Availing housing finance is a convenience that can help you purchase your dream house. But before you apply for a Home Loan, thorough research and planning are essential, especially since it is a long-term financial commitment involving substantial funds.
However, despite considering every facet, there could be some hurdles along the way such as getting a lesser-than-expected sanctioned amount, assigning of lower property value or even rejection of your loan application. Consequently, loan rejections may harm your credit score while a rise in EMI outgo could potentially lead to loan defaults.
Seven Challenges that One May Face While Availing of a Home Loan
To ensure a hassle-free loan journey, avoid these common Home Loan problems that applicants generally face:
1. Rejection of Application
One of the main problems faced by Home Loan borrowers is rejection at the first stage. This could happen due to discrepancies in the borrower’s qualifications that may not match the lender’s parameters such as age requirements, financial standing, documentation and so on. Hence, confirm the eligibility criteria and other details before you submit your application. Also, provide accurate information along with the supporting paperwork as requested.
2. A Higher Interest Outgo
When lenders promise lower EMIs, make sure you understand the implications. A lower EMI per month may translate into a higher interest outgo making your loan expensive. Therefore, check and compare the interest amount for different EMIs using an online Home Loan EMI Calculator and negotiate for the best possible rates. Further, Home Loans are offered at either a fixed or floating interest rate. Calculate both types of interest for feasibility before you select the ideal loan.
Additional Read: Differences Between Fixed and Floating Interest Rates
3. Insufficient Down Payment
As per RBI guidelines, lenders can finance up to 75% - 90% of the property price. They cannot fund its entire value. Borrowers need to pay the remaining 10% - 25% as a down payment for the property.
The table below shows how lenders usually grant loans:
Loan amount | Loan eligibility as per property price | Minimum down payment needed |
---|---|---|
Up to Rs.30 Lakh* | Up to 90% of the property value | 10% of the property value |
Between Rs.30 Lakh – Rs.75 Lakh* | Up to 80% of the property value | 20% of the property value |
Above Rs.75 Lakh* | Up to 75% of the property value | 25% of the property value |
For instance, if you wish to buy a house worth Rs.60 lakh, you can secure funds up to Rs.48 Lakh. The balance amount, that is, Rs.12 Lakh has to be paid as a down payment from your own savings pool. As lending norms vary across lenders, check these requirements beforehand and arrange for the necessary funds so that you don’t fall short.
4. Issues Related to Legal and Technical Evaluation
Any property you seek to buy with a housing loan undergoes rigorous legal and technical assessments. Certified lawyers visit the property and examine the legal documents like the sale deed, property chain, property map, etc. for authenticity. If they find anything suspicious, a report is issued to the effect, based on which, lenders may reject your loan application.
Lenders also carry out technical verification of the property with the help of structural engineers. They assess the building construction in line with the property map. In case of deviations or other issues, they may reduce its valuation which will impact your principal amount; and you may have to contend with a lower loan amount at higher rates of interest.
You can get the property evaluated by experts before you apply to establish its market value and also estimate the loan amount that you could obtain.
5. Failure to Meet the FOIR
A fixed obligation to income ratio (FOIR) denotes the proportion of EMIs to the net monthly income. Lenders will be reluctant to extend loans if you have an unfavourable FOIR. They apply FOIR based on your earnings. High-salaried applicants can be approved for a loan even if the EMI comprises 50% - 60% of their income in hand. Whereas, those with a modest salary should ensure that the EMI does not exceed 30% - 40% of their earnings.
6. Processing Fee Complications
Every loan applicant has to pay a processing fee of up to 4% of the loan amount + GST as applicable. While some lenders include legal and technical costs in their processing fees, others may not do so. Be extremely cautious about what such fees and other additional loan charges entail to factor them into your total credit cost.
Additional Read: Types of Housing Loan Charges
7. Problems with Title Deeds and NOC Documentation
A No Objection Certificate (NOC) from local authorities is necessary for the commencement of any building construction. NOC papers and title deeds must be furnished as per the lender’s prescribed format for easier loan processing. Incorrect paperwork, errors in property details, forged documents and the like can prove to be a challenge during the verification process. Hence, ensure proper documentation before you submit them.
Preparing for Your Homeownership Journey
To avoid any roadblocks during your loan approval, bear in mind the common problems with Home Loans that borrowers normally face and take preventive measures. Each lender may have their own set of prerequisites that borrowers must fulfil in order to qualify for a housing loan. Look up the various terms and conditions and the current market trends to make informed decisions.
*Terms and conditions apply.
DISCLAIMER:
While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent errors or delays in updating the information. The material contained in this website and on associated web pages, is for reference and general information purposes, and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. Neither Bajaj Housing Finance Limited nor any of its agents/associates/affiliates shall be liable for any act or omission of the Users relying on the information contained on this website and on associated web pages. In case any inconsistencies are observed, please click on contact information.
Trending Articles

loan+against+property Loan Against Property
[N][T][T][N][T]
How to Pay MCD Property Tax in Delhi2025-04-21 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Tax Benefits on Mortgage Loans: What You Need to Know2025-04-21 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Apply for GPRA Accommodation via eSampada and eAwas2025-04-21 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Understanding the SVAMITVA Scheme: A New Era of Property Ownership in Rural India2025-04-21 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Why Property is More Than Just an Asset: 4 Ways It Can Power Your Finances2025-04-21 | 2 min

