When you apply for a home loan, your approval mainly depends on whether you meet the eligibility requirements of the lender. Read on to know how you can enhance your eligibility and improve your chances of getting the loan approved.
A Quick Guide for Enhancing Your Housing Loan Eligibility
Knowing your home loan eligibility is one of the critical steps in initiating the home loan process. Today, although many lenders in India are willing to provide home loans; they all have strict eligibility requirements. If you fail to meet these requirements, your loan application may be rejected.Read more: Understanding The Advantages Of A Prepaid Electricity Bill
But, you can take specific steps to enhance your eligibility, before you apply for a home loan so that your application gets approved in the first try. Here are a few ways to improve your eligibility for a home loan.
Pay off your existing dues.
One of the important things that the lenders consider while approving the home loan is your ability to repay the amount consistently over a period. But, if you have any existing dues like credit card payments, personal loan or any other outstanding payments, the lender will be sceptical about your ability to repay the home loan and may reject your loan. So, before you submit your home loan application, it is paramount that you pay off all your existing dues. This will not only help you get your loan approved but also will make repayment easy.
Apply for a joint loan
They say, ‘two is better than one.’ This aptly applies for a home loan. Instead of applying for a home loan alone, you can include any of your earning family members, including father, sibling or spouse as a co-applicant. A significant advantage of this is that you can club the income of both the members to showcase your repayment capacity. Additionally, when you apply for a joint home loan, both of you will be eligible for tax benefits, and you can reduce your overall tax liability.
Avoid applying for a short-term loan.
This is another definitive way to improve your home loan eligibility. Generally, home loan tenure ranges from 20-30 years. When you opt for a longer tenure, you are showing the lender than you have a longer time to repay the amount in full. Also, longer tenure means lower EMIs, which makes it easy for you to repay the loan consistently on time.
Take advantage of the step-up loan facility.
It can be easier to get the loan approved while you are young in your 30s or 40s, as compared to those who are nearing their retirement age. But, one of the significant issues most youngsters face is that they struggle to repay the EMIs.
Hence, opting for a step-up loan can be an excellent solution. A step-up loan is a type of home loan facility that allows the borrowers to repay a smaller EMI in the initial years of the loan, and keep increasing the EMI as they progress in their professional life and their income increases.
Declare additional source of income
If you are a salaried employee and have an additional source of income, you must showcase the same to the lender to enhance your eligibility. You may have income from sources like mutual fund investments, business income, rental property, fixed deposits etc. Showcasing additional income will give the lender confidence about your monetary standing and your ability to repay the loan in full on time.Read more: Money Transfer to India from Europe: 5 Tips to Make Transfers Safer, Convenient, and Cost-Effective
Thus, there are more than one ways to enhance your home loan eligibility. Make sure that you enquire about the eligibility requirements of the lender and check if you meet their requirementsbefore approaching them for a loan.