Friday, April 12, 2024

How Can You Enhance The Home Loan Eligibility?

If you have ever dreamed of owning your own home, chances are you have already given a thought of taking a home loan. In India, there are countless banks and financial institutions that offer the home loan facility as per the various parameters and customizations. Thus, you need to make prior comparisons of different lenders’ home loans before deciding to settle for one.

When you are making these comparisons, you must check the eligibility criteria specified by the lenders. Sometimes, you may like a loan scheme and think it is perfect for your suitability, only to find that you are not eligible for it.

Following are few tips for you to enhance the home loan eligibility:

5 Ways you can Enhance your Home Loan Eligibility:

  1. Pay off the debts you have already taken.
  2. In case you have already availed of a loan before, you must clear the dues. Before the lender approves your home loan application, they will check and verify your existing debt status. The decision to approve your application depends upon your debt to income ratio and steady repayments through which they can decide if you will be able to make payments of the future debt on time.
  3. Take action to improve your credit score.
  4. Before approving any kind of loan, the lender screens your credit score and report. In case you have a low credit score, the lender will either straight away reject your application or make an offer of the loan at a very high-interest rate. So it is crucial that before you make an application, you must improve your credit score. You may do so by timely clearing any dues against your accounts like credit card bills and EMIs. It’s also essential not to apply for too many credit products, which can negatively affect your credit score.
  5. Longer loan tenure for your benefit
  6. The prolonged repayment tenure is advisable when you consider a home loan scheme. Even if the overall interest payments increase, the EMI amounts you pay every month will decrease significantly.
  7. Apply for a joint loan with a co-applicant
  8. If you are married, you should add your spouse as a co-applicant for the home loan instead of applying for a home loan individually. In addition to helping you enhance your eligibility, a joint home loan will also help you get a comparatively more loan amount at affordable interest rates. You and your spouse can also take favor of the tax benefits available with the payments of home loan EMIs.
  9. Show the lenders your additional sources of income.
  10. If you have an additional income source, the lenders are more likely to approve your loan application. For example, a rent receipt from your let-out property can show that you receive an additional sum each month apart from the regular earnings, which are also consistent. Hence, this can assure the lender regarding your repayment capacity.

You must ensure to make due payments of all the EMIs and pending credit bills on time so that your credit score does not suffer. Until your existing debts have been paid off, you should not apply for a home loan. These five tips can help you enhance your home loan eligibility and plan for a future debt better.

Related Articles

Latest Articles