New Delhi | Jagran Brand Desk: In the first quarter of 2021, many Indian lenders decreased home loan interest rates to attract potential borrowers. Since these slashed home loan rates won’t last for too long, this is the right time for homebuyers to finance properties with an affordable home loan. However, the first step to getting this loan is to meet your preferred lender’s home loan eligibility terms. Normally these parameters are concerned with your age, finances, stability of work, debt to income ratio and credit score, all of which help in calculating your repayment ability. 

These criteria not only help you qualify for the loan but also get a larger loan amount as per your needs and a more competitive home loan interest rate as well as other beneficial loan terms. To know how to enhance your home loan eligibility, read on.

Boost your CIBIL score 

The first and most impactful thing to do when trying to boost your home loan eligibility is to increase your credit score. A high credit score is a crucial aspect of most lenders’ eligibility parameters as it reflects your creditworthiness. If you have repaid your loans and credit card bills on time and have decreased your credit utilisation, having a score of more than 750 is easy. If not, you can check your CIBIL score and take thoughtful steps to increase it by paying off existing loans, either doing a partial or full prepayment, not applying for too many loans simultaneously, checking your credit report for errors, and more. A high score positions you as a reliable borrower with lower default potential. This, in turn, helps you qualify for a large quantum of funding at suitable terms. 

Apply for a joint home loan

If your credit score or income don’t meet the criteria as specified by a lender, you can apply for a home loan jointly with your spouse or family member. This will increase your home loan eligibility as lenders can now consider more than one borrower’s score and income. This also helps divide the repayment responsibility over two shoulders. Obviously, it is important that you choose a co-applicant who has a high income and CIBIL score for this to work.

Showcase multiple sources of income

A job loss or change of stream mid-career can result in lowered income, which can decrease your home loan eligibility. In such cases, you can show the lender that you have other sources of income apart from your employment or business, be it via rental properties, freelance projects, investment returns or more. This will help the lender understand that you have the potential to repay the home loan over time without being tardy or defaulting.

Opt for a longer repayment duration

Home loans often come with a lengthy tenors going up to 30 years. This is a very important aspect to consider as lenders give you the freedom to choose the repayment term. Opting for a longer tenor means that your EMIs will be lower, which aids you repay affordably, without putting a strain on your income. However, this also means that the total interest you pay will be more, as the interest is applied over more months. That said, a longer tenor helps you increase your home loan eligibility as a lender assumes this will help you pay EMIs without missing due dates and even increase your earning capacity over time. So, it is best for you to use the EMI calculator and tweak the tenor multiple times to calculate home loan EMI that most suits your finances.

Apply with a lender you have a relationship with

To give your home loan eligibility boost, you may also consider availing a loan from a lender you have interacted with presently or in the past. This may include a lender you have taken a loan from or have an account with. Choosing a lender who knows you over a number of years will help increase your home loan eligibility as they will already know your profile as a borrower and have faith in your ability to repay the loan amount of your choice given your past dealings.

Decrease your DTI

Debt to income ratio or DTI is important to lenders as it helps them understand if you can afford to service another loan without leaving your finances in disarray. If your DTI is more than 40%, bring it down by prepaying existing loans in full before you apply for a home loan. Of course, increasing your income is another way to do this so you can opt for a high-paying job and apply for a home loan after you have steadily earned a better pay-cheque for some time. This will help you augment your home loan eligibility.

While these 5 factors can help you boost your eligibility in a measured way, keep two more things in mind. The type of property you choose can also affect your home loan eligibility. Choosing a reputed builder and a good location can also help you qualify for a home loan with ease. Also, make sure you don’t miss out on attaching even one document required for home loan application to prove your eligibility. This will also ensure you get quick approval on your application.

Lastly, it is best for you to choose a lender whose home loan eligibility terms are simply and easy to meet. One such loan is the Home Loan offered by Bajaj Housing Finance which offers ample funds and a long tenor up to 360 months for easy repayment. To get started, apply online now and await your home loan offer.

(Disclaimer: The above article has been written by the brand desk)

Posted By: Aalok Sensharma