Contractorbhai team : We often talk when to take Loans. Let’s know when not to take Loans for those looking for Home Improvement Loans?
Loan Expert : If the Home owner is a salaried individual, he shall check with his income over expense ratio. Also termed as Income to Obligation ratio. If the Income to Obligation ratio is going above 65%, then we suggest such home owners to not look opt for loan.
As far as these loans are concerned, finance institute wants to understand percentage of your gross income that will be spent on recurring loan repayments.
Loan giving company wants to ensure that you generate enough income each month to be able to easily repay the loan EMIs.
Every finance company has criteria of particular amount as the minimum income to decide if personal loan can be approved.
Also we suggest home owners to avoid overdoing inquiries for loan.
For taking a loan the utmost parameter is your CIBIL score, your Credit History. All PAN card holders have a Credit History. This is irrespective of whether you use Credit Card or not.
Well very few people know, that if you are inquiring form multiple banks, every bank will check your credit score. For every inquiry, 3 points are deducted.
Secondly, every bank have a norm to pass X-inquiries every 6 months, if the inquiry limit gets burst, even if your are the Credit worthy customer, home owner will have a tough time getting a loan.
Therefore we advise all Home Owners to avoid too much inquiring for Loan. Even if a home owner visits a bank’s or financial institute website, fills a form, it is counted as an inquiry.
So before even applying for loan home owners needs be well informed himself. And most importantly he shall be sure for when he truly needs the cash then. And how much Cash he needs. Also how much will he need for another month.
There is also a limit on number of loans a home owner is running. Say a client comes to a bank for loan, a bank / any Finance Institution will check not only his CIBIL score but also the number of loans he is running. If it is found to be greater than 2-3 and the client wants a Car Loan or Home Loan, then it dicey for bank to approve the same. The bank or Finance Institution can slash down the Loan. Say if a bank can or he want 10 Lakhs loan, bank slashes it down to 7 lakhs.