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We all borrow money from our friends, family, relatives or we reach out to Banks/ NBFC’S for funds in the form of a loan. When we borrow from Bank/NBFC we are supposed to repay the debt as EMIs. These EMIs consist of the principal amount as well as the interest part. But what if you fail to repay some of your EMIs or the complete loan amount due to certain circumstances.
Now, it is the time to make this clear what you go through when you are unable to repay your loan. Initially just because banks chase you with repeated calls and messages by offering a home loan, mortgage loans, Instant personal loans, and business loans but it necessarily doesn’t mean that they would grant you the same. Before the lenders decide to move further with the process, they will perform a detailed study of your personal and professional movements. While doing this the financial institutions are not going to keep you relaxed and show their full faith in you. Just because you earn a 5 or 6 figure package or are in your early 20s. Their decision would be influenced by many other factors.
The following are a few of them:
It would be a mistake if you think that it would not matter to banks how many jobs you change in your entire job tenor, even if you are earning a fat package to repay the loan. Frequent changes in your job might give you the tag of being a traveler with an unstable disposition. Most Banks/ NBFC’S would not like to lend money to those who drifts so frequently as it affects your creditworthiness deeply, by putting their investment at risk.
Your regular visits to expensive hotels and expensive lifestyle might be your personal choice and even your investments inexpensive jewelry and apparels too is your own business which you want to maintain. However, banks may not take it positively while taking your home loan proposal to the next level and especially if all the payments are being done through credit cards and the bills are not paid within the time frame. Your debit account statements such as credit card statements or other closed and running loan account statements reflect your tendency of delaying your repayments. This is something that is not at all accepted kindly in the world of finance and banking.
Here again, whether you have your life insurance or you have invested in mutual funds or even if you like spending all your monthly salary in enjoying your life and partying. It will not be the Bank’s/ NBFC’s business even if you prove to them that you are young and earn fine enough to re-pay the loan amount. But when you are borrowing money from the lender and they are ready to grant you a hefty amount without knowing you personally then how you will be spending that money becomes its business. The borrower with good savings will always have an upper hand on the chances of getting a loan issued instead of someone who loves to spend lavishly.
Many of us are happy with living our lives on credit cards or in some or the other form of credit and yes, we are very much disciplined about it. But, do you know that when we apply for a home loan especially when we have an extra debt such as a car loan, an education or a personal loan running, the chances to get a loan to become too thin. Excessive dependence on credit portrays a negative image. Therefore, it is advised to pay off all your small amounts of loans before you plan to borrow a hefty amount of money as a loan such as a home loan.
Leaving everything else aside, no Bank/ NBFC or any other financial institution will be ready to grant a loan to someone who is stuck in the middle of any financial dispute, even it happens because of an insignificant matter. If anyone of your previous lender is following you regarding the non-payment of an insignificant amount then the new one may likely not grant you a required amount.
To avoid finding yourself into the above situations it is of utmost importance to repay your all small or big bills on time.
Also read: what to do when your partner has a bad credit score.
