Top 6 Tips to Enhance your Home Loan Eligibility
Availing a home loan is not a cakewalk. You need to do thorough research and analysis of various aspects of home loans before making a decision about the home loan. An important aspect of home loan research is the home loan eligibility criteria. It is by understanding these criteria that you can truly know how much loan amount you can avail, how much down payment needs to come from you, the minimum income threshold, the rate of interest applicable based on your employment type and loan amount, etc.
Here are the key home loan eligibility factors that you must know about:
- The minimum age required is 18 years, and the maximum age for most banks is 65 years. Although some banks have 70 to 75 years as the maximum age limit as well.
- The minimum monthly salary required is Rs. 25,000. If you are self-employed, even then the minimum monthly income required is Rs. 25,000.
- Some banks have a credit score as criteria as well for deciding the interest of the loan. Thus, the better the score you have, the lower will be your interest rate. Ideally, you want to be above 800.
- The type of property for which you are availing the loan also alters the eligibility criteria to a certain extent which varies with the bank to bank.
- As for work experience, the minimum experience required for salaried is 2 years, while it is 3 years for self-employed.
- Having a co-applicant or availing a joint home loan is obviously not mandatory. However, it can enhance your eligibility to get a higher loan amount and improve your chances of getting the loan, as two people’s income would be merged.
Now, here are the key tips for you to enhance your home loan eligibility:
1. Prepay
In case you have existing credit or loan, it is better to prepay them completely. It would clear your monthly income which was previously blocked to meet the monthly obligations arising due to that credit which will leave a higher portion of your income is free to be considered when the bank will assess your repayment capabilities.
2. Another Income Source
When you add another income source like rental income, a part-time business, etc. it gives you an added advantage to secure a higher loan amount or at least make your eligibility stronger for the current loan amount in consideration.
3. Long Tenure
By opting for a longer tenure, you give the lender the assurance that you want to repay and you are taking time for it. Besides, it also helps in reducing the EMIs, so the burden on the monthly budget also eases.
4. Include Co-applicant
By including a co-applicant, especially your spouse, the chances of getting a higher loan amount sanctioned increases. The total income to consider for assessing repayment capabilities will increase and move the game in your favor.
5. Improve Credit Score
Your creditworthiness is assessed based on your credit score. Thus, it is best to improve your score by making timely payments of your monthly debt obligations and even to pay off the outstanding credit card balance and loan.
6. Build Relation
In case you have decided the lender but will apply for the loan after 6 months or a year, then the best approach is to open an account with the lender and start building the relationship. The existing relationship acts as a trust factor and is given preference while assessing the home loan applications.
Availing a home loan is one of the biggest financial decisions. Therefore it must be taken after assessing the above-mentioned points to improve eligibility and make yourself available to get the best offer possible.
