Factors That Affect Your Home Loan Eligibility
Availing of a housing loan requires extensive research and a detailed understanding of credit. Moreover, before approving the loan amount, lenders lay down certain eligibility parameters depending on which they evaluate loan eligibility.
So, in order to ensure prompt loan approval at a reasonable interest rate, borrowers must meet certain eligibility criteria for home loan and learn about the factors determining the eligibility.
Factors impacting housing loan eligibility
- Credit score
A borrower’s credit score indicates his/her repayment history and creditworthiness. Applicants with a CIBIL score of 750+ can negotiate with the lender for better interest rates. Lenders assess this score to measure the borrower’s financial credibility and repayment capacity before loan approval.
Apart from this, borrowers can use home loan eligibility calculator beforehand to determine the exact amount they are eligible for and apply accordingly to avoid rejection.
- Income
This factor significantly impacts the amount that financial institutions are willing to offer. If the borrower’s income is higher, he/she can avail a desired loan amount at a competitive interest rate. However, this will vary depending on where the borrower resides and works.
- Existing debt obligations
Unpaid dues or debts can significantly impact a borrower’s home loan eligibility. Lenders carefully assess a borrower’s repayment pattern, and if there is any delayed or missed payment from his/her side, lenders do not approve a loan application. So, borrowers need to be disciplined with credit repayment to avail of high sanctions at flexible loan terms.
However, borrowers must check the current home loan interest rate prevailing in the market and apply the most affordable one that suits their financial affordability and requirements.
To summarise, meeting the eligibility criteria for a home loan and knowing about the factors impacting it will allow borrowers to grab the most reasonable one and improve their borrowing experience.
