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Top 5 Ways to Increase Home Loan Eligibility

  • 25-Feb-2022

Buying a home is the biggest decision of an individual life. It requires so many scarifications of financial planning, keeping yourself within the set of boardies.  

In recent years, homebuyers are taking the initiative to get home loan as the competition among lenders is rising to offer home loans at affordable interest rates.  

However, banks carry certain parameters to determine borrower's eligibility on home loans. It includes income, credit score, age criteria, employment type & related others. To increase eligibility on home loans, the following are the points that need to be considered:  

1.  Add co-applicant  

You can improve eligibility on a home loan just by adding earning family members as co-applicants. Lenders funds that applicant whose income is higher & show the affordability to pay EMIs. As much as you & your co-applicant show higher income that much higher eligibility on loan increases.  

2. Repay debts earlier to a new loan  

Lenders analyze the debt-to-income ratio to know applicant repayment capacity if you are running any existing loan & paying debts that affect your take-home salary & lower the eligibility, to improve your chances of availing loan is repaying debts before proceeding for a new loan application. By doing so, rejection on the application will be lower.  

3. Choose Longer Repayment Tenure  

Generally, applicants who opt for shorter tenure will have to pay higher EMIs & contain the risk of defaults that lower eligibility while choosing a longer repayment tenure reflects lower default rates & increase EMI affordability. Hence, the applicant assures repaying the loan without making any default on payment.  

4. Maintain Good Credit Score/ CIBIL Score  

Credit score ranges from 100 to 900, applicants with 750 & above scores are preferred by lenders. A higher score indicates higher repayment capacity. Therefore, keeping an eye on your credit report is essential. If you found any wrong/error appearing in the report- that shall need to be corrected immediately to avoid lowering the score. Most prominently, maintaining a good credit score not only helps applicants to get an easy loan but he/she will get the chance to negotiate home loan interest rates.  You can also check credit reports for free !

5. Paying Higher Down Payment  

Usually, banks & financial institutions finance 70% - 90% of property value as a maximum loan amount, wherein each lender maintains a 20% margin that shall be paid by home loan buyers. Lower your loan requirement by paying a higher down payment. This activity will create an opportunity to enhance your eligibility for a home loan.  

By considering the above ways to increase home loan eligibility you will increase the chances of qualifying for a housing loan.  

Eligibility Criteria for Home Loan  

Age Limit Min 18 – Max 65 
Residence Both Resident of India & NRIs 
Minimum Income Rs.25,000/- monthly 
Work Experience At least 3 Years 
Credit Score   750 & above 
Property Type Completed/under-construction project, plot/land, land/home purchase 
Minimum Down payment 20% on loan amount 

 Also Read: - Home Loan Process

Check Home Loan Eligibility Calculator  

Home loan eligibility calculator allows individuals to assess eligible loan amounts that they can avail loan based on various eligibility circumstances. With the use of an eligibility calculator, individuals can easily plan their finances accordingly.   

Follow below steps to check home loan eligibility: -  

  1. Enter your monthly income
  2. Enter interest rate you pay on the loan
  3. Enter loan tenure you choose to repay loan
  4. Enter other existing loan EMIs (if applicable)
  5. Click on calculate button to know your eligible loan amount

Once you feed the required fields, the calculator immediately reflects your maximum eligible loan amount.  

How does Home Loan eligibility calculated?  

Lenders consider multiple factors to determine applicant eligibility on home loans & estimate repayment capacity as well as risk consistency. Factors include age, income, employment type, credit history, place & other existing loan histories if applicable..etc.   

The interest rate shall differ from lender to lender, even applicant to applicant gets differed on the above factor calculation, the applicable interest rate is determined by lender.   

Creditworthiness is a crucial factor that plays an important role in determining applicant eligibility.  

How to check home loan eligibility by Financeseva?  

Financeseva allows you to compare and choose the best home loan deals with the aid of home loan eligibility calculator usage. All you need to do is visit the official site select home loan look for a preferred bank & fill few details to know your eligibility.  


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