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Personal loan
Factors that bank consider before giving us loans
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[QUOTE="Mellorando, post: 206691, member: 37973"] One important thing that you have to understand is that the approval of the loan is not an easy process. Most people do not even know about the things that are required for getting the bank to approve the home loan. Banks have the freedom of rejecting home loan applications because of several factors, depending on the credit history, the credit score, the home builder’s reputation, the location of a particular property, and most importantly, the relationship that you share with the bank. Few banks have the option of internal scores, which are used for understanding whether a particular person is eligible for the home loan. Given below is a list of the factors that banks prefer looking at before approving home loans: 1. Credit history Banks prefer lending money to people who are known to have good financial habits. Credit scores are responsible for telling several things about the current financial health. Whether you are paying your EMI on time or you have defaulted can easily be checked through the credit report. This credit report is normally maintained by several bureaus. Generally, a credit score of 800 is considered to be the best score. However, if the score is less than 300, the application for a home loan can be rejected. You can get your loan approved in a fast and hassle-free manner if your credit score is great. Also, a good credit score means that the lender will pass your home loan without any extra doubts. 2. Occupation Certain occupations are preferred by the banks. For example, government employees are given priorities because the job that they have is stable. After the government employees, banks prefer those people who are associated with blue-chip doctors and companies. Next, lawyers, engineers, as well as accountants are preferred. Also, people who are working in private companies as well as are self-employed get low scores. Occupation is undoubtedly one significant factor that is considered when a home loan is upraised. This factor is important because the repayment capacity is dependent on the amount that a particular person is bringing home. For instance, if a particular person is associated with an organization that does not have a great history of clearing salaries as well as dues to employees, the home loan application will be weakened. Similarly, any borrower who is switching jobs often is giving a negative impression to the bank. Also, all the applications will be treated in an equal manner, whether the applications are of government employees or employees associated with private sectors. 3.Age Age is an important factor; which banks consider before giving home loans. People belonging to the age group of 30 and 50 years are preferred by banks because they are financially stable in comparison to the other age groups. Also, they have several years left in their job, which will help them to repay the loans. Similarly, people who have already crossed the age of 60 are responsible for faring the worst when it comes to the internal scores of the banks. [/QUOTE]
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