Planning To Purchase New House? Here’s How You Can Increase Home Loan Eligibility

If you are planning to go for a home loan of a large amount, you need to have careful planning, financial stability, and a strong credit history.

New Delhi: If you are planning to buy a new house, home loans are easy options to consider for fulfilling your dream. Whether you are a first-time home buyer or planning to upgrade your new property, home loans provide an easy way to finance your real estate aspirations. These loans are being offered by various financial institutions including banks and housing finance companies and are designed to meet the specific needs of such homebuyers.

However, if you are planning to go for a home loan of a huge amount, you need to have careful planning, financial stability, and a strong credit history. Significantly, the eligibility to get home loan is determined by several factors such as credit score, loan term, repayment capacity, and income.

In general, banks do conduct a thorough assessment based on these elements to evaluate the applicant’s eligibility for a home loan. Before applying for home loan, understanding the ways to enhance the eligibility empowers the prospective home buyers to take proactive steps and position themselves favorably for loan approval.

Several strategies are out there to enhance your loan eligibility. Timely repayment of loans, including credit card dues and EMIs, can also improve your CIBIL or credit score. Apart from this, maintaining a low credit utilization ratio also gives an added advantage.

Making collaboration with family members who possess a favorable credit score and applying for a joint home loan can also enhance your eligibility for home loan.

If you opt for a longer loan tenure, although resulting in higher overall interest payments, can also increase your eligibility for a loan approval.

Furthermore, to enhance your financial standing, it is crucial to disclose any supplementary sources of income, such as rental income or part-time businesses.

If you make higher down payment, it can reduce the loan amount and lower interest payments as banks generally prefer a stable employment history with a minimum continuous service period of two years.

Lastly, it is crucial not to rush for the loan application process. You need to do a proper research, estimate your budget, check your credit report, and carefully select the interest rates and terms that suit you best. And then you can go for home loan.