To apply for a home loan, knowledge regarding its eligibility is important to ease the application process. However, in some cases, meeting only eligibility parameters might not be enough for a home loan application.
Hence, before applying, it is important to follow some tips that will help a prospective borrower to qualify for this credit quickly.
Tips to qualify for a home loan quickly
Tip 1: Pay a higher down payment
While apply home loan, a higher down payment often fetches a lower home loan interest rate. Apart from that, if an applicant is paying a higher down-payment, the applicant needs to borrow less. This means less risk for the lender.
It should also be remembered that making a higher down payment will decrease the EMI value, as the total disbursed loan amount is less.
Tip 2: Maintaining healthy credit score
A good credit score enhances an applicant’s home loan eligibility, showing a prospective borrower’s creditworthiness. A CIBIL score of more than 750 proves a disciplined repayment habit of an individual.
Apart from these, it is also important to know how credit score can determine home loan EMIs.
Tip 3: Repaying existing debts
With a healthy credit score, it is also important to repay outstanding debts beforehand. A clean debt history will lead to quick home loan disbursal. It also portrays an applicant as a trusted borrower, and lenders are convinced to extend a sizeable loan amount.
Tip 4: Adding co-applicant
This can positively enhance an individual’s eligibility. When applicants apply for a home loan with an income on the lower side, this will minimise the rejection chances. Adding an applicant with an impressive credit score and history will boost the loan eligibility.
Individuals can also maximise the benefits with tax exemptions provisions on joint home loans.
Tip 5: Opting for a longer tenor
While filling up an application form, it is important to choose a tenor as per requirement. Although a shorter tenor will fetch less interest, opting for a longer tenor will decrease EMI and help repay loans easily. Additionally, there are ways to reduce your home loan tenor and EMI.
Tip 6: Adding additional income
Besides adding a co-applicant, mentioning additional sources of income will help increase the loan eligibility. This will help to fetch a higher loan amount for that applicant. In this regard, individuals can utilise the rental income, bonuses, incentives, etc.
Most lenders also advise applicants to calculate home loan eligibility beforehand for a smooth application process.
Additionally, knowledge regarding documents required for home loan will also make the application process easier. This will help an applicant to manage and collect all the documents beforehand.
List of documents needed for a home loan
1. Identity documents
- Aadhaar Card
- PAN card
- Voter ID
- Driving license
2. Address proof
- Any identity proof with a valid address
- Electricity bill
- Water tax and others.
3. Property documents
4. Bank account statements of last 6 months
5. Income proof
In India, several HFCs offer pre-approved offers to expedite the loan application process. These offers are available on selected financial products like home loans, loan against property and others. An applicant needs to enter their name and contact number to check pre-approved offers.
Hence, to qualify for a home loan quickly, it is important to check the above pointers. Keeping documents ready beforehand will also expedite the application process and disbursal.