Once you plan to buy a home, you may want to get the large amount as much as possible. Getting a home loan guarantees you homeownership, even when your savings aren’t enough to have the home of your dreams.
But your lender has to check your loan eligibility before extending a credit facility to you. How much do you qualify for? How is your ability to repay the borrowed amount and interest? Your lender will analyse your home loan eligibility using income, repayment capacity, loan tenure, and credit score.
Home loan is a good option to opt for in India. With their Doorstep Service, dedicated relationship manager, and online and offline channels, NBFC is a convenient and best option for availing of loans.
Effective Tips to Enhance Home Loan Eligibility
Want to know how you can increase your housing loan eligibility? Check out these amazing tips below:
1. Maintain Your Credit Score at 750 and Above
Many financial institutions use your credit score to determine your creditworthiness. The chances of qualifying for a good home loan amount are high when your credit score is excellent. No minimum credit score is required to be eligible for a home loan. However, a score of 750 and above is considered well enough for loan approval.
You can always maintain your credit score high by making timely loan repayment. How serious you’re in settling your debts reflects on your credit score. Keeping a low credit utilisation also improves your credit score. Remember, a good CIBIL score can earn low home loan interest.
2. Get a Co-applicant
Do you have other earning members in your family? You can apply for the home loan jointly, which increases your loan eligibility. If you have a spouse or parents, you can include them in your loan application, which is the best option.
Besides enhancing your home loan eligibility, co-borrowing earns you tax benefits on home loans and divides the repayment burden. When the co-borrower’s credit score is good, it raises your EMI affordability, which improves your eligibility.
3. Declare Additional Income Sources
When applying for home loan online, you are required to declare the source of your income and proof of it. Your lender uses the income data to determine your loan eligibility.
Do you have rental income or a part-time business bringing income apart from your normal job? You should declare it when applying for a home loan. An additional source of income improves your financial health, which helps to secure a higher loan amount.
In addition, additional income sources boost the fixed obligation to income ratio (FOIR), increasing your home loan eligibility.
4. Avoid Switching Job
Are you a salaried person and planning to apply for a home loan? Some lenders require you to show proof you’ve worked continually in a given organization for a specific period.
So, frequent changes in your job can reduce your home loan eligibility.
If you plan to apply for a home loan, you should work in your organization for about two years, increasing your loan eligibility.
5. Take a Home Loan with a Longer Repayment Period
A loan with a longer tenure has a lower EMI, making it affordable and easy for many people to qualify. A reduced EMI means you can make timely payments, which looks less risky to the lender.
On the other hand, a long repayment period benefits you since it enhances your home loan eligibility.
Therefore, when applying for a home loan online, choose the package with longer tenure. But remember, the longer the repayment period, the more payable interest, which increases the cost of your home loan.
6. Choose the Right Lender and Build Good Rapport
You shouldn’t be in a hurry when planning to apply for a home loan. Explore the available lenders, compare their benefits and terms, and settle for the right financier. Then, you can open an account with your lender, which helps to build a good relationship.
Having a good relationship with your lender increases your home loan eligibility.
Conclusion
Take the above steps when planning to apply for a home loan, and you will increase your chances of qualifying even for a higher amount. Having an excellent credit score alone gives you a chance to get a loan at a lower interest rate. When your income is low and you can’t afford high EMI, go for a longer repayment period to increase your eligibility.