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unikadmin
- April 11, 2025
Introduction
Most of us share the dream of being able to purchase a new home. However, making this dream happen, begins by securing a suitable home loan. One of the most significant factors in determining whether your loan application is approved and at what rate is your eligibility for home loans. Here are some actionable steps to help you increase your eligibility to purchase a home with a loan:
1. Have a Good Credit Score
When assessing your application, lenders will always check your credit score first. Generally, a credit score above 750 is a good number and, it will positively increase your chances of being approved for a loan.
How to improve your score:
Make timely payments to your credit card bill and your EMIs.
Try not to use your entire credit limit.
Stay away from applying for more loans or credit cards.
2. Disclose all Income Sources
Your income will ultimately decide the loan amount you receive eligibility for home loan. When determining what income you’ll want to claim, don’t just consider only your main job salary.
If you’re engaged in freelancing, earning rental income, or investing in any other category as an additional income layer, this should be reported when submitting the application. Declaring all forms of income provides the lender with a complete picture, allowing for better analysis of your repayment capacity.
3. Eliminate Existing Debt
The lower the debts you have, the better. Outstanding loans and balances on credit cards can negatively impact your overall eligibility for home loans.
Lenders look at monthly debt payments balanced against your income which includes calculating Debt-to-Income (DTI) ratios. Before seeking approval for a home loan, try to close any loans that fall into lowest payment brackets.
4. Apply for a Longer Loan Term
With regards to home loans, the longer the loan duration, the lower the monthly EMI amount, which indicates you would be being more engaged in a manageable repayment plan. Lenders of home loans prefer the lower EMI amount to provide you less financial burden.
5. Apply with a Joint Applicant
Adding a joint applicant (your spouse or parent with a steady income) can enhance your eligibility for home loans. The overall income can also help you apply for a higher amount of loan and better terms.
6. Maintain your Financial Documents Current
Make sure that all your income proofs like bank statements, ITRs, and employment records are right and current. Having all your documentation in order builds credibility and can make your approval process go faster.
7. Select the Best Lender
Each lender offers different eligibility criteria. Research lenders and compare offers from different banks or NBFCs before you apply. Sometimes selecting the right lender is the difference in being approved.
Final Thoughts
Improving your eligibility for home loans will plan and demonstrate that you’re a responsible borrower. With a good credit score, income, and habits, you have amazing odds of getting approved and can obtain a better interest rate.
Are you ready to apply for your dream loan?
Then, Unik Finance is there to confidently take your first step.