Home Loan Eligibility – Applying for a home loan becomes imperative when you want to fulfill the most cherished aspiration of your life – a home. Although home loan interest rates are at their lowest point ever, the effective interest rate depends on your eligibility. Indian lenders have tightened the home loan norms to reduce the instances of loan defaulting. And, if you exceed the lender’s expectations regarding eligibility, the chances of loan approval will be much higher. This article discusses the top-6 factors influencing instant home loan eligibility and ways to increase them.
Six Ways to Increase Instant Home Loan Eligibility Quickly –
- Enhance The Credit Score
The borrower’s credit profile, of which credit score is a part, plays a pivotal role in determining the eligibility and interest rate. Credit score generally ranges between 300 and 900. Any score above 750 is considered the best score. However, taking your score above 750 is never an easy task. First, you have to clear your loan or card dues in time to maintain a healthy track record. But, if your score is above 750, your chances of getting the best interest rate increases manifold. A home loan eligibility calculator gives you an exact estimate of home loan EMI to help you make informed decisions, taking into account potential benefits such as home loan tax benefit that you may be eligible for.
- Increase The Tenure
The loan repayment tenure determines the loan amount and interest rate. Your EMI will be the lowest if you opt for a long-term (between 25 and 30 years) instant home loan. Since your EMI will be low, you can pay it more conveniently. Hence, the lender may find your profile more attractive because the chances of loan default will be nil to minimal. However, if you opt for a short-term (less than 15 years) instant home loan, not only will the EMI be high, but so will be the burden on your finances. This may make the lender skeptical, and they may evaluate your application cautiously.
- Single or Joint?
Who doesn’t love freedom in today’s world? But, in the home loan terminology, being together is more beneficial, at least if you want to increase your eligibility. Try to rope in a partner who earns higher than you while applying for an instant home loan. When you use with someone with a stable income, the lender clubs income of both applicants. This not only increases your eligibility but also decreases the interest rate. Check a home loan eligibility calculator to find the difference in EMI amount between solo and joint accounts.
- Apply When You Are Young
A home loan repayment tenure may be as high as thirty (30) years. And the last age of instant home loan applications is generally 55 years, while the minimum age is 18 years. Therefore, if you apply for a home loan at a young age, you will get more time to repay the loan. This assures the lender about your repayment capability. Hence, they won’t mind approving the loan with attractive terms. However, the closer you reach the maximum age, the lower the chances of loan approval.
- Negotiate With The Lender
Some lenders offer higher benefits and discounted rates to existing customers. But, this doesn’t mean you should not approach a new lender. Some lenders also provide flexible eligibility and deep discounts on the interest rate for new applicants. However, you may need to negotiate with such lenders to turn the odds in your favor. If your credit profile is solid, the lender may offer you more benefits than expected.
- Increase the Downpayment Amount
According to the rules laid by the Reserve Bank of India (RBI), borrowers of instant home loans need to make a minimum downpayment of 10%. Since 10% is the bare minimum, you can add some amount to it and make a higher downpayment. A higher down payment amount decreases the loan amount and the EMI. This may prompt the lender to take an accommodative stance while determining your eligibility.
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Using a home loan eligibility calculator is essential to understand your financial liability. Apply for an instant home loan after evaluating all terms and taking steps to increase the eligibility.