Saturday, 19 January 2019

Frequent changing of jobs can affect your loan approval

Jobs always give a financial security and that’s the most required these days. Unlike ancient time where things worked with the barter system, today it is the money that is exchanged in terms of goods and services. It takes a lot find a decent job where one can adjust themselves, work and get settled. Sometimes this journey is very comfortable and sometimes it is full of a roller coaster. Not everything ever is as perfect as one wants it to be and hence working in the same organization for forever is not very common and in some cases not even advisable.

Many people change their jobs after a certain period of time depending on their individual needs. However, changing jobs too frequently also has its repercussion and effects. One may have to change a job for better perspective, good salary hike, newness or to get better comfort than in current organization. But, changing them too frequently also gives an idea about instability. When talking about loans and credits, before the approval of the loan, the employment status is always checked. The earning obviously is checked in both the cases if a borrower is a salaried individual or a self-employed individual as that is the indication of how much loan amount is to be sanctioned in order for the borrower to pay that loan easily.

There are few loans that are approved only when an employee is working in the current organization for more than one and a half or two years. The frequent change gives the loan approvers an idea that that must be a pattern that one follows. What if the job where they are working currently would not be a longer duration one, and he/she may switch and will not be able to pay the EMIs on time? It becomes a risky decision for the lender. Also, the cibil score will get affected if the borrower is unable to pay the EMIs of the loans and credit card bills on time. This would lead the score to go down and the report gets affected.

There are a few examples where an individual has genuine reasons for the switch of their jobs. But, they can’t be as fast as changing it every six-eight months or each year for a very long period of time. Once in a few years and some in a couple of years would not be very bad as it may happen that an employee is not very comfortable in the process and hence planning to change. But yes, if that is in all the jobs, then it gave an impression about the person not being stable and responsible enough to adjust.

Cibil score calculation may not directly has these criteria that a changing job directly affects it. But when one applies for a loan, the background is checked by the underwriters. Underwriters are the people who check the eligibility of the borrower or the applicant who has applied for a loan. For a few loans where the loan amount is higher, a reference check is done. To the people staying in the neighborhood, the HR of the organization where the individual works and sometimes maybe in a previous organization if the applicant has recently switched a job. In any of the cases, the inquiry definitely goes to the employer and if one frequently changes the job then, in that case, it gives a negative impact. With the reference check, the underwriters also take a personal discussion with the applicant to understand a few aspects when they can see frequent job changes or bad cibil score.

With all this, the bottom line is that one must be bey sure of the decisions they take. Today may not be a day where they want to apply for a loan, but tomorrow there can be a possibility that they have to. If not taken care today, it may affect it tomorrow!

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