If you wish to purchase a home for yourself then opting for a home loan is the way to go forward. There are various banks in India who offer home loans depending on the various needs of their customers. It is recommended you first compare different home loan schemes before availing the one you feel is suitable.
While comparing home loan schemes, check the eligibility criteria. However, you might come across a loan scheme which you feel is suitable for you but you may not be eligible for it. Given below are some of the tips you can follow to enhance your eligibility for home loans:
If you have availed any loan, make sure you have cleared your EMIs. The bank, before approving your loan, will check whether you have any other existing loans. This will help them determine your debt-to- income ratio and determine whether you will be able to pay your home loan EMIs on time or not. If you have a lower debt-to-income ratio, you are more likely to be offered a home loan at lower rates.
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The lender will thoroughly check your credit score before offering you a home loan. If your credit score is low then either the bank will reject your home loan application or offer you one at a very high interest rate. Hence, it is recommended that before you apply for a home loan, make sure you improve your credit score by clearing all your EMIs, credit card bills, etc., on time. Do not apply for too many credit products as too many checks on your credit score can impact it negatively.
It is recommended you opt for a longer repayment tenure when applying for a home loan. Though the overall interest payable will increase, the overall EMI you will pay will also fall considerably.
Instead of availing a home loan individually, you can opt to take a joint home loan. If you are married then it is always good to add your spouse as a co-applicant. Not only will this help in enhancing your eligibility, but you will also enjoy other benefits as well. Availing a loan with a co-applicant will help you avail a higher loan amount at affordable interest rates. Both you and your partner can also enjoy the tax benefits which accompany the payment of home loan EMIs.
Your eligibility for a home loan improves if you can show that you have an additional source of income. For example, if you earn extra through some business or have rented a part of your property, you can show the income generated from it to enhance your eligibility and apply for a home loan scheme of your choice. The additional income you generate is added to your primary income thus improving your Fixed Obligation to Income Ratio (FOIR).
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You must make sure that you pay all your EMIs and existing credit bills on time so that your credit score do not suffer. Do not apply for a home loan until and unless your previous loans have been cleared. This will help you maintain a good debt-to-income ratio.
If you follow the steps mentioned above, your eligibility for a home loan will improve and will make it easier for you to avail a home loan scheme of your choice.
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