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Need a Home Loan? Know how to Increase Eligibility

Need a home loan

By Pradip MohapatraPublished 4 years ago 3 min read
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During 2021-2026, the home loan market in India is predicted to grow by 22% thanks to the rapid urbanisation and easy availability of borrowing options like housing loans. On the other hand, the latest report of Reserve Bank of India revealed that approximately Rs. 13.3 lakh crore is now outstanding only in the home loan sector.

Therefore, it is quite evident that almost all financial institutions will try their best to avoid the accumulation of Non-Performing Assets (NPA). Thereby, financial institutions are likely to approve a loan application only after assessing the home loan eligibility of the applicant thoroughly.

What Are the Tips to Increase Home Loan Eligibility?

Whenever an individual applies for a home loan, the first thing that a lender considers is that person’s loan eligibility criteria. Therefore it is of utmost importance to increase the eligibility for guaranteed loan approval. An individual with proper eligibility can avail a loan amount as per his/her financial requirement without much hassle.

Following are some of the tips that you can consider to improve your home loan eligibility criteria.

● Repay your existing debts

Your existing loans can duly impact your home loan eligibility. As a matter of fact, lenders will assess your debt-to-income ratio before approving a loan. Hence, try to maintain a low debt-to-income ratio by clearing your existing dues, at least a few months prior to making a home loan application.

● Maintain a decent CIBIL Score

Another crucial factor of deciding loan eligibility is CIBIL score. Based on your credit history and your previous loan repayment pattern, CIBIL assigns a score. A low CIBIL score is one of the factors that can affect your home loan eligibility. Since it is the score that indicates your creditworthiness, try to keep it as high as possible. Typically a score of 750 and above is considered to be safe for home loan eligibility.

● Opt for joint home loans

If your home loan criteria involve a high amount; you can consider opting for a home loan with a co-applicant. It will ensure that you will be able to share the repayment burden with your co-borrower and both of you can enjoy tax benefits for that. Likewise, it also lowers the risk of the lender. Lenders consider both your income and that of the co-applicant when determining home loan eligibility.

● Showcase all your income sources

While applying for a home loan, try to incorporate all your sources of income along with the monthly salary. It will convince the lender that you are in a sound financial condition, and they can expect a timely loan repayment.

● Choose longer tenor

Opting for a longer tenor for a home loan significantly increases your housing loan eligibility. With a long tenor, the borrowers get enough time to repay the loan. Since it also reduces the size of the EMIs, they can pay off the debt within the stipulated time, reducing the lender’s risk. Several lending institutions offer flexible tenor up to 240 months with competitive interest rates.

They also propose pre-approved offers for different financial products to limit time-consumption and hassle for the loan applicant. These offers are available on home loans, loan against property and many more. You can check your pre-approved offer by providing your name and contact information.

Also Read: Beneficial Ways To Increase Your Housing Loan Eligibility

● Apply for step-up loans

Step-up loans can prove to be beneficial, especially for applicants with lower income. Generally, these loans are long-term and come with low home loan rates. One of the specialities of this loan is initially, the EMIs of the loan remains lower compared to the later part of the repayment schedule. It allows the borrowers to get some time to arrange an adequate fund to repay the home loan without pinching other regular expenses.

Along with following these tips, you can also take help of an online home loan eligibility calculator. It will give you an insight into how to calculate home loan eligibility accurately.

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About the Creator

Pradip Mohapatra

Pradip Mohapatra is a professional writer, a blogger who writes for a variety of online publications. he is also an acclaimed blogger outreach expert and content marketer.

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