Enhance your home loan eligibility

If you are looking for the right home loan to buy your dream house, keep in mind, loan eligibility concludes whether your loan application will be approved or not and if approved, the amount of loan that is likely to be sanctioned. It is constituted on your credit worthiness, which rely on income and debt repayment capacity. Although a good credit history and a stable income level are the primary sources of your home loan eligibility. You can boost your loan eligibility by following these simple steps:

Combining Incomes: 

As income is a primary norm, you could consider making a joint application while combining the incomes of other family members which will have a positive impact on your repayment capacity. Any other earning family member including spouse, sibling or parent can become a co-applicant for the loan. In such cases, as the clubbed income level would be higher, the loan eligibility would also be higher.

Repaying other outstanding loans:

If you have other outstanding loan liabilities, affects the loan eligibility drastically as the EMIs being paid towards those loans are deducted from the monthly repayment capacity. Lenders can easily find out your existing debt level. As per to enhance your eligibility, it is advisable to reduce your other outstanding loan before applying for a home loan.

Go for step up loan:

Step-up loan take into account the increase in incomes of individual over the period of loan repayment. This type of a home loan has lower EMI in the beginning which is increased in a step wise manner with the borrower’s income over time. In this case, the loan eligibility is calculated on the basis of the possibility of higher income that the current earnings which can increase the amount substantially.

Mutual relationship:

If you enjoy a long-standing relationship with the lender and have a good credit history, you could easily negotiate for a lower interest rate and higher loan eligibility. 

Long tenure:

The eligibility is determined based upon repayment capacity of the applicant on a monthly basis. If you increase the tenure the EMI of loan reduces and hence the applicant can now borrow much amount with the same monthly repayment capacity. However, it will increase the rate of interest levied on a longer duration.

When you attempt to improve the total amount that you are eligible for taking a home loan, it has to be based on actual repayment capacity. While you avail loans, ensure to repay your dues on time as to ignore the debt trap.

Visit www.cibilconsultants.com
Source-secondary