Tips to increase your home loan eligibility

There are numerous methods for increasing home loan eligibility:

1. Pay off your existing debts-

If you are already repaying your older loans, this may affect your eligibility for a new loan
because lenders evaluate your loan eligibility based on your debt-to-income ratio. Only by
prepaying all previous loans before applying for a home loan can you enhance your debt-to-
income ratio. You can also examine and improve your CIBIL score by paying off unneeded
debts and making on-time payments. As a result, potential house loan borrowers should repay
their existing loans and shut all previous loan accounts by obtaining a loan closure or ' no-
dues' certificate from a lender. Following that, they should ensure that their CIBIL score is
updated.

2. Increase your CIBIL score-

 The simplest strategy to increase your credit score is to make your loan and credit
card payments on time.
 Always pay your EMIs and credit card bills on time and accurately.
 Sustain a CUR (credit utilization ratio) of 20-30% of your card's spending limit.
 Avoid defaults and debt settlements, as these can have a bad credit rating score.
 Requesting too many credit products at once will lead to a new credit score check,
which will decrease your score.
 Because the duration of your credit line impacts your credit score, having a credit card
or any loan for a long period reflects positively on your frequent repayments.

3. Take out a joint loan-

One of the most common methods for increasing one's chances of obtaining a house loan is to
apply jointly with one's spouse or a co-applicant. This significantly increases eligibility and
even comes with additional benefits. If you and your spouse can co-borrow a home loan and
split the repayment risk, you can both share the tax benefits mentioned in the income tax
legislation.

4. Consider a step-up loan-

Home loans are usually long and difficult to obtain the following retirement in the case of
salaried professionals. Therefore, individuals in their 30s or 40s might find it easier to get a
larger loan than those in their 50s. However, the problem here is that most young
professionals struggle to pay their EMIs at first. Taking up a step-up house loan can aid them
in this scenario. A step-up house loan has an EMI that is lower in the first few years than in
later years, reflecting the borrower's expected increase in income. Step-up housing loans are a
good option to explore for early or mid-career professionals who want a home loan but don't
have a lot of disposable income.

5. Choose a longer-term-

You can prolong the loan term, but try to avoid having to repay your loan over a longer
period because this would significantly increase your cost of borrowing.

6. Another source of income

If you have supplementary income, such as rental or company income, you may be able to
boost your home loan eligibility. As a result, if you own a second house, rent it out and factor
the money into your monthly financial inflows. Therefore, all circumstances stay constant, if
you own a second house and rent it out, the additional income obtained will be added to your
total income and will make the` ratio (FOIR) more favorable for you. Tips to increase your home loan eligibility