co-borrowers will be eligible for tax exemption up to Rs3.5 lakh—Rs 1.5 lakh on principal and Rs 2 lakh on interest.
Let us assume that you have received a sanction from the bank for a home loan worth Rs30 lakh. This sanction letter is valid for six months and you can choose to begin the disbursement of funds within that time. So your EMI does not start immediately. The bank charges an interest before the EMI payments begin. This is called pre-EMI interest and is charged until the actual EMI kicks in. The pre-EMI interest is generally lower than the EMI you have to pay.
Having a home loan makes you eligible for tax benefits every year. There is an exemption on the repayment of the home loan principal amount under section 80 C of the Income Tax Act. Under this section the borrower will be eligible for a maximum annual tax deduction of Rs1.5 lakh.
Can I get a loan for the entire value of the property/ flat?
No. Banks usually offer loans worth 80 per cent of the project/ property value. They keep a 15-20 per cent buffer to be safe. This 15-20 per cent of the property value is to be paid by the borrower. You can negotiate with the bank to get a loan that is worth 90 per cent of the property value.
There are several reasons for which the bank may reject your loan application. The biggest factor is your credit score. If credit score is poor or below 750, the bank is more likely to reject your loan application. A poor credit history indicates that the person cannot handle credit lines well. Be careful while filling out the application forms. Any mistake in the information provided could lead to your application being rejected.
Yet another reason why banks reject home loan applications is the income status of the applicant. If you don’t have a stable income or if your income levels are gradually going down, the banks may reject your application.
Banks also take into consideration your age while approving a loan. If you are closer to retirement, the bank may reject the loan application.
Don’t apply to too many banks for a home loan. Pick and choose the ones you apply to. Rejections from multiple banks can hamper your credit score and make you a poor candidate for home loans.