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How to Increase Home Loan Eligibility


How to Increase Home Loan Eligibility

Getting a home is not at all a very difficult task in modern times, thanks to the number of banks who are now coming forward to provide the necessary financial assistance. If one has a more or less steady income, and has all the documents to show for it, then it is not difficult to acquire a home loan. Banks today are now ready to finance about 80% of the home price and one just has to have the required amount of money to book the flat and make the down payment. The home loan often takes care of the rest in a most hassle free manner.

What are the factors that can help with increased home loan eligibility?

While one is always eligible for a home loan in some measure, provided he has an income to show for it, there are often other ways of increasing the eligibility and that also help you acquire more money from the banks. However, it is very important that one goes about the repayment plan time and again so as to avoid any kind of hassle during repayment. In case you are unable to repay the loan, even after paying a considerable number of EMIs, the house may be forfeited by the bank and the money spent on it for that time would be lost.

The cities today boasts of every amenity that can be imagined and the steady rise of the population in city is also leading to increased demand for housing facilities. There are many major banks such loans to make the process of home buying a much easier one. One just needs to check their eligibility to be approved for the loan and the disbursal can take place within a couple of days.

How would one check the eligibility for before applying for the loan?

One of the best ways to check the eligibility for a loan is to use an eligibility calculator that most banks have on their website.  Certain factors are taken into account like the income of the applicant, the loan tenure, the interest rate, the expected principal amount of the loan and whether there are any additional sources of income to determine how much loan is the applicant eligible for.

Lenders also take into account certain other factors like credit score and stability of employment to make sure that the borrower is a safe risk to lend to and he would be able to afford the repayment. If these factors are in place, then the home loan eligibility is bound to increase.

How to increase the eligibility for home loan?

  • To start with, a good credit score is a marker that the borrower is good with his finances and there are no dues or unpaid credit card bills that can adversely affect his repayment and increase his liability. Once the basic eligibility factors are met with, certain document are also required to be submitted and only once they are verified and cleared is the loan finally approved. Some of the documents that are required at this point of time are Photo ID and Age Proof, Address Proof and the IT returns for the last three consecutive years.
  • To be eligible for a home loan it is very important that one is able to meet the monthly EMI requirements. A chunk of the monthly income will go towards the payment of EMIs for the span of fifteen years or so, depending on the tenure of the loan and it is important to determine at the very onset that you are well equipped to handle this kind of a financial commitment. The best way to find this out is through the use of an EMI calculator which will instant show how much EMI would a borrower have to pay each month depending on the home loan interest rate that the lender is currently charging and the loan tenure for which he wishes to apply for the loan. If the income is more, then the eligibility will also increase accordingly.
  • Home eligibility can also increase if one is offering some kind of a collateral. Home loans are usually unsecured loan, which means that there is no need to offer a collateral as such. But that also means that the lenders are a little concerned about whether they are going to get their money back or not and this automatically keeps them from approving a huge loan amount. If however, one can show an asset that can be used as security, or then there are chances of the loan amount going up considerably. The lender will have far greater assurance that he will get back his money one way or another and this will prompt him to approve a higher loan amount and increase the eligibility. Ancestral property, vacant plot, automobiles, or even FD certificates can be used as security. However, the only risk here is that once the borrower fails to keep up with the EMIs, the security will be forfeited.

When all the parameters are met with, one can be deemed eligible for the home loan and likewise the process of loan disbursal starts. Even if someone has a low eligibility, they will be entitled to some loan amount and they can, of course, still apply for the loan and based on the eligibility, would be approved for a certain loan amount.

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