Unlocking your Dream Home: 5 Proven Ways to Improve your Home Loan Eligibility

Bajaj Finance Home Loan

In India, many financial institutions, including both banks and non-banking financial institutions, offer substantial home loan amounts to turn this aspiration into reality. Securing a home loan and obtaining favourable terms is possible only upon meeting a few eligibility criteria. The road to obtaining the keys to your dream home depends on factors such as credit score, income, employment status, and age - each playing a pivotal role in determining your eligibility for a home loan.

Why improve your eligibility

The eligibility criteria for a home loan serve as a precaution for lending organisations against potential defaults. Improving your eligibility bears multiple advantages:

1. Access to a bigger loan amount: Fulfilling the home loan eligibility criteria can potentially qualify you for a bigger loan amount. This translates to the ability to purchase a premium property in a prime location without financial constraints.
2. Favourable interest rates: It also often translates to lower interest rates. A lower interest rate significantly reduces the overall cost of borrowing, resulting in substantial long-term savings. The money saved can be channelled towards investments, other life goals, or securing your retirement.
3. Expedited approvals: Strengthening your eligibility expedites the loan approval process. Proactively working on improving your eligibility before applying ensures quicker loan access. This streamlined process not only saves time but also offers peace of mind during the home-buying journey.
   
   

Top 5 ways to improve your eligibility

If you find yourself falling short on the home loan eligibility criteria, fret not. Here are five effective strategies to boost your eligibility and secure the funding needed for your dream home:

1. Boost your credit score: A high credit score is a key factor in securing a home loan. Maintaining a credit score of 750 or above signifies a healthy credit history, positioning you as a low-risk borrower. One of the ways to boost your credit score is by using your credit card responsibly. Paying your credit card bills on time in full, timely EMI payments, keeping the credit card utilisation between 35%- 40% are some of the factors. If you don't have a card already, you can get a credit card with a lower limit.

2. Apply with co-applicants: Adding a co-applicant in your home loan application helps improve your eligibility. Opting for a joint home loan, especially with a family member possessing a favourable credit score, increases your EMI affordability, ultimately qualifying you for a higher loan amount. Some lenders even consider the combined income of an entire family, providing eligibility for bigger loans at attractive interest rates.

3. Choose the right tenure: The choice of a home loan tenure can significantly influence your eligibility for a home loan and the terms of your loan agreement. The home loan tenure refers to the duration over which you will repay the borrowed amount along with the accrued interest. This decision can have implications on your monthly EMI (Equated Monthly Instalments), total interest paid, and ultimately, your eligibility to secure the home loan in the first place.

4. Big down payments: Making substantial down payments is an effective strategy to make home loans more affordable. While lenders typically finance up to 90% of the loan-to-value ratio, making a sizable down payment demonstrates financial commitment and reduces the risk of default.

5. Declare additional income streams: Highlighting all sources of income, beyond your primary salary, boosts your eligibility. Supplementary income, such as rental or freelance earnings, reinforces your repayment capacity. This additional income can substantially increase the loan amount you qualify for.

You can use our home loan emi calculator to check your home loan emi amount depending on your city, monthly income, and monthly obligations if any.

Embark on the journey with Bajaj Finance Home Loan

Bajaj Finance simplifies the home loan eligibility process, catering to both self-employed and salaried individuals with a credit score of 750 or above, and a steady income. Basic age and work experience parameters are also considered, ensuring a hassle-free eligibility process. With Bajaj Finance Home Loan, borrowers can access loans of up to Rs. 15 crore, starting at an attractive interest rate of 8.50% p.a.

Securing a home loan and unlocking the doors to your dream home requires meticulous preparation. By enhancing your eligibility through a high credit score, co-applicants, repayment tenure, substantial down payments, and declaration of supplementary income, you can access a higher loan amount, favourable interest rates, and expedited approvals.