5 ways to improve home loan eligibility

Like any other loan, money borrowed from banks or financial institutions for the purpose of buying a house, building, renovating or expanding a house is called a home loan. Everyone wants to have their own house. Own home creates a sense of security. Home loans are given by banks to any person only when the person fulfills the eligibility conditions of the banks. Lending firms check the eligibility of the borrower. It depends on many factors like your monthly income, previous loan etc. So through this article, we are going to tell you about 5 ways, with the help of which you can improve your eligibility and be eligible for a home loan.

Joint home loan

Joint home loan means deciding to take a loan with a partner. This partner can be your child, siblings, parents or spouse. A maximum of six co-applicants can apply for a home loan. By taking a joint loan, you become eligible to take a higher loan amount, as the bank considers the monthly income of all applicants. If the co-applicants also share ownership of the property, they can also take advantage of the tax deduction. Apart from this, there is no specific rule for how much each borrower has to pay. This means that there is flexibility in the payment of joint debts. This reduces the burden of debt on a single person. Many individuals can share the debt burden.

Credit score

A credit score is a measure of a person’s credit. A credit score is a three-digit number, which is calculated based on the previous credit history. This indicates your eligibility to repay the loan. It is used by banks and financial institutions to test your home loan eligibility. The higher the credit score, the better. If you want to create a high credit score, you should do the following –

  • Pay your current bank loan, previous loan and credit card monthly EMI.
  • Paying only does not improve the credit score, for this you have to pay on time.
  • Do not apply for a new credit card or loan until the old debts are repaid or in great need.

A credit score of 700 or more increases the eligibility for a home loan. A credit score over 750 is considered very good.

More down payment

A down payment is an initial payment the borrower makes to take advantage of a loan or credit. This affects the entire duration of the loan. If the down payment you make is high, then your dependence on the amount borrowed will be less. Also, there is a difference in the interest rate on doing more than a low down payment, because when you pay a large amount as a down payment, it reduces the lender’s risk. Along with this, your monthly installment also becomes less. This increases your borrowing eligibility in the future. By making more down payments, it is clear that you are financially able to pay the loan and this improves your eligibility for getting a home loan.

Long loan period

The loan can be repaid in 5 years, 15 years, 20 years or more. Just as the repayment period varies, so too does the interest rate and monthly EMI. The borrower is free to choose the loan term. In a normal situation, people often take a loan for a short period, as they want to get out of debt as soon as possible. However people tend to forget the benefits of long term as compared to short duration. The longer the loan term, the lower the monthly payment. This means that even if your monthly income is low, you will be eligible for a home loan. Youth starting their careers are also eligible for long-term loans.


The Fixed Obligations to Income Ratio – FOIR indicates the ratio of your income to your fixed liabilities or liabilities. Certain liabilities or liabilities are your debts. Therefore it is also called debt-to-income ratio. This eligibility criterion is often used by banks and financial institutions. According to this, your monthly installments are compared on your various loans or products with the new loan keeping in mind your monthly income.

For example, if a person spends half of his current income every month to pay off his existing debts, he will not be considered eligible for a home loan. In this case, you can increase the eligibility of home loan by paying your existing loans and reducing the foyer ratio. It is based on the fact that 50% of your income is required for your expenses and only the remaining 50% can be considered necessary to pay the loan.