Home loans provide an easy way to own a house. However, applying for a loan and getting it sanctioned is not so easy. Though there has been an unprecedented rise in the number of banks and NBFCs willing to lend you like never before, there are many people who are facing rejections of their applications. One needs to have a complete understanding of the loan he/she is applying for. Eligibility plays a vital role in the approval of your home loan.
Home loan eligibility doesn’t only mean whether you are eligible for a home loan or not but also becomes a deciding factor as to how much loan amount you can get. There are a number of factors that can help you to enhance your home loan eligibility. In case you are planning to apply for a home loan in the near future, here are a few things you can do to improve your eligibility.
1. Clear pre-existing loans – When you are trying for a home loan, it would be best to clear the existing personal loans, educational loans, or credit card debts to have better eligibility for a new loan. When you should close these accounts also collect the loan closure or no-dues certificates.
2. Apply for loans with longer tenure – There is a tendency that your home loan eligibility rises with an increase in the loan tenure because the lender understands that you have a lot more time to repay the loan amount. Also, these kinds of loans can increase the possibility of loan repayment and reduce the risk of the lender.
3. Opt for Step-up Loans – Step-up loan is the best option for those people who have lower net monthly income or who find it difficult to repay a higher amount of EMI due to other monthly expenses. Because these loans offer low EMIs in the initial years and gradually increase the amount so that you get time to become financially more secure to repay the loan amount in the later years.
4. Variable pay – It is very important to keep a record of your variable pay that you earn from your job. This record also helps potential lenders to consider or calculate your eligibility.
5. Add an additional source of Income – Having another source of income improves financial health as well as provides an opportunity of securing a higher loan amount. An additional source of income includes rental income, part-time business, freelancing, equipment or machinery rent, and many others.
6. Choose the lender carefully – If you have chosen a lender and wish to plan to apply for a loan within a year or before. Then you can start by opening a bank account before applying for any loan. By doing this, the lender may give you preference if you apply for any loan in the near future.
7. Include spouse earnings – In case your spouse is also earning, then it is a good idea to make him or her your co-applicant for the loan. This can help to increase home loan eligibility dramatically.
8. Take your time – It is very important to do proper research before applying for a home loan. So, take time, do not panic. Estimate your budget, keep a proper track of your earnings, check your credit report for errors as well as compare all the loan options.
Taking a home loan can be one of the biggest financial decisions of someone’s life. By this you can also avail lower home loan rates while getting a housing loan. Hence, you can increase your home loan eligibility by considering these simple tips.