Tips to Increase your Home Loan Eligibility

Home loan interest rates have soared to an alarming degree in the past few months. This in turn has certainly affected the loan eligibility for home loans in India. This encourages loan borrowers to re-evaluate their options to avail new eligibility criteria.

Given below are some ways by which you can enhance their home loan eligibility:

• Increase Your Loan tenure:
  
  Taking Home Loan for the Maximum Tenure is the easiest known method to increase your home loan eligibility. An example will shed a considerable light on the prospect. An individual earning a monthly salary of Rs 60,000 narrows down to buy a home loan. After deducting a monthly expenditure of Rs 35,000, the individual is able to save Rs 25,000. Undoubtedly, he will use his savings for repaying the loan through equated monthly installments (EMI).
  
  Now, let's consider the rate of interests to calculate the required EMI. The installments for a home loan of Rs 1 lakh at an interest rate of 12.5% and tenure of 15 year stands at Rs 1,232.5. Concerning the same data, his home loan eligibility will be 20.3 lakh.
  
  However, the same individual can increase his home loan eligibility by around Rs 2 lakh if he extends his tenure to 20 years. With the same rate of interest i.e. 12.5% and 20 year tenure on Rs 1 lakh loan, the EMI becomes turns out to be Rs 1,136. Therefore, the home loan eligibility comes to Rs 22 lakh.


• Never Hurry Your Way towards Your Home Loan:
  
  Nowadays, almost every bank is offering a home loan with the repayment period of maximum 20 years. Apart from the tenure, the only thing which is left to consider is rate of interest. For that reason, you should never rush to buy a home loan.
  
  Always carry out a research and study the market meticulously to make the best use of what many banks and housing finance companies are willing to lend.
  
  Then, you have to decide between floating and fixed interest rate on home loan which largely based on your personal preference and knowledge about the both. However, the floating rate home loans are available for anywhere between 11.5-13%.


• Repay other outstanding Loans:
  
  Repay all the other pending outstanding loans like car loans or personal loans. It adds to your ability to repay and the lending institution takes greater interest in giving you a home loan.


• Take a joint loan :
  
  Banks and HFCs have come up with a joint loan option for both the husband and wife earning a combined Rs 1 lakh per month. The choice is available for a greater loan with either husband or wife earning Rs 60,000 per month.

You should work out solutions best suiting to your credit report and profile. You may also exchange views with a home loan consultant and only then consider taking up any of the options discussed.

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