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How To Improve Your Chances of Getting Approved For A Home Loan
How To Improve Your Chances of Getting Approved For A Home Loan
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CIBIL Score
by Deepika Sharma
Term Insurance
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Institutional Traders
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These days, most homebuyers avail of home loans to help them afford their by Sagar Shah
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It is, therefore, not very surprising that over the last few years, the number How to Unlock Your
of home loan applications that lenders receive each year has grown
Trading Potential with Po
exponentially. This has led to lenders becoming extra cautious about
Capital
choosing the right borrowers. From a lender’s perspective, the right
by Jessica Patil
borrower is one who will pay loan EMIs on time and does not pose the risk
of monetary loses to the lending company. Lenders, these days, assess all The Pros and Cons of
home loan applications carefully and if they are even slightly unsure of a Different Types of Credit
borrower’s repayment capacity, they reject their home loan application
Cards in India
immediately. Housing loan rejections must be avoided at all cost as they
by Deepika Sharma
reduce a borrower’s chances of availing of a loan even in the future.
How to Invest in ETFs as a
Lenders asses a borrower’s repayment capacity and creditworthiness by Beginner? Is ETF Investing
analysing their home loan eligibility. Lenders assess an applicant’s eligibility
Safe?
based on several factors, such as their age, income, CIBIL score, etc. If a
by Sagar Shah
borrower’s eligibility is low, chances are their loan application will get
rejected. The good news, however, is that it is possible to enhance one’s Top 10 – Best Tools to
eligibility and increase one’s chances of getting approved for a loan. Read Leverage in Your
on to know how.
Investment Company
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by Kiran Mehta
Table of Contents
1. Tips on How to Improve One’s Chances of Home Loan Approval
1.1. Work on Your Credit Score
1.2. Check Your Home Loan Eligibility
1.3. Reduce Your Debt-to-Income Ratio
1.4. Add a Co-Borrower
2. Final Words
Lenders try and understand whether a borrower will be able to repay their -
loan or not based on many different factors and the most important of these
factors is the credit score. Reliance Inds HDF
C
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Credit rating agencies around the country assign credit scores to borrowers
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based on different factors, such as their repayment history, credit utilization
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ratio, credit mix they have and credit applications they have made.
If you want to improve your chances of home loan approval, make sure your
credit score is at least 750. If your credit score is below 750, better it first
and then apply for a loan.
Note: In India, the terms CIBIL score and credit score are used
interchangeably but they are different. All credit rating agencies assign
credit scores but TransUnion CIBIL, which is the country’s most popular
agency, calls the credit score it assigns to borrowers CIBIL score.
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Further, very often, housing loan applications meet with rejection when
applicants apply for a loan amount much higher than what they qualify for.
Home loan applicants must use a housing loan eligibility calculator to figure
out the loan amount they qualify for and apply for this loan amount only or
something lower to improve their chances of loan approval.
Add a Co-Borrower
If you think your loan application will meet with rejection due to reasons
such as a low credit score or your willingness or need to avail of a housing
loan amount higher than what you qualify for, then you can enhance your
chances of loan approval by adding a co-borrower.
When two or more people apply for a housing loan together, lenders assess
their combined home loan eligibility. So, for instance, if your home loan
CIBIL score is below 750 and you add a co-borrower whose CIBIL score is
800 or above, your lender will check your combined CIBIL score and take
that into account while deciding whether or not to extend a loan to you.
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Similarly, if your income is low and does not permit you to borrow the
amount you wish to borrow, do not worry. Add a co-borrower whose income
is good enough to make you eligible for the loan amount you desire.
However, do remember to explain to your co-borrower their roles and
responsibilities as a co-borrower is as responsible for loan repayment as
the primary borrower. Thus, one must take on this responsibility very
carefully.
Final Words
It is not difficult to get approved for a housing loan. However, keeping the
things mentioned in this article will not only help a housing loan applicant
enjoy quick home loan approval but also allow them to avail of lucrative loan
terms and conditions, such as low home loan interest rates, longer
repayment tenor, etc.
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