[N][T][T][N][T]
Home Loan Insurance Benefits for New Home Buyers2025-04-21 | 6 min

home+loan Home Loan
[N][T][T][N][T]
Stamp Duty and Property Registration Charges in Kerala: A Comprehensive Guide2025-04-11 | 2 min

home+loan Home Loan
[N][T][T][N][T]
MPIGR Madhya Pradesh: A Guide to Property Registration and SAMPADA Services2025-04-14 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Consider These Factors Before Foreclosing Your Home Loan2024-04-16 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Top Things to Keep Track of While Doing a Home Loan Balance Transfer2022-12-18 | 7 min

home+loan Home Loan
[N][T][T][N][T]
Smart Things to Consider Before You Apply for a Home Loan2022-12-14 | 5 min

tax Tax
[N][T][T][N][T]
How Much Tax Can be Saved Under Sections 80C, 80D, and 80G?2024-05-15 | 5 min

tax Tax
[N][T][T][N][T]
Tax Benefits on Home Loans for Self-Employed Individuals: What You Need to Know2024-06-07 | 4 min

cibil Cibil
[N][T][T][N][T]
How to Increase Your CIBIL Score Above 800: 7 Proven Methods2023-01-24 | 4 min

home+loan Home Loan
[N][T][T][N][T]
10 Smart Steps for Effective Home Loan Management2024-02-16 | 5 min

tax Tax
[N][T][T][N][T]
Should You Get a Home Loan to Save Your Taxes?2024-02-01 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Should You Take a Home Loan Even If You Have Enough Money to Buy a House?2024-01-30 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Short vs. Long Loan Against Property Tenor - Which Is Better?2024-05-07 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Section 80EE: Claim Deductions on the Home Loan Interest Paid2024-04-25 | 6 min

cibil Cibil
[N][T][T][N][T]
How can I Remove Loan Inquiry from CIBIL Credit Report2024-01-22 | 5 min

[N][T][T][N][T]
Tips to Manage Loan Against Property Repayments Efficiently2024-02-21 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Differences Between Fixed and Floating Interest Rates2024-05-15 | 2 min

home+loan Home Loan
[N][T][T][N][T]
What Do You Need to Know About Home Loan Foreclosure?2023-03-23 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Monthly Reducing Balance Method for Home Loan Interest2025-02-25 | 3 min

[N][T][T][N][T]
Everything You Need to Know About Home Loan Part-Prepayment2024-12-18 | 5 min

home+loan Home Loan
[N][T][T][N][T]
What is the Ideal Age to Buy a House?2025-03-19 | 2 min

tax Tax
[N][T][T][N][T]
Top 5 Tax Benefits and Other Advantages of a Joint Home Loan2024-07-10 | 8 min

home+loan Home Loan
[N][T][T][N][T]
Complete Guide to Securing a Attractive Interest on Home Loans2024-01-23 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Pick the Best Home Loan Tenure that Suits Your Budget2023-06-29 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Check Housing Loan Eligibility with Home Loan Eligibility Calculator2023-07-12 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Everything You Need to Know About Top-up Loans on a Home Loan2024-04-09 | 6 min

home+loan Home Loan
[N][T][T][N][T]
A Step-by-Step Guide to Home Loan Balance Transfer Application2024-07-09 | 6 min

cibil Cibil
[N][T][T][N][T]
High CIBIL Score Helps Low-Interest Rate Loans2024-06-10 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Get a Home Loan Without Visiting Branch: A Step-by-Step Guide2024-03-20 | 4 min

cibil Cibil
[N][T][T][N][T]
Impact of Late Payment on CIBIL Score?2024-03-08 | 6 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Balance Transfer: Benefits, Eligibility, and More2024-05-15 | 3 Min

