These Tips Will Increase Your Home Loan Eligibility in 2021

Home Loan Eligibility in 2021 Around 89% of the respondents of ‘India Real Estate Report 2020′ revealed that they are looking to buy properties in 2021. There has also been an appreciable jump in the home buyers’ budget. This sudden rise in demand is a result of the interest rate cuts in home loans, alongside attractive offers by lenders and builder discounts.

Further, according to the Union Budget 2021, taxpaying borrowers can enjoy exemptions of up to Rs.3.5 lakh on home loan interest pay-out. With such benefits and more, availing a home loan has become an immensely profitable proposition in recent times.

Regardless, before applying for a home loan, individuals need to check their home loan eligibility criteria to ascertain that they qualify for the same. Mentioned below are a few points that one can follow to boost their eligibility to avail a home loan in 2021.

Tips to increase eligibility for a home loan

Eligibility to avail a home loan generally depends on the repayment capacity of an individual. One can follow these few tips below to ensure that they are eligible to avail the amount they apply for –

  1. One should clear all existing debts. 
  2. A longer repayment tenor will increase the home loan eligibility because it will be convenient for the borrowers to pay the EMIs.
  3. An individual should get a copy of the credit report and fix errors, if any. 
  4. Borrowers can have their parents/spouse with a higher credit score as co-applicant for home loans.
  5. Presenting multiple sources of income can effectively boost eligibility. 

Additionally, HFCs lay down other parameters to determine the creditworthiness of an individual. FOIR is one such criterion depending on which an applicant’s disposable income and repayment capacity are calculated. 

Eligibility criteria for a home loan

Fulfilling eligibility parameters is important to improve the loan approval chances, hence simplifying the process. The eligibility parameters set by most financial institutions are as follows –

  • Employment profile:  A person can be salaried or self-employed to avail a home loan. 
  • Age: The age limit for salaried applicants is 23 to 62 years, whereas it is 25 to 70 years for self-employed ones.
  • Citizenship: An individual should be a resident citizen of India to opt for this loan. 
  • Work experience: A work experience of at least 3 years is mandatory for salaried individuals. Self-employed borrowers should have a vintage of 5 years or more in their existing business.

In addition to the eligibility criteria, candidates need to submit a few documents required for home loans to ascertain approval –

  1. Any identity proof out of PAN card, driving license, Voter ID, and Passport is critical for home loan application.
  2. Address proofs like electricity bill/water bill/telephone bill/valid passport/Aadhaar Card/driving license/voter ID. 
  3. For salaried individuals, the latest salary slips and bank account statements of the last 6 months are essential as income proof documents. 
  4. Self-employed borrowers need to submit document proof of 5 years of business continuation as it is a crucial criterion for home loan eligibility. 

Apart from the above factors, borrowers should also check their EMIs by using the home loan interest calculator for easy financing before applying for a home loan. 

Financial lenders, apart from making these tools available on their website, also bring pre-approved offers that can effectively streamline the application process for home loans, loans against property, etc. You can check your pre-approved offer by providing your name and contact number.

To summarise, with the help of a house loan calculator, one can find out the monthly liability and ensure if they can afford the same, thus eliminating the risk of defaults. By following the above tips, an individual can secure a home loan seamlessly and purchase their dream house.

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