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30 December 2010

Home Loans and Credit Card Linked Importance of Clear Credit History

With the coming of credit card it has become much easier to purchase goods conveniently and immediately. This card is termed as the ’magic card’ as this gives consumers power of spending at their own free will and paying for this later at the end of the month. Easy availability of home loans is making many opt for the offer of taking a loan to purchase a house. Credit card history is also one of the criteria’s to be considered while fulfilling the requirements for approval of the home loan.
Home Loans simplified Facts

How does this relate to the new loan? The lender be it government nationalized banks or a private money lending institution goes through your past history of credit card usage. If the client has spent more than his limits then it is considered as negative point. If the client has spent 70 to 80% of the amount then also it is considered to be under scrutiny. Mostly the lenders are happy to lend to the client who rarely uses credit card but owns one for financial safety measures. This shows that the applier for the home loan is financially secure and can manage in his or her salary the monthly expenses.
The remaining amount or saving monthly needs to be a considerable amount since the cost of the house nowadays in substantial and one may have to give away 25 to 40% or our salary as EMI for repayment of the loan. If the client is a defaulter and has not repaid the credit amount on time then this is considered as a negative point from the lender. Thus while applying for a home loan one has to consider their credit card history as the lender goes through these documents before approving the home loan.
All the Best from Rizwana!
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