Home Loan Tips: Do not make this mistake in the case of a home loan...

Nowadays, it has become very easy for people to buy a house due to home loans. People can easily arrange money through home loans and they buy their favorite house. However, many times people take a large amount from the bank as a home loan to buy an expensive house. Later, there is a problem in paying its EMI and people also become defaulters. Then the bank and recovery agents start chasing them to recover the loan. If you face any such problem, do not make a mistake because if you make this decision to get rid of the loan, then for the next 7 years, such a stamp will be put on your CIBIL report that it will become difficult to take a loan from the bank again.

Do not take this decision.
Many times people settle the loan to get rid of the bank and recovery agent. It is also called OTS i.e. Time Settlement. The settled loan is a middle way, on which both the borrower and the bank agree. You should decide on loan settlement very carefully because it can spoil your CIBIL record.

CIBIL score falls
With loan settlement, you get rid of the bank and recovery agents, but your CIBIL record gets spoiled. After settlement, Settled is written in the credit history. This can reduce the credit score by 50 to 100 points or even more. If the loan taker settles more than one credit account, then the credit score can decrease even more.

The record will be spoiled for 7 years.
The problem is that in the account status section of the credit report, it can be mentioned for the next 7 years that you have settled your loan. In such a situation, it may be difficult for you to take a loan in the coming years. You can also be blacklisted by the bank.

Why does settlement spoil the CIBIL report?
Actually, at the time of loan settlement, the defaulter has to pay the entire outstanding principal amount, but the interest amount as well as penalty and other charges can be partially or fully waived off. In such a situation, on settlement, the bank does not get the full amount which the borrower has to return along with the interest during his loan tenure. Therefore, the bank writes 'Settled' in its CIBIL report.

Take loan wisely
Experts believe that to avoid the situation of becoming a defaulter, you should decide while taking a loan by keeping in mind the loan amount, tenure, and household budget. Try to make as much down payment as possible while buying a house. This will prevent you from taking a lot of loans. If you make a down payment of 30 to 40 percent, it will be very easy for you. Apart from this, the cost of the house you are buying should not be more than three times your total annual income. Your EMI should not be more than 30 percent of your income. If you keep these things in mind, you will be able to repay the home loan easily after taking it.