• Home Loans can thus be availed at an attractive rate from the banks and also other financial institutions. However, it is, important to analyze the creditworthiness when one plans to apply for a home loan.
  • The application of home loan that one plans to submit in any bank which would be viewed on the number of parameters out of which the most important one is the creditworthiness.
  • Statistics also prove that the rejection rate on home loans has now jumped to 30%.
  • However, some easily sail through the home loan process and many of them struggle their way out due to the few mistakes that they make in the initial screening period.

Home loan approval

Bank Statement

  • The borrower’s bank statement is important while one applies for a home loan.
  • It gives a clear view of the income and the expenses which help the bank in assisting the creditworthiness which is to repay with the interest on the borrowings.
  • The borrower needs to provide the banker or the relationship manager with the most recent bank statement of the account.
  • He must highlight all the non-recurring expenses which are reflected in the bank statement to the banker.
  • He should make sure that he does not have any history of bounced cheques or skipped EMIs.

Elaborate your Non-Liquid Assets

  • Banks would be more than willing to give the loan if they are assured that one would be able to repay the money.
  • While the borrower discusses his sources of income with the banker, he should mention:
    • His spouse’s salary (if any), or
    • Any immovable asset in his name
    • His parent’s earnings (in case they are still in service or business)
    • His social standing etc.

Building Long-Term Relation with the Bank

  • Banks give an extra weightage to the consumers who are willing to create a long-term relationship with them.
  • So while discussing the home loan mentions that you are willing to open kids’ accounts with the bank or wish to open a locker with them.
  • Even you can mention about investing in
    • The fixed deposits
    • Mutual funds, or
    • The insurance policies.
  • This would also not just ensure that they can cross-sell the products to the borrower in the future. Also, provide them with the assets as security in case if one defaults in the repayment.

Your Credit History

  • If one does not have any ongoing loan or a credit card outstanding in the name than the borrower should always highlight his credit history.
  • If the borrower has any previous status of the repayment of the loan then the borrower may produce that as evidence of the creditworthiness and also to press on the fact that one has not been a defaulter.
  • This would also be reflected in the CIBIL Report making the bank dual sure.
  • One may produce the CIBIL Report of the parents or spouse for the purpose.


  • The guarantor also has an important role to play in the home loan application. The borrower must arrange a guarantor for himself.
  • If the guarantor that the borrower has chosen also has a long-term relationship with the bank to which the borrower is applying would thus serve to be the icing on the cake.
  • If one highlights the:
    • Creditworthiness
    • Income
    • Credit history etc of the guarantor as well that would thus surely work in his favor. In various banks, the clause of mentioning a guarantor isn’t compulsory it comes in to play only when the stand-alone creditability is somehow weak or one has high liabilities in his name.

All which the borrower needs to do is to step in the shoes of the lender. To avail of a green signal for the home loan, it is thus important for the borrower to have a clear view of the criteria that are laid by the lender and how one can effectively and efficiently meet them.