[N][T][T][N][T]
7 Benefits of Taking a Home Loan in India2024-06-19 | 3 min

home+loan Home Loan
[N][T][T][N][T]
An Essential Guide to Refinancing a Home Loan2024-04-22 | 5 Min

cibil Cibil
[N][T][T][N][T]
What Factors Do Not Affect Credit Scores?2024-02-28 | 7 min

home+loan Home Loan
[N][T][T][N][T]
Tips to Secure Quick Home Loan Approval2025-03-03 | 2 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Loan Against Residential Property: A Smart Financing Solution2025-03-10 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Loan Against Agricultural Land: Unlock the Value of Your Property2025-03-07 | 6 min

cibil Cibil
[N][T][T][N][T]
Know How Mortgage Loan Affect Your CIBIL Score2024-02-05 | 5 Min

loan+against+property Loan Against Property
[N][T][T][N][T]
Understanding the Fees and Charges on Your Loan Against Property2024-04-10 | 6 min

cibil Cibil
[N][T][T][N][T]
What are the Types CIBIL Errors & How to Correct Them?2023-11-22 | 6 min

home+loan Home Loan
[N][T][T][N][T]
Home Loans for Salaried Employees: Eligibility, Documents, and Application Process2025-03-18 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Property Mortgage Loan: A Smart Financing Option for Businesses2025-03-10 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Calculate Your Home Loan Eligibility2025-03-05 | 3 min

[N][T][T][N][T]
Loan Against a Shop- Commercial Property Loans2024-12-18 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Benefits of a Home Loan2023-02-20 | 4 min

loan+against+property Loan Against Property
[N][T][T][N][T]
3 Different Loan Against Property Types You Should Know About2024-02-13 | 5 Min

[N][T][T][N][T]
Home Loan for Pensioners: Eligibility and Benefits2025-03-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
5 Great Ways Women Can Benefit from Taking a Housing Loan2024-01-16 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan for Self-Employed Individuals2025-03-03 | 2 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Why Professional Loans Against Property Are Financially Beneficial?2023-03-03 | 5 min

cibil Cibil
[N][T][T][N][T]
Reasons Why Your CIBIL Score Is Going Down2024-04-10 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Reasons Why a Housing Loan Application May Be Rejected2024-02-14 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
6 Reasons Why Collateral Matters When Applying for a Loan Against Property2023-02-27 | 5 min

cibil Cibil
[N][T][T][N][T]
Five Reasons Why a Bad Credit Score Could Lead to Loan Rejection2024-01-22 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Refinancing: What, Why, and Things to Remember2024-06-17 | 5 Min

cibil Cibil
[N][T][T][N][T]
Top 10 Reasons For Low CIBIL Score & How To Improve It2024-03-01 | 5 min

[N][T][T][N][T]
What is the Purpose of CIBIL Score?2023-03-25 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Benefits of a Joint Home Loan with your Spouse2023-08-04 | 4 min

home+loan Home Loan
[N][T][T][N][T]
What is the Process to Get Your Home Loan Approved Fast with Bajaj Housing Finance?2024-02-15 | 6 min

cibil Cibil
[N][T][T][N][T]
What is the Procedure to Check your CIBIL Score Rating?2023-03-27 | 4 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Easy Ways to Pick the Right Loan Against Property Tenor2024-05-14 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Pay-off Your Debt with Bajaj Housing Finance Loan Against Property2024-02-14 | 5 min

cibil Cibil
[N][T][T][N][T]
Different Types of Credit Report Errors and How to Fix Them_WC2023-07-11 | 4 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Common Mistakes You Must Avoid Making When Applying for a Loan Against Property2023-02-09 | 5 min

cibil Cibil
[N][T][T][N][T]
Minimum CIBIL Score for Business Loans2023-04-17 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Making Financial Planning Easy with a Home Loan EMI Calculator2023-09-06 | 2 min

cibil Cibil
[N][T][T][N][T]
Reasons to Maintain a Positive Credit Profile and a High CIBIL Score2023-03-01 | 5 min

cibil Cibil
[N][T][T][N][T]
Will a Loan Settlement Ruin My CIBIL Score?2023-03-21 | 4 min

[N][T][T][N][T]
Loan Against Property or A Home Loan: Know What You Need2024-06-11 | 5 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Why Loan Against Property Can be a Good Credit Option for a Startup Business?2023-12-22 | 5 Min

loan+against+property Loan Against Property
[N][T][T][N][T]
Top Benefits of Loan Against Property Over Collateral-free Loans2023-02-23 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Everything You Wanted to Know About Loan Against Property2023-12-16 | 5 Min

home+loan Home Loan
[N][T][T][N][T]
Taking a Home Loan to Buy a Property for Investment? Here Are 5 Points to Consider2023-04-17 | 5 min

home+loan Home Loan
[N][T][T][N][T]
4 Key Benefits of Home Loan Balance Transfer to Bajaj Housing Finance Limited2023-01-09 | 5 min

cibil Cibil
[N][T][T][N][T]
Is a Good CIBIL Score Mandatory for Home Loan Approval?2023-02-17 | 4 min

cibil Cibil
[N][T][T][N][T]
Why is a CIBIL Score Measured Between 300 and 900?2024-05-07 | 4 min

