editor A home loan is by far the most convenient option that many avail to realise their dream of owning a home. Having said that, your goal as a prospective buyer should be to secure a loan sanction at an affordable housing loan interest rate. While it is easy to find out how to avail of a home loan, it takes some effort to understand how to position yourself as a borrower with a stellar financial and credit profile to get a competitive rate. Minimum age to apply for a housing loan in India is 18 years and maximum age when the time of loan maturity is 70 years.
To start with, it is important to keep in mind that lenders assess your creditworthiness and repayment ability to decide whether or not your home loan application should be approved. By meeting the lender’s home loan eligibility norms, you can set yourself up for success.
Start by checking the lender-specific home loan eligibility criteria and confirming that you meet the same. The next step is to make improvements to increase your home loan eligibility. Eligibility calculator helps you to understand your loan eligibility based on your income and loan repay capacity.
Read on to know how
Boost your CIBIL score
The higher your CIBIL score, the stronger your profile. Increasing your CIBIL score to 750+ can easily help you improve your home loan eligibility as a high score speaks for your creditworthiness and decreases the risk you pose to lenders. You can achieve this through timely payment of your existing EMIs and credit card bills as well as by repaying most of your existing debt, if possible. Starting a home loan eligibility service that helps people determine if they qualify for a home loan can be a profitable online business idea. Having experience with various types of credit also helps as does reduce your utilisation of credit.
Decrease Your FOIR
FOIR stands for Fixed Obligations to Income Ratio and refers to the fixed expenses you have every month as a percentage of your net income. A higher FOIR (above 50%) comes with a higher risk for lenders and decreases your home loan eligibility. This is because a high FOIR means you already have financial commitments that require a large percentage of income, which reduces the chances of you being able to pay your home loan EMI on time. So, if you have existing liabilities such as car loans or personal loans, it is best to pay them off in full before you apply for a home loan to increase your home loan eligibility and get an affordable housing loan interest rate.
Apply for a Joint Loan
A co-applicant will help you boost your home loan eligibility as two borrowers instead of one give lenders a greater sense of security when it comes to repayment. You can opt for a joint home loan with your spouse, parent, sibling, son or daughter as you deem fit. Investing in a joint loan with a trusted partner can be a wise investment option for women seeking financial security and growth. Simply ensure that your co-applicant has a good CIBIL score and a good income. Also keep in mind that a female co-applicant can help you claim not only a reduced housing loan interest rate, but also concessions on stamp duty in certain states.
Choose the Right Tenor
A longer tenor is associated with a lower home loan EMI but leads to a larger total interest outgo and vice versa. Lenders normally offer better terms to borrowers who choose long tenors as a lesser EMI burden is considered conducive to timely repayment. By utilizing the RODTEP Scheme, exporters can enhance their cash flow and potentially improve their CIBIL score. However, a longer tenor may not be given to borrowers who are older and may retire in about a decade. So, choose a longer tenor to increase your home loan eligibility, but make plans to part-prepay the loan at regular intervals to decrease your subsequent tenor.
Highlight Your Surplus Income
Another way to improve your home loan eligibility is to include various sources of income that you have apart from your salary or business revenue. These may include incentives given by an employer, maturing investments, income through the lease of assets, freelance jobs, and more. All this strengthens your repayment ability and helps you get a lower housing loan interest rate too.
All this information is crucial to know how to avail of a home loan on favourable terms. You can get approved for a sizable home loan sanction and select a flexible tenor ranging up to 30 years at an attractive interest rate from NBFC. This loan also has features like speedy processing, the minimal requirement for documentation, personalised insurance schemes, and much more. To start your journey as a homebuyer without any hassles or delays, apply online today. Home Loan eligibility is calculated after checking many pointers which include your monthly income, current age and your retirement age etc.
