Assuming that you are wanting to apply for a home loan, the bank statement should be in your checklist of the documents needed for a home loan. Why bank statement is needed for a home loan? How critical is your Bank Statement and what information lender intend to extract out of it? Following are the facts that lenders look for while inspecting your bank statement:
Cheque Dishonoring: With the Bank charges charged to you account on account of cheque dishonoring enables the lender to access your financial discipline. In case of higher instances of cheque dishonor, the same projects your incapacity to pay off your liability and affects your credibility. An person who issues checks without keeping a sufficient equilibrium in his record hence bringing about more number of cheque without maintaining an adequate balance in his account thus resulting in more number of cheque dishonors has slim chances of getting a loan. Hence, a bank statement is required for a home loan.
Information Regarding Other Loan-if any: With the existence of any other loan, your extent of getting higher amount of next loan gets lessened. In case the consistent amount is debited from your account every month that shows your liability towards another loan (s) and the lender assessed your capacity of repaying the current loan by accessing your total liability minus the amount you are liable to pay for the previous loan.
Balance of your Account: With the pattern of payments by means of credit cards and online transactions, the lender can compute your consumption vs. income as all such transactions get reflected in your bank statement. The one will high amount of debits on account of such expenses compared to their income, have fairly low chances of securing a home loan as this reflects your habits of overspending and your incapacity to repay loans in near future.
The Nature of Activity: Lastly, a bank statement is needed for a home loan because it plays a critical part in verifying the level of exercises of a business in the case of self-employed and the salary quoted against the amount mentioned in the loan application. Assuming there is a gigantic inflow of funds around the time when the loan is applied for, it arises a suspicion that the same activity is being with a view to obtaining eligibility of loan.
On account of a veritable salaried representative, a steady amount gets credited as income each month and gets reflected in the bank statement. But in case if the amount has significant variations, then the same get scrutinized by the lender before lending a loan. Similarly, in the case of self-employed, receipts reflected in the bank statement are compared with the amount declared in income tax returns to access the credibility of the borrower.
So, by now you must be aware of why a bank statement is required for a home loan. Whenever you apply for a home loan, make sure your bank statement is liberated from the flaws as mentioned above else chances of rejection of your home loan will get substantially high.