While home loan interest rates have been rising recently, especially in the last month, they continue to remain attractive overall. For instance, current rates are still relatively low compared to the recent few years.
Being eligible for a lower interest rate home loan is easy but crucial, as lenders are particular about the applicant’s profile before disbursing the loan amount. This article helps you polish your eligibility to maximise your chances of being approved for your home loan
by walking you through the factors that affect it.
Factors That Affect Home Loan Eligibility
Your credit score is an important measure of your home loan eligibility that the lender will inspect before approving your home loan. A credit score is a three-digit number consolidating an individual’s financial profile, including their income, monthly liabilities, debt obligations, and repayment history, amongst other things.
A score of 725 and above is considered reliable and is likely to get more attractive home loan terms from the lender. Bajaj Housing Finance Limited offers home loans starting at 6.65%* p.a. to salaried and professional applicants with a credit score of 800 and higher, provided they meet the other eligibility parameters. A high credit score not only heightens your chances of getting a low interest rate home loan, but it may also mean that you could get a sizeable loan sum of Rs. 5 Crore* or higher, basis your eligibility.
Being able to establish a steady stream of income is an important aspect of your home loan eligibility
. It portrays you as a low-risk borrower, speaking well to your repayment capacity. Salaried and professional applicants such as doctors and chartered accountants stand to gain more on their home loans if they meet the lender’s minimum income criteria with the requirement of work experience and income stability.
Salaried individuals should show, preferably 3 years of work experience in a public or a private-sector office or an MNC, whilst professional applicants must have a preferable work history of at least 3 years in a registered facility or a practice, to be considered for a low interest rate home loan.
Lenders are more likely to offer competitive terms to those applicants who fall under the desired age bracket of their home loan eligibility criteria. Older applicants may find it harder to get low home loan interest rates, as the maximum age for a home loan is 62 – which is considered at the time of loan maturity. It could result in higher interest rates, lower sanction amounts or a shorter repayment tenor.
However, older individuals can still enhance their chances of lowering their home loan interest rate if they include a co-applicant with a good credit score or a guarantor in their application.
The home you have selected also plays a key role in determining your home loan eligibility. If your house is a new construction in a popular locality with modern amenities, you’ll be likely to fetch a home loan at a lower interest rate. However, the same may not be applicable if your property’s profile doesn’t meet the lender’s eligibility mandate.
How to Enhance One's Home Loan Eligibility?
You must meet the lender’s home loan eligibility criteria before making your home loan application, as it will lower the risk of being rejected.
It will also let you be surer of your application and avoid multiple applications to various lenders. Here are some things you can do to enhance your home loan eligibility.
- Boost your credit score: If your credit score is below 725, we recommend you do all that you can to bring it up to the lender’s benchmark. This could mean clearing off your outstanding debts, disciplining your monthly outflow and paying your bills on time.
- Prepare your repayment plan: With the help the Bajaj Housing Finance Home Loan EMI Calculator, you can prepare a tentative repayment plan, suited to your repayment capacity. The tool will help forecast a tentative EMI schedule, based on your income, desired loan sum and preferred loan tenor. This will help you make an application for a feasible loan amount with a repayment schedule that will not stretch you too thin.
- Apply with a co-applicant: If your profile falls just short, you can consider having a co-applicant with a strong eligibility to improve your chances of being approved by the lender.
A home loan is a big financial commitment that often stretches up to almost 30 years, so being able to meet all the eligibility asks is not only beneficial for the home loan interest rate you stand to get, but also important for you to get a home loan that suits your financial standing. Bajaj Housing Finance Limited’s minimal document and eligibility requirements make it quite easy for applicants to get a home loan on favourable terms from them. Consider borrowing from the lender for a hassle-free borrowing experience and quick disbursal facilities.