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4 Secret Tips To Improve Your Home Loan Eligibility

Aman Khanna

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Whether you are considering buying your first house or a second property as a holiday home or as an investment, you know that home loans are the best way to supplement your savings and purchase a home. To finance your home using a loan, meeting the housing loan eligibility criteria, which varies from lender to lender, is essential. While you need to submit the documents required for a home loan, you also need to pay attention to your income and your credit score to ensure your application is approved and that you get an affordable deal. However, there are other steps you can take to improve your home loan eligibility and move into a home of your choice at the earliest.

To start with, you can apply for a Home Loan from trusted lenders like Bajaj Finserv to get a loan up to Rs.3.5 crore with simple eligibility criteria, which you can repay via a flexible tenor ranging up to 20 years. You also get added features on your loan to manage your finances with ease. You can make use of tools such as the online home loan eligibility calculator to gain a clearer picture about the amount you are eligible for based on your net monthly salary, tenor, other income, and current financial obligations.

Here are 4 ways in which you can improve your home loan eligibility to get a high value loan sanction on a nominal interest rate.

Pay attention to the Relationship between your Income and Applied Tenor

Lenders look at your monthly income and total monthly expenses to evaluate your ability to accommodate home loan EMIs. The tenor you choose determines the amount you pay as EMI. A longer tenor will decrease the monthly outgoing, but increase the total interest paid over time, and a shorter tenor means you pay a higher EMI but less as total interest. So, choose a tenor that is comfortable for you and ensures the EMIs are within your budget. If a lender feels confident that you can repay the amount within the chosen tenor based on your earning age, you are likely to get the amount sanctioned faster.

Clear all Existing Debt

Your credit history reflects all your previous and existing dealings with debt. Managing your finances efficiently by clearing dues in a timely fashion shows a lender that you are capable of meeting financial commitments. If you currently have financial obligations, it will be good for you to clear them before applying for the housing finance. By not having any financial commitments, your chances of defaulting on an EMI are decreased. This gives lenders an increased sense of security while judging your creditworthiness. If you cannot clear all the debt, you should aim to keep it under 15% of your total income without a house loan. Even after including the EMI amount, your debt to income ratio should not cross 40% of your overall income. This will clear your application quickly and ensure you get a good deal.

Look for a co-borrower or Guarantor

If you are unsure about getting a high-value home loan sanctioned due to your current financial commitments, income, or credit history, you should consider looking for a co-borrower or guarantor. This could be your spouse, sibling, child, parent, or anyone else. This way your co-borrower’s added income and credit history can help you get your home loan sanctioned with greater ease, especially if the amount you aim to apply for is high.

Invest and Show Multiple Streams of Income

One of the best ways to strengthen your home loan eligibility is by showcasing multiple streams of income. Along with your active source of income, you may be earning passively via rent, investments, or other financial activities. This helps lenders be surer of you as a borrower as you are not dependent on one source of income and can manage timely home loan EMIs even when you face an emergency or lose your job.

With these 4 tips, you can come across as a trustworthy and reliable borrower. When selecting a loan, be sure to check your lender’s eligibility criteria before you start applying and collecting the documents you need to submit. Improving your credit score can result in lenders offering you a better home loan interest rate.


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