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How To Increase One’s Home Loan Eligibility
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Home Loan interest rates are on an upward trend and this has affected the eligibility criteria for all the loan borrowers. Increase in interest rates makes it a difficult task for borrowers to get a loan amount as per their requirement. Increase in inflation rates has also adversely affected the floating and fixed interest rates, and they are quite exorbitant from a consumer standpoint. Your loan eligibility will decide if your loan application will be approved and how much loan amount you will be entitled to. There are various methods in which one can increase their home loan eligibility . These factors are listed below for your reference.
Eligibility of a home loan is calculated on the basis of the repaying capacity of the borrower on a monthly basis. Increase of loan tenure will ensure EMI per lakh of loan decreases and the loan amount increases. The only downside of doing this is that the borrower will end up paying more towards the interest since the interest will be applied on a longer tenure.
Repay All Other Outstanding Loans
Repaying all other loan installments will ensure that the monthly repaying capacity of the borrower increase. The loan eligibility will subtract all the outstanding monthly EMI’s which are being paid by the borrower and then calculate the remaining monthly repaying capacity. This is only possible if the outstanding EMI amount is within the paying capacity of the borrower.
Step Up Loans
A step up loan is a product in which the borrower initially pays a lower EMI and then the EMI increases over a period of time. This is based on the fact that the paying capacity of the borrower will also increase over a period of time. The calculation is generally based on expected salary hikes of the borrower.
Joint Home Loan
Including your spouse or parents for a joint home loan would simply increase the repaying capacity and the income levels. This increase in income level would also increase the eligibility amount which is required for home loans.
Include all perks\bonus
During the loan application process, the borrower can include various perks that the employer provides in addition to the basic salary as the net income. This will help in increasing the repaying capacity although the monthly paying capacity would remain the same. E.g. If your employer provides an annual bonus, it can be included so increase your loan eligibility.
If you have any rental income or any property which is not being used, then it’s always better to lease it out. Rental incomes can be included in the eligibility calculations to increase the monthly repaying capacity of the user. Rental incomes fall under the head of Additional Sources of income and can definitely increase your home loan eligibility.
Employer Bank Relationship
You can check with the bank if there are any schemes running for your employer. Banks generally categorize companies into various categories and some organizations do enjoy special interest rates or processing fee waiver. A lesser interest rate will definitely increase your eligibility.
Author Bio :
The author is a seasoned writer on finance topics and she articulates aspects that are important to people availing the home loans facility. She writes about a variety of topics covering the home loan documents, rates & the uses of home loan eligibility that help to make the best decision.
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