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I have applied PAL (Pre approved home loan ) for a bank. Bank have approved the amount what I needed. When I confirmed with them, they assured they have check my cibil and credibility before approving loan.

But my credibility have one another story. I have a previous home loan in my name which EMI is paid by my family, So now I have a figure something like this

My monthly income = 80K+  ( In hand 70K (salary sheet) - 5K monthly savings in mutual fund/policy = 65 actually )
Previous EMI      = 19K
Wanted loan       = 3000K
Duration          = 20 Yr

One of my friend tell me that bank only did sales trick to convince me in PAL. Actually I did not eligible for 3000K loan but at max 2200K. If he could be correct ? If Bank can ignore previous loans/credits during PAL check ?

I am belonging to Delhi, India.

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  • If you don't like this bank's offer, your best recourse is to try another bank.
    – keshlam
    Commented Aug 3, 2015 at 13:05
  • @keshlam actually I am ok with bank's current offer. My worry is if bank will refuse to give current offered loan amount on basis of previous loan which I expected them to consider during PAL checking. Commented Aug 3, 2015 at 13:43
  • Credibility refers to hoe much they believe your statements are accurate. Try "credit-worthiness." (Unless this is another case where Indian English gives a word a very different meaning than other dialects do.)
    – keshlam
    Commented Aug 4, 2015 at 2:28

1 Answer 1

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In general the Pre-approved loans are just a dip stick, i.e. a broad level indicator that you met in general the eligibility criteria for the said loan. It is not an confirmed offer that the Bank may or may not grant the loan when all paperwork is done.

Different banks use different yard sticks for lending, how did you friend arrive at the 2200K number?

The approval is also a factor of if there are any tie-up by the Bank with the Builder.

Edit:
Varies from Bank to Bank, general thumb of rule is overall loan in the range of 36 times your gross monthly salary. Overall EMI in the range of 55% of your net monthly salary.

The CIBIL score only gives how responsible you are with credit, i.e. have to missed payments or are very diligent. It is one aspect to determine whether to grant you loan and what rate. Better score, lesser rate. The overall income also plays equal role in terms of determining how much loan to give.

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  • I think, he calculated half of my salary and deduct existing loan emi amt from that that would be almost 22K which may lead to 2200K loan amount in 20Yr. Commented Aug 3, 2015 at 8:20
  • I am aware bank can even refuse loan after recheck cibil and other credits. But my worry is that if bank did not consider/check previous loan at all during PAL and refuse/offer less loan amount on basis of previous loan EMI when actually applied ? Commented Aug 3, 2015 at 8:23
  • The only way to know for sure is to ask them, or to apply.
    – keshlam
    Commented Aug 3, 2015 at 14:19
  • @keshlam Well I ask them they and they replied that is is actual amount they can loan unless my credit score go down in coming months. But if they only doing sales gimmick, then yes only option look like to apply and see :( Commented Aug 4, 2015 at 5:13

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