5 Tips to boost your home loan eligibility

boost your home loan eligibility

With RBI’s decision to keep the Repo rate unchanged interest rate on home loans continues to be the lowest for almost a decade now. So here are the tips to boost your home loan eligibility and buy your dream home now.

Home loan lenders consider multiple criteria while evaluating home loan applications. Your application may get rejected when you fail to meet those. But by knowing the back end process of home loans and reasons for rejection you can improve the chance of approval and also boost your home loan eligibility in terms of amount.

Benefits of Availing Home Loan

If you are planning to buy your dream home through a