tax Tax
[N][T][T][N][T]
Income Tax Structure in New Regime: New Tax Exemption Limit 20252024-05-08 | 4 min

tax Tax
[N][T][T][N][T]
8 Useful Income Tax Exemptions for Salaried Employees2024-04-18 | 7 min

home+loan Home Loan
[N][T][T][N][T]
What Affects the Interest Rate on Your Home Loan2024-03-13 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Importance of an NOC Letter after Closing Your Home Loan2023-12-14 | 6 min

home+loan Home Loan
[N][T][T][N][T]
The Importance of a Home Loan NOC2023-01-31 | 7 min

home+loan Home Loan
[N][T][T][N][T]
Importance Of a Good Credit Score in The Home Loan Process2023-03-20 | 4 min

home+loan Home Loan
[N][T][T][N][T]
6 Ways to Reduce Your Home Loan Interest2024-03-20 | 4 min

loan+against+property Loan Against Property
[N][T][T][N][T]
How to Apply for a Mortgage Loan?2025-03-05 | 3 min

cibil Cibil
[N][T][T][N][T]
What Does a Zero or Negative Credit Score Mean?2023-02-24 | 4 min

cibil Cibil
[N][T][T][N][T]
Here Is How a Bounced Cheque Can Affect Your CIBIL Score2023-06-06 | 5 min

[N][T][T][N][T]
What are Tranche Disbursement and Tranche EMI in Home Loans?2025-03-14 | 5 min

home+loan Home Loan
[N][T][T][N][T]
What is the Ideal Down Payment for a Home Loan?2024-05-16 | 5 min

home+loan Home Loan
[N][T][T][N][T]
How to Pay Off Your Home Loan Quicker2024-03-11 | 4 Min

home+loan Home Loan
[N][T][T][N][T]
Understanding Loan-to-Value Ratio (LTV) and its Calculation2023-11-28 | 4 Min

cibil Cibil
[N][T][T][N][T]
Does a Name Change Affect Your Credit Score2024-01-07 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Home Loan Settlement: What You Need to Know2025-03-13 | 2 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Understanding the Types of Collateral Properties2024-12-26 | 4 min

[N][T][T][N][T]
Checklist of Documents Required for Home Loan2024-02-07 | 5 min

cibil Cibil
[N][T][T][N][T]
Impact Of a Co-Applicant’s CIBIL Score On Your Home Loan Application2023-01-20 | 4 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Stamp Duty and Property Registration Charges in Gujarat2025-04-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
All You Should Know About Home Loan Disbursement and Sanctioning Process2024-03-19 | 3 Min

home+loan Home Loan
[N][T][T][N][T]
Difference Between Co-owner, Co-borrower, Co-Applicant, and Co-Signer in Home Loan2023-08-31 | 6 min

home+loan Home Loan
[N][T][T][N][T]
What is an NOC Letter and Why is it Important?2024-05-14 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Can I Take a Home Loan and a Personal Loan Together?2024-01-17 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Top 5 Home Loan Benefits for First-time Woman Buyers2024-05-14 | 5 min

tax Tax
[N][T][T][N][T]
10 Useful Income Tax Deductions for FY 2022-232024-02-21 | 6 min

home+loan Home Loan
[N][T][T][N][T]
6 Point Differentiation Between Home Loan Vs Home Construction Loan2023-02-15 | 6 min

home+loan Home Loan
[N][T][T][N][T]
What are the Different Types of Loans Available in India?2024-01-02 | 5 Min

home+loan Home Loan
[N][T][T][N][T]
MCGM Property Tax Mumbai: Online Payment, Calculation, and Exemptions Explained2025-04-14 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Domicile Certificate: Meaning, Documents, and How to Apply Online2025-04-14 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Equitable Mortgage vs Registered Mortgage: Key Differences Explained2025-04-14 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Home Loan Processing Time: What to Expect and How to Prepare2025-04-14 | 3 min

[N][T][T][N][T]
Understanding Important Clauses in Your Home Loan Agreement2025-04-14 | 6 min

[N][T][T][N][T]
Why Now is a Smart Time to Apply for a Home Loan2025-04-14 | 7 min

home+loan Home Loan
[N][T][T][N][T]
Understanding FMB Sketch Online in Tamil Nadu: A Comprehensive Guide2025-04-14 | 3 min

home+loan Home Loan
[N][T][T][N][T]
New Home Loan Subsidy Scheme: A Simple Guide for First-Time Homebuyers2025-04-14 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Buying a House for the First Time? A 5-Step Guide to Help You Plan Smartly2025-04-14 | 2 min

loan+against+property Loan Against Property
[N][T][T][N][T]
How to Change the Bank Account for EMI Payments2025-04-11 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Understanding Mortgage Loan Foreclosure Charges: A Quick Guide