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Buying a home is everyone’s dream. It is something that everyone desires and have plans or ideas for their dream home. Before the price of land was comparatively lesser, where a person would work and save money to pay the full amount for a house without taking any loan.
Nowadays, the cost of houses is very high that not many can pay the full cost of a house without home loans from banks like Punjab National Bank (PNB). The Government also understanding that the cost of homes and the loan taken is a long-term liability, has provided tax benefits and subsidized housing through schemes like PMAY which makes housing affordable.
Over the years with most lenders have embraced digital technology making applying for a home loan quite easy.
Home loans are an investment that happen for long term and huge amount is invested on an individual with the guarantee he/she will pay back the home loan with interest.
This is the reason why banks like Punjab National Bank (PNB) have strict eligibility criteria is to make sure they are providing funds to the right person and to make sure the person does not feel burdened in paying their loan EMI and not have enough funds for their daily expenses.
There are certain factors or criteria stipulated by banks which needs to be satisfied before loan applications are approved. They are
Factors Affecting Punjab National Bank (PNB) home loan Eligibility Criteria
One of the first and foremost thing a home loan applicant must do is his/her check credit score, there are also multiple options to create a credit profile on the internet. A credit profile is one that along with your score keeps track of your credit health while giving a view of your history with credit via past accounts, past payments and your eligibility.
Any bank, when it gets a loan or credit card application will pull out the individuals credit score/ credit profile which is available with the number of credit bureaus operating in the country.
The credit score is the accumulated score based on how regular you were in paying back your loan or credit card bill. This is the very first step taken by Punjab National Bank (PNB) when screening your application. If your credit score is too low, then there is a good chance that your loan might be rejected.
A credit report contains the complete history of your loans or credit cards utilized by you, how regular you were in paying back your credit, late payments if any etc. If any applicant has the terms “settled” or “written of” against any credit account in the past, your loan application will be rejected as these terms indicate that you have defaulted on your loan and that the lender has settled the account realizing that the individual will not pay back the balance.
Similarly, if there are any discrepancies like your date of birth is different from what is on your application then it is grounds for rejection of Home loan. It is best to rectify any such discrepancies well in advance to avoid your Punjab National Bank (PNB) home loan being rejected.
Salary is a very important criterion for a home loan. If you do not match the salary criteria stipulated by Punjab National Bank (PNB) your application will be rejected.
There is also the other scenario where though you have higher income your application might have been rejected. This is because you might have lower disposable income which might not satisfy the loan EMI to salary balance ratio. That is, you do not have enough salary balance after paying your monthly EMI.
If you are applying for home loan immediately after joining a new job your application will be rejected. Banks expect any home loan applicant to be in a stable job, which will not be the case if you are new to the company which in turn means you are a risk. It is best to wait at least 6 months to a year in the new job before applying for a home loan.
Not in lender list of approved employers
You might be working in a company which is not in the list of approved employers by banks. In such cases the banks feel that your job is not secure and not reliable to pay back the loan amount. Investigate banks/NBFC that have your company listed to make sure that your application is not rejected and get good terms on your loan.
The property has legal problem
When applying for a home loan all the original documents pertaining to the property must be submitted to Punjab National Bank (PNB). This is because your property acts as the collateral for the home loan. If there is not proper documentation or if the property is under some legal action, then the loan will be rejected.
As a precaution it is best to verify all the documents and property details before purchasing. You can also visit the sub-registrar’s office or the CMDA to make sure there is no problem with the property legally or if it falls under any Government plan.
Co-applicant has poor credit score
In today’s scenario most home loan applicant goes for joint applications to reduce the burden of EMI. Even though taking a joint home loan has its own advantage it can also be a cause for the application to be rejected if your co-borrower’s credit score is low. This is because the loan amount and EMI will be decided based on the combined profile of all the applicants. So, if one applicant has low credit score it will bring down the overall score of the group.
High level of debt or is already a loan guarantor
Home loans being a high value investment, also means that the EMI each month will be high. If an applicant already has debts that need to be repaid, then the loan application might be rejected.
Similarly, if the applicant is already acting as a guarantor for another loan then there is a risk that the other person might not pay their loan and will fall on the applicant who will have to pay the dues as a guarantor. This is also a reason for Punjab National Bank (PNB) home loan rejection.
Frequent credit enquiry
If a person applies for credit multiple times within a very short period, you will look like you do not manage finances properly and is always looking for credit as you over spend. This shows, the bank that you are unreliable, and the home loan application might be rejected.
Important documents to be submitted while applying for home loan with Punjab National Bank (PNB)
In India most banks provide the following types of home loan
Home Purchase Loans
Commonly known as home loan or housing loan are provided for buying houses or apartments. Banks usually offer 80 to 85% of the market value of the property as loan. They are available for various tenure periods and with fixed and floating interest rates. This can be used for purchasing new homes or old homes which have entered the real estate market as resale.
Land Purchase Loans
This type of loan is provided for the purchase of land or empty plot for residential activity, construction or investment purpose. This loan cannot be used for buying any agricultural plot of land. Unlike home loans where the loan amount provided is about 80 to 85% of the price of the property, land purchase loans are offered only up to 70% of the cost of the land.
Home Construction Loan
Home construction loans are provided for the sole purpose of constructing a home on an already available piece of land. The land can be an empty plot or demolishing and existing house and building a new one in its place. The loan amount provided for this is normally 85% to 90% of the construction cost.
Home Improvement Loans
These loans help the borrower with all home renovation or improvement work. They are extended towards all construction and renovation work. This could include paint job, new flooring work, plumbing or exterior elevation works are all covered under home improvement loans.
Home expansion loans
These are loans provided to the borrower for expanding their existing home. This includes expanding a single room, adding additional rooms to building a new floor above existing house. These projects could vary from Rs. 20,000 to more than Rs.10 lakhs based on the project.
Your Punjab National Bank (PNB) home loan can be repaid in following three ways.
Standing Instruction (SI): If you are an existing account holder with Punjab National Bank (PNB), Standing Instruction is the best mode of repayment. Your EMI amount will be debited automatically at the end of the monthly cycle from the Punjab National Bank (PNB) account you specify.
Electronic Clearing Service (ECS): This mode can be used if you have a non-Punjab National Bank (PNB) account and would like your EMIs to be debited automatically at the end of the monthly cycle from this account.
Post-Dated Cheques (PDCs): You can submit post-dated EMI cheques from a non-Punjab National Bank (PNB) account at your nearest Punjab National Bank (PNB) Loan Centre. A fresh set of PDCs will have to be submitted in a timely manner. Please note Post Dated Cheques will be collected non-ECS locations only.
It is recommended that you opt for either the SI or ECS mode of payment for faster and less prone to error than the use of PDCs.
Before a person applies for an Punjab National Bank (PNB) Home loan it is best to do an eligibility check which is available on the Punjab National Bank (PNB) website. This way your credit score will not be affected as the bank will only soft pull your credit score and compares with other internal criteria to make sure you are eligible.
Home Loan EMI Calculator
To make life easy for customers and know exactly how much they need to pay every month customers can make use of the CreditMantri Home Loan EMI calculator.
The importance of this is that customers will know how much EMI they will have to pay based on their loan requirement. This helps them to plan far ahead.
1. How can I get Punjab National Bank (PNB) home loan?
You can apply for an Punjab National Bank (PNB) home loan on their website or visiting the nearest branch.
2. How do you increase Punjab National Bank (PNB) home loan limit?
If you have a good credit score, salary, working in a very good company with nil or very little debt you can negotiate for better loan amount with the bank. You can also co-borrow the loan in which case the combined salary can get you a better loan amount. The last option is applying for a top up loan which with good standing with bank and record of proper payment of EMI is attainable.
3. How to Pay Punjab National Bank (PNB) home loan Bill Payment?
You can pay your Punjab National Bank (PNB) Home Loan through Standing Instruction, Electronic Clearing Service, Post-Dated Cheques.
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