These Pointers will Easily Increase Your Home Loan Eligibility if you Follow
Lines of credit like a home loan have gained popularity among individuals desiring to own a residence. Even though such loans promise easy access to funds, stringent home loan eligibility parameters can restrict one’s chances of acquiring the desired amount.
Hence, borrowers must try to improve their creditworthiness by implementing certain ways.
How to increase Home Loan Eligibility?
Some of the essential pointers to employ for enhanced home loan eligibility are-
- Paying off existing debts
Paying off any existing loans is a convenient way of improving one’s creditworthiness. Late EMI and interest repayment levy a penalty that degrades the CIBIL score.
- Limiting FOIR
FOIR or Fixed Obligation to Income Ratio is a significant factor determined by lenders before approving the home loan approval. This ratio indicates the percentage of income used to pay off the existing debts monthly.
Hence, a higher FOIR reduces credit eligibility, thereby increasing the chances of application cancellation. Maintaining a 40% debt to income ratio is typically recommended.
- Opt for a longer loan tenor
Individuals can choose a long tenor to reduce the EMI burden and simultaneously improve creditworthiness with timely payments. However, this would increase the overall interest outgo for the loan as well. To calculate the precise repayment structure, one can use a home loan EMI calculator.
- Good CIBIL score
The financial institution offers lucrative housing loan facilities to applicants who are able to maintain a 750+ CIBIL score. This factor removes the risk of defaulting and ensures the reliability of a borrower, leading to better rates.
- Joint application
The home loan eligibility also enhances with a joint home loan application. A co-applicant, ideally a woman with a good credit score, leaves a favorable impact on loan eligibility. Moreover, the home loan tax benefits also double up.
Following the pointers mentioned above would easily help a potential borrower improve his/her home loan eligibility.
