Staggering Tips to Boost Your Home Loan Eligibility Before Applying For a Housing Loan in India!
Ever since the home loan interest rates started declining, more and more people are applying for home loans and becoming homeowners. A home loan provides the finances required to buy a house, and lenders usually offer a tenure of 20 years in which you can repay the loan.
Now, there is a lot to think about before you apply for home loan. Most borrowers focus on the repayment plan, but before doing that, it is also important to be familiar with the lender’s housing loan eligibility criteria. Now, lenders consider certain factors while determining an applicant’s eligibility for a home loan, and in order to get the required loan amount, you need to be in a good position when it comes to these criteria.
So, take a look at a few tips that will help improve your eligibility for a home loan:
- Clear any existing debt
If you already have existing monthly instalments while applying for a home loan, it means that your repayment capacity is less. For lenders, this is a risk as you might not be able to accommodate multiple loans at the same time. This is why it is ideal to clear all your loan obligations, which will have a positive impact on your home loan eligibility.
- Maintain a good CIBIL record
An excellent CIBIL record is always an effective factor that boosts home loan eligibility. For this, it is important to make sure that all your payments are being made on time. Defaulting on payments will negatively affect your credit score. Ideally, it is considered best to maintain a credit record of 750 or above.
- Make a higher down payment
A home loan plan will only cover up to 80-90% of the property value, depending on the loan amount. The remaining amount will have to be covered personally, which is known as the down payment. Now, voluntarily making a higher down payment is a good way to improve your housing loan eligibility. Doing this can also help in saving money. Since you are making a higher down payment, the loan amount will be lower, which means that the interest payout will be lesser too.
- Show additional sources of income
If you have any additional sources of income, it is advisable to declare them to the lender while applying for the loan. This income could be anything from freelancing work, part-time business, or even rental income. It displays financial capacity to take care of a higher loan amount, which improves your eligibility for a home loan.
Now that you are familiar with the ways that can improve home loan eligibility, keep them in mind before speaking to a lender. It is better to use a home loan eligibility calculator before applying for the loan. This home loan calculator can help you be aware of the loan amount that a lender is likely to approve.