Buying a home is a major financial decision, and securing a home loan plays a crucial role in making this dream come true. However, many people struggle with low loan eligibility, which can limit their borrowing capacity. The good news is that there are several ways to boost your home loan eligibility and increase the loan amount you qualify for.
One of the easiest ways to check how much loan you can get is by using a Home Loan Eligibility Calculator. This tool helps you estimate your loan eligibility based on your income, expenses, and other financial factors. In this blog, we will discuss effective tips to improve your home loan eligibility and get a higher loan amount.
1. Use a Home Loan Eligibility Calculator
Before applying for a loan, it is important to check your eligibility. A Home Loan Eligibility Calculator helps you understand how much loan amount you can get based on your income and financial profile. By adjusting different factors such as loan tenure and interest rate, you can plan better and take necessary steps to increase your eligibility.
2. Increase Your Monthly Income
Your loan eligibility is directly linked to your monthly income. The higher your income, the better your chances of securing a larger loan amount. You can:
- Take up a part-time job or freelance work to increase your earnings.
- Show additional income sources such as rental income or incentives.
- Include your spouse’s income by applying for a joint home loan.
By improving your monthly income, you can get a better result when using a Home Loan Eligibility Calculator.
3. Clear Existing Debts and EMIs
If you have existing loans or credit card dues, your eligibility for a home loan may be lower. Lenders check your debt-to-income ratio before approving your loan. To improve your chances:
- Pay off personal loans, car loans, or credit card bills.
- Avoid taking new loans before applying for a home loan.
- Maintain a low credit utilization ratio.
Reducing your financial liabilities will increase the loan amount shown in the Home Loan Eligibility Calculator.
4. Choose a Longer Loan Tenure
A longer loan tenure means lower monthly EMIs, which makes repayment easier. This increases your loan eligibility as lenders see lower risk. While using a Home Loan Eligibility Calculator, try different loan tenure options to find the best balance between EMI and loan amount.
However, keep in mind that a longer tenure also means paying more interest over time. So, choose wisely based on your repayment capacity.
5. Maintain a High Credit Score
Your credit score plays a crucial role in home loan approval. A score above 750 improves your chances of getting a higher loan amount at better interest rates. To maintain a good credit score:
- Pay your EMIs and credit card bills on time.
- Avoid multiple loan applications in a short period.
- Keep a good repayment history.
A high credit score will reflect positively when using a Home Loan Eligibility Calculator and increase your borrowing potential.
6. Opt for a Co-Applicant
Adding a co-applicant, such as your spouse or a family member with a stable income, can significantly increase your loan eligibility. Lenders consider the combined income of both applicants, allowing you to get a higher loan amount.
When using a Home Loan Eligibility Calculator, enter the combined income to see the difference it makes in your eligibility.
7. Declare Additional Sources of Income
Many people have extra sources of income apart from their salary, such as:
- Rental income from properties.
- Bonuses and incentives from work.
- Earnings from investments like fixed deposits, mutual funds, or stocks.
Declaring these additional incomes while applying for a home loan can increase the loan amount you qualify for. Use a Home Loan Eligibility Calculator to check how these extra earnings impact your eligibility.
8. Choose a Lower Interest Rate
Interest rates affect your EMI and overall loan eligibility. A lower interest rate means lower EMI, which improves your eligibility. To get the best interest rates:
- Compare different lenders before finalizing your home loan.
- Maintain a high credit score to qualify for lower interest rates.
- Opt for a lender offering special interest rate discounts.
A Home Loan Eligibility Calculator allows you to compare different interest rates and choose the best option for maximum eligibility.
9. Improve Your Employment Stability
Lenders prefer borrowers with stable jobs and steady income sources. If you frequently change jobs or have gaps in employment, it may negatively impact your eligibility. To improve your chances:
- Stay with the same employer for at least 2-3 years before applying.
- Maintain a good track record of consistent income.
- Avoid switching jobs right before applying for a loan.
Using a Home Loan Eligibility Calculator while in stable employment can give you a better estimate of your loan eligibility.
10. Provide Accurate Financial Details
When applying for a home loan, ensure that all your financial details, such as income proofs, tax returns, and existing debts, are accurately mentioned. Incorrect or incomplete information can lower your loan eligibility or lead to rejection.
A Home Loan Eligibility Calculator provides the best results when you input correct financial details, so always double-check the information you provide.
Conclusion
Increasing your home loan eligibility is possible with smart financial planning and simple steps like increasing income, reducing debt, and maintaining a good credit score. A Home Loan Eligibility Calculator is a helpful tool to estimate your loan limit and make necessary adjustments before applying.
By following these tips, you can boost your home loan eligibility and secure a higher loan amount without any hassle. Plan wisely and take the right financial steps to make your dream home a reality.
