5 Ways to Get a Home Loan Approved by the Bank
Which bank's loan is easiest to get approved? Each bank has different loan approval criteria. Preparing yourself before applying for a loan is crucial. Let's look at how to prepare for a home/condo loan to increase your chances of approval before making a decision.
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1. Calculate your financial status and borrowing capacity.
Banks approve housing loans based on your salary/income, length of employment, supplementary income, and existing debt. Typically, banks offer loan amounts of 30-50 times your net income (or more than 50 times in some cases).
Which bank's loan is easiest to get approved depends on your job stability, debt repayment discipline, financial history, and the proportion and ability to repay the loan. The loan repayment ratio should not exceed 40% of your salary and should be at a level the bank considers comfortable for you.
Example: Salary of 20,000 baht, monthly payment of approximately 8,000 baht, maximum loan amount of approximately 1.3 million baht.
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2. Check your credit score; avoid blacklists.
A credit bureau is a collection of records of loan and credit card payments from financial institutions. If payments are not made on time, the National Credit Bureau will record the information, often referred to as having a bad credit history or being blacklisted. This affects loan applications because it indicates a lack of financial discipline and inability to repay, leading banks to lose confidence and ultimately reject the loan. Therefore, in addition to checking which banks offer easy loan approval, don't forget to check your credit bureau report. This can now be done independently, and it's crucial to clear all existing debts before applying for a loan.
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3. Check Bank Promotions
Each bank offers different interest rates and fees. You should check and calculate the value of each offer and promotion, such as the percentage of the loan amount based on the appraised or purchase price, interest rate, fees, loan term, and monthly payment.
Initially, calculate which offer best suits your needs and apply for home loan loans from at least three banks.
Loan approval depends on the loan amount and your ability to repay. To increase your chances of quick approval, it's recommended to apply to the financial institution or bank where you receive your salary or have a regular bank account. Because it helps build credibility for your income, demonstrates job stability, and since you're already a customer of the bank, it further increases your chances of loan approval.
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4. Prepare all necessary loan application documents.
Preparing all supporting documents for your loan application will not only shorten the approval time but also significantly increase your chances of approval. Generally, loan application documents are divided into three groups:
Personal Information Documents
• Copy of your National ID card or government employee ID card
• Copy of your house registration and spouse's house registration (if applicable)
Income Documents
For individuals with regular income:
• Salary slip or employment certificate (original)
• Copy of bank statement for the past 6 months
• Copy of withholding tax certificate (Form 50 Twi)
For individuals with self-employment:
• Copy of business registration certificate/business license
• Copy of shareholder list including the borrower/co-borrower
• Copy of bank statement for the past 6 months (both in the name of the individual and the business)
Collateral Documents
• Copy of the sales agreement • Proof of down payment (if any)
• Copy of land title deed or copy of ownership certificate
• In case of co-borrowers, proof of identity and income of each co-borrower are required.
• In case of business loans, a business plan must also be submitted.
The ease or difficulty of loan approval at a bank will depend on these documents. You can inquire with bank staff beforehand so that you don't miss anything when you arrive at the bank, which would require you to return home to resubmit it. This not only wastes time but also prolongs the approval process.
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5. Joint borrowing increases the chances of easier home loan approval
Joint borrowing is another way to make loan approval easier, even with income limitations that might affect the loan amount you're aiming for. Under the terms and conditions, joint borrowers are allowed to borrow with parents, siblings (same surname), spouses (registered or unregistered), and LGBTQ couples, who must provide documentation proving they are living together. Joint borrowing is another factor banks consider when evaluating loan approval.
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However, each bank has different requirements, rules, and conditions. Which bank approves loans easily? Initially, you should study and compare the criteria for evaluating borrower eligibility, such as income, ability to repay, age, and occupation, and update the interest rates on home loans from all banks to choose the bank that offers the best deal for your needs.
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Thank you for the helpful information from DD-Property.
