A housing loan is a basic financial product which allows an individual to purchase a residential property. For a successful application, you need to possess more than just a good credit score. Although it does play a pivotal part, there are criteria you need to meet as well to avail a housing or home loan. Use a housing loan eligibility calculator to determine the requirements you need to fulfil.
Apart from checking the eligibility and the documents required, there are other aspects which a lender considers. Here are 5 easy tips to improve your chances of getting a home loan.
1. Check Your Credit Rating
Maintaining a good credit score determines your home loan eligibility criteria significantly. Most lenders demand a CIBIL score of 700 or higher as a basic eligibility for a housing loan. The CIBIL score determines your loan repayment capability. A poor credit score indicates you are a risky borrower to lend the funds. On the flip side, high credit scores and a clean credit repayment history boosts your chances to avail a housing loan.
2. Proof Of Repayment Capability
A stable income and employment history is one of the most vital parameters which lenders ask for high value credits such as home loans. Any financial institute will ask for your income statements for the past year. Other documents required for a home loan include.
- Salary slips for last 3 months along with income tax returns for the past year in case of salaried professionals.
- Self-employed individuals must provide the proof of their business establishment and an audited balance sheet from 3 years by a CA.
However, you can avail a housing loan from NBFCs of up to Rs.5 Crore with minimal documentation and easy-to-meet eligibility criteria. Along with these benefits, you can also enjoy the lowest interest rates and a flexible repayment tenor of more than 180 months as per your repayment capacity. Also, you get the advantage of no additional costs on part-prepayment of loan and foreclosure facility.
3. Cut Down Your Financial Commitments
Financial commitments, along with personal debts, adversely affect your chances of approval of a housing loan. Existing loans can severely downplay your chances for an approval. Multiple credit enquiries also prove detrimental for the credit score and negatively affect the chances for approval For more information, drop by at Daily Prosper
4. Produce A Decent Savings History
Savings serve 2 purposes when availing a housing loan.
- The savings can add to your contribution to the purchase, i.e. the down-payment when you avail the loan.
- Accumulated savings can help you part prepay a section of the home loan.
If you use your savings for a larger down payment, you deem yourself as a credible borrower upon which the lender may reduce the interest rates on the loan. Irrespective of whether you get to enjoy lower interest rates, you are sure to enjoy either a lower tenor or EMI or both depending on the amount of down-payment you make.
5. Disclose All Necessary Information
While applying for a housing loan, you must disclose all the relevant information. If your lender uncovers credit card debts or other dues, your home loan sanction might be halted. Non-disclosure of information such as existing debt technically reduces your repayment capability to the lender as well as your credibility.
Apart from using a housing loan eligibility calculator, you can follow these to get one step closer towards availing a housing loan. Refer to top lenders to avail the best interest rates as well additional beneficial features.
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