Borrowers applying for a home or housing loan often complain that their lender has decreased the loan amount or increased the interest rate. But, have you ever wondered why this happens? The answer lies hidden in home loan eligibility. All Indian citizens above the age of 18 can apply for a housing loan. But, only a few get the best rates. This article discusses the top-5 tips you need to improve your housing loan eligibility.
- Repay Regularly
If you are a first-time borrower, this point does not apply to you. However, if you have loans or credit cards, you must regularly pay the EMI or dues. To increase your chances of loan approval, you can provide them with the receipts of the dues you have cleared. Then, when the lender feels satisfied with your repayment capability, they won’t mind offering you the best rates and quick approval.
So, repaying loans and card dues on time is an excellent way to improve housing loan eligibility.
- Let a Joint Loan Boost Your Profile
Besides offering fantastic tax benefits on joint home loan, it enhances the prospects of loan approval. When you rope in a co-applicant, the lender joins both applicants’ income to calculate the eligibility. And, if the other applicant has a decent credit score or monthly income, your loan prospects increase manifold.
So, a joint home loan is often an excellent way to improve home loan eligibility.
- Increase The Credit Score
Credit bureaus like TransUnion CIBIL, Equifax, etc., assign credit scores to borrowers in India. A credit bureau keeps track of your loan status and repayments to calculate the score. The credit score ranges between 300 and 900. Any score above 800 is considered a decent score, and lenders go the extra mile to serve such borrowers. However, if your credit score is below the threshold, you may have to pay additional rates to avail of a home loan.
Hence, when your goal is to get the best rates on a home loan, you have to improve your loan eligibility by increasing your credit score
- Apply During Special Sale Period
Some lenders give special discounts in the festive season or during special sale periods. You can approach a lender during such times to bag discounted rates. However, before approaching a lender during special sale periods, you must keep your documents in order. Also, keep the mobile phone near you because the lender might send you a message to confirm the loan application. When applying for a mortgage, apply during a special sale period. Some lenders offer an interest rate below the market interest rate for a special sale period. However, if you then cancel your loan application, you will be charged a cancellation fee.
Hence, keeping the documents in shape is paramount to improving your home loan eligibility.
- Look For Discrepancies
Sometimes, your credit score may not increase like it should because of clerical or human errors. Although financial institutions have a robust mechanism to report all loan and card payments and dues, mistakes may still happen. To avoid such anomalies, you must check the credit score frequently and point any discrepancies to the credit bureau.
However, restrain from checking your score too often since you may be charged for the service.
When your goal is to get the best interest rates on a home loan, you must improve your home loan eligibility. The steps mentioned above can provide you with the right direction to fulfill your housing dreams conveniently. You choose to take the home loan application process for yourself, be certain that you research the market, and choose the best lender in providing you with competitive rates. You may consult some of your relatives or friends who have successfully secured their home loan.