As per recent reports, the home loan market is predicted to grow by 22% between 2021 and 2026. This rapid growth can be attributed to factors like affordable interest rates and simple home loan eligibility criteria, making the credits accessible for both self-employed and salaried borrowers.
Typically, factors like age, income flow, credit score, financial obligations, etc., are assessed by lenders before loan approval. Individuals fulfilling these parameters can avail the funds without hassle.
Potential borrowers can determine if they can avail this credit by using a home loan eligibility calculator.
How to use a home loan eligibility calculator?
Individuals trying to evaluate their eligibility for a housing loan need to input these data in the calculator. Apart from date of birth and city, following are the parameters they will need to enter –
- Gross Income – In the top space, individuals have to enter their monthly income or salary.
- Loan Tenor – Underneath the income space, users have to select or drag the years they wish to avail the home loan for. This is a vital element that calculates one’s repayment capability.
- Existing EMIs – Here, individuals will need to provide information about the EMIs they are already servicing.
After filling in these details, the home loan eligibility calculator will compute the loan amount that the individual is eligible to borrow. Those finding this amount compatible can proceed with the loan application.
However, if one fails to secure the required amount based on his/her eligibility, he/she can implement certain techniques to improve the same.
How to enhance home loan eligibility?
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Perk up the CIBIL score
Applicants’ CIBIL score plays a vital role in the home loan approval process. This substantiates an individual’s creditworthiness and repayment capability. Typically, lenders prefer borrowers with a 750+ CIBIL score. Hence, potential home loan borrowers must improve this factor to secure affordable interest rates and premium facilities.
An effective way to maintain a high credit score is clearing the existing debts.
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Pay outstanding debt
Another method to enhance one’s loan eligibility is by maintaining a low debt-to-income ratio. This is possible by practising timely repayment and clearing the existing debts before making a new credit application.
They can use a home loan eligibility calculator to check the chances of availing a credit after paying off the dues.
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Prepayment
Making prepayments can increase borrowers eligibility and aid in better EMI and interest repayment. Individuals can use their bonus or surplus to repay the outstanding loan in a lump sum. This would significantly improve their credibility in a lender’s eye. They can use a home loan prepayment calculator for a structured payment.
Pre-payments can, however, attract additional charges which borrowers must take note of before applying. Few financial institutions do not levy any charges on this facility.
These financial institutions also extend pre-approved offers that can make availing the credits much easier. These offers are available on various financial products like home loans, loans against property, etc. You can check your pre-approved offer by providing your name and contact number.
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Joint loan facility
Co-application or joint-application can be an effective way to boost loan approval chances. Typically, a family member like a spouse, parent, son, etc., can be allowed to make a co-application. This method helps in gaining a higher loan amount and tax benefits on housing credit.
Many financial institutions offer exclusive benefits to women co-applicants. However, the spouses have to own the property for a successful application.
Practising the above mentioned ways can help a potential home loan borrower improve his/her eligibility. Moreover, he/she can confirm the loan approval chances by evaluating the results through a preferred lender’s home loan eligibility calculator.
