Loan zone: Norms of loan cancellation

Q.Can I cancel home loan once it is sanctioned but not yet disbursed?
Sanjeev Sharma, Zirakpur
Home loan cancellations can occur for several reasons, including a change in financial circumstances, finding a better loan offer, and a borrower needs to follow specific procedures.
Receiving a sanction letter means your loan has been approved, but it doesn’t automatically mean the loan is disbursed. You can still cancel before disbursement.
Check the terms and conditions in your loan agreement regarding cancellation. There may be specific clauses that outline the process and any penalties involved.
Borrower can usually cancel a loan even after receiving the sanction letter, but it may involve costs. Contact your lender immediately to understand their cancellation process and any associated fees.
Each lender has its own policy on cancellation, so review the loan agreement or contact them for details.
If you have received money already then you must pay it back — the lender must give you 30 days to do this. If you haven’t signed the credit agreement already then you don’t owe anything. But before sending your acceptance, you must go through the entire document carefully and understand.
Submit a Written Request: Prepare a formal written request to cancel the loan. Include your loan application number, personal details, and a clear statement of your intention to cancel. Some lenders may require this for their records.  It’s a good idea to follow up with the bank to ensure your cancellation request has been successfully processed and follow the bank’s instructions for submitting necessary documents.
If you are within the cooling-off period (a specific time frame after loan disbursement), you may be able to cancel the loan without penalty. Canceling a loan application may have a minor impact on your credit score.
Keep copies of all documents related to the loan cancellation process for your records.
Ensure that there are no further transactions related to the loan on your account.
Verify that your credit report reflects the cancellation if applicable.
A sanction letter also mentions the date till which the letter will remain valid and the application for disbursement should be provided before that. Usually, the validity period of a sanction letter is six months. Once the validity period is over, you may have to go through the entire home loan application process again.

Some common reasons for rejection of home loans

  • Your credit score represents your track record and your current creditworthiness. If a home loan applicant’s score is poor, lenders would not have confidence in his repayment capability which will affect his house loan eligibility.
  • Though changing jobs for better prospects or other personal reasons is common, frequent change of jobs creates a sense of uncertainty about you in the lender’s mind. The nature of employment and employer also have a bearing on your prospects of getting a home loan.
  • The age of the property also has a bearing on your chances of availing a loan. If the property is too old, lenders may hesitate to advance the house loan.
  • A home loan applicant may not get a loan in case he has multiple loans and high-interest debt.
  • If you are approaching retirement, you may not get a housing loan as you have insufficient time to repay the loan. If, however, the lender is convinced that you have adequate income to repay the loan before retirement, he may consider giving you a house loan.

    While a particular lender may not consider you to be a suitable customer, some other lender may be willing to advance the housing loan. So do a comparative study before applying for a home loan.

  • The lender can appraise your house loan eligibility based on who you are and what documents you present.
Rs 4 crore luxury home sale in Panchkula sets new benchmark
With its strategic location, superior infrastructure, and the rise of premium integrated townships, Panchkula is experiencing unprecedented demand for high-end residential properties. This growing appeal was recently underscored by a Rs 4 crore transaction for a single independent floor in The Valley Gardens, making it the highest recorded sale of its kind in the Tricity region.

The Valley Gardens, a 175-acre township, has become one of the most sought-after addresses in the region, recording a 26.7% price appreciation, with rates rising from Rs 8,329 per sq. ft. at launch to Rs 10,556 per sq. ft. today.

“With an exceptional track record of appreciation, independent floors here have seen remarkable growth-a 1,750 sq. ft. 3 BHK that was priced at Rs 40 lakh in 2013 now commands up to Rs 1.90 crore, while a 2,450 sq. ft. 4 BHK has surged from Rs 65 lakh to Rs 2.5-2.6 crore,” said Brig Mahinder Singh, a DLF authorised channel partner.

Expanding on this success, The Valley Orchard, launched in December 2023, has already seen a 5.5% appreciation, further strengthening Panchkula’s reputation as a premium housing destination.

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