Is it possible to get multiple loans approved and accepted within limited loan capacity?

Full Question posted:

Lets say if i have applied for a Bank Loan for Property Project A ... which has fully utilised my loan capacity (ie capability to loan based on my gross salary). And this Bank Loan project A has approved, pending issuance of Offer Letter.

Say, I'm interest in Property Project B, in another area. And i have applied Bank Loan from another bank... Based on my loan capacity, i am qualified for this Bank Loan project B (due to my commitment for bank loan project A, yet to crystalise). Therefore, i think i should be able to get Bank Loan project B approved as well...

Please advise if my above understanding is correct? Am i correct to understand that the banks will only check my qualification for loan during the offer stage, and if i were to sign the Bank Loan Offer Letter concurrently from 2 different banks, then i can purchase both these properties, without much issue on the bank loans? Would there be any difficulty come disbursement time from the banks?


Advice:

This is a bit complicated if you intend to exploit this loophole. First you have to understand what the banks could possibly know about your credit. Most of the time, banks obtain your credit history from CCRIS. Basically, there are 2 major components within the CCRIS which banks are interested to know about. 1. existing active credits 2. your recent credit application with all institutions (shown under "Special attention accounts")

For instance, the current situation is that: You apply a loan of 300k at Bank X, Y, Z for project A.
Within the CCRIS report, Bank X will know that you did apply a loan with 2 other banks with an amount of 300k (but they don't know exactly which bank) and the other 2 will have same view as well.

Within a short period, let's say 3 days later, you apply a loan of 350k at Bank X, W, T for project B and this additional credit will breach your loan capacity. Most probably, the outcome will be:
Bank X: as 2 applications go to their banks, definitely they knew all the details and they will reject the 2nd application.
Bank W & T: they only know that you did apply a loan of 300k with 3 banks and 350k with 2 other banks. Most of the time, they will just assume that you are applying a loan from different banks for a same financing if the amount of application is very close. If they are not comfortable with the numbers, then they will ask you to clarify and provide support on this before they proceed on.

Okay, now here are the highlights.

1. You might be able to exploit this information asymmetric in securing financing for additional properties with limited loan capacity, provided that: (i) loan applications are very close in date, (ii) loan amount is very close, (iii) different applications do not go to the same bank.
2. Qualification checking after the acceptance of offer letter might cause some problems as well. Because, if they did figure out via CCRIS that you accepted 2 offers and the similar credits start to disburse simultaneously later, definitely, they are going to question you. Not every banks are practicing double qualification checking after acceptance currently (except for some banks which are more cautious and alert, ie. foreign banks).
3. Theoretically, such arrangement can work. Practically, chance of success is very thin if you are purchasing units from different projects due to timing issue & difference in loan amount. Somehow, under-con projects are financed by limited end-financier. Choice of banks are not as wide as you thought. Most of the time, it will work on purchasing multiple units within the same projects, especially those projects ran by well-known & reputable developers. Mainly because, this kind of projects will have more end financiers and buying similar multiple units will result in similar loan amount. Thus, could possibly overcome all the obstacles above.
4. If such arrangement does work smoothly, will it cause any trouble when it comes to disbursement? Normally, it won't unless you are incapable to service the interest during the initial disbursements.

Moral is, if you want to exploit this, you have to know everything, plan every step & find the right person to do it and understanding the risk behind potential failure. Because if you fail, no banks will service you in the future.