Boost Your Home Loan Eligibility: Essential Tips for Higher Approval Chances


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Having a house is a dream for many Indians. It has become a status symbol, a proof of your success and above all an emotional connection. From scouring around the houses to getting the keys into your hand, the process is long and hard at the same time. The entire process requires your attention and a lot of efforts too. If you are already in search of the houses, then start learning about your financing options too.

One thing that you need to remember is that you have to take extreme care of your eligibility and know whether you will get the loan or not in the first place. 

There are so many financing options starting from banks to finance companies. Choose your lender wisely and know their eligibility criteria in advance so that you can know whether you are qualified according to their norms or not. This will reduce the hassle of rejection. Along with that you should also prep yourself on how to increase your loan eligibility. In this article, we are going to share some of the most important tips that will help you in availing your loan and make your dream come true.

Keep a Check on Your CIBIL Score

CIBIL Score is nothing but your credit score. Remember that this credit score is important in every situation. The score of 750 or more is high and in order to attain this score you have to pay all your existing loans on time or even earlier and in full. This phenomenon is to be maintained until the loan is cleared.

Skipping one EMI can affect your credit score. While you are at it, do not apply for so many credit products. Whenever you apply for a new credit product, your credit score is checked and this will reduce the score. Yes, you read that right. Credit score will get reduced whenever you check it. 

So, be careful with it too. Banks and financial institutes are very keen about not giving loans to people who have less CIBIL score.

Longer Tenure Loans

The math here is very simple. The longer your home loan tenure is the less that you have to pay for the bank on a monthly basis. When EMI is less, it is easy to repay it. Hence, banks think that they would be able to get EMI from you regularly without fail.

Opt for a tenure of 15 to 20 years or even more.

Clear Existing Loans

If you have any credit card bills, EMIs or any other existing loans- clear them first. When you have a lot of loans under your name, banks will think of you as a hungry borrower. They might reduce your loan amount or levy high interests too.

Apart from that repaying multiple loans on monthly basis is burdensome. In order to reduce all the burden and increase the chances of your loan eligibility, clear the existing loans first.

Earning Co-Applicant

If you have a working spouse then add them as the co-applicant. Earning co-applicant will increase the chances of getting loan as the income earned by both of you is considered as one. Apart from that, having a co-applicant with a good credit score is also an addition to your home loan. 

You can also add your family members like your parents or kids as co-applicant, provided that they are abiding by the bank rules.

Add Other Sources of Income

If you have any other passive income source like property rent, machinery rent, small scale business, part time business, etc. add those details to this list. Lenders check your monthly cash flows and when you have more cash flow incoming every month, then you are more likely to get the loan.

Step Up Loans are Good

So, what are these step up loans. If you are earning less right now and can pay the loan in smaller EMIs, it is okay. The lenders will offer you an EMI option where you have to pay smaller EMIs at the start and gradually increase the EMI amount with time. 

This is a better option if you cannot pay more EMI at the start of the loan. It will give you the flexibility to pay back your amount.

Build Rapport with Lender

If you have chosen a lender for your home loan, you can start building rapport with them. Take a small amount of personal loan and repay it on time or even earlier if possible. This will make them them trust you. Banks and finance institutions are more likely to grant loan for a responsible borrower.

Take Your Time

When you are applying for a home loan, be very patient. The process is going to be long and you may also face some objections in between. So, prepare yourself for everything. Take ample amount of time and ensure that you have all of the documents and procedures ready for availing the loan. Compare with different lenders, make notes, check with interest rates and know what all details are required to grant you the loan.

This research will take a lot of your time, ensure to give it that time and also once you approach a lender there will be multiple checks, verifications, etc. So, give the entire loan process a good amount of time and stay patient all through that.

Bonus Tip for You

Here is a small yet important tip for you. Banks are not supposed to sanction you more loan amount than the house purchase price. They use agreement and stamp duty to know about this. So, ensure that the property price is mentioned in your agreement and also the stamp duty should be paid for the same amount during registration. If the stamp duty price is lesser than the home amount, less amount will be sanctioned for you. This has been a common case in various situations so be extremely careful about this.

If you are opting for a home loan, these are some of the tips that you have to follow in order to increase the chances of your eligibility. Hoping that this will help you in attaining your dream house. 


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