6 Ways to Boost Home Loan Eligibility
Home loans in India are complicated because the loan amount involved is huge and the applicant must meet with many criteria to get one approved. For an applicant, they always hope that the required amount would be sanctioned but that seldom happens. In this article, let us go briefly into the features of a home loan and how to boost Home Loan eligibility criteria, which will help you to avoid the rejection of Housing Loans in India.
What is home loan eligibility?
The lender/bank carries out an extensive process to find out if the loan applicant is eligible for getting the loan sanctioned. The bank decides on the total amount to lend and also fixes interest rate. Eligibility is identified by scrutinizing many factors based on the applicant’s residual income, financial commitments, credit history, risk factor and even the credibility of the project from which the applicant is buying the property.
Factors evaluated to decide eligibility:
- Residual income of the applicant; i.e. after taking into account all liable commitments.
- Income source is also carefully evaluated. Employees of a reputed firm, government employees, doctors, engineers, etc. have an upper hand. Self-employed or business running applicants might have to provide more paperwork.
- The credit history of the applicant is scrutinized. Defaults on credit card payments, loan repayments, etc. would induce a negative impact.
- Age of the applicant is also considered. Young applicants can easily get the loan sanctioned than old ones.
- A good relationship with the bank/lender as an already existing customer.
How to boost your home loan eligibility:
1. Provide them with all your sources of income:
You might be getting money from rentals, future prospects of bonus, dividends against investments, etc. Be sure to list them all to the banker when you apply for the loan.
2. Pay off all your debts and loans:
Do not default on existing loans and credit card payments. You might have taken a personal loan or a loan for an automobile in the past. Clear off the loans and look to start this with a clean slate. Clearing all debts and loan repayments would deliver a good impact on the credit score. If you want to buy one of the flats for sale in Pallavaram through a loan, then make sure that all your debts and loans are cleared firsthand.
3. Choose a long tenure for repayment:
Choose a long-term for repayment for getting the desired loan amount sanctioned. This would increase the rate of interest levied on your loan amount, but you can acquire the amount that you really need. Talk to your banker about this for obtaining higher loan amount.
4. Add co-applicants for the loan:
You can effortlessly augment the loan amount to be sanctioned by adding your immediate family members like spouse or siblings or parents as co-applicants for the loan. By doing this, the banks which lend you the loan amount have better security against the loan.
5. Go for reputed builders/realtors:
When you are purchasing a property like a flat/a villa/plot on loan, then make sure that you are purchasing from one of the reputed builders. See if the builder has collaborated with a financial institution to lend discounted loan offers to the customers. For instance, in Chennai, there is a project with flats in Tambaram with a reputed bank in collaboration for lending financial aid to the customers.
6. Evaluate your credit score:
Prior to the application of the loan, retrieve a copy of your CIBIL credit score for any mistakes or flaws. There are chances of errors in personal information and wrong entry on the credit report. Inform the concerned department about the wrong information as it could impact the sanctioning of the home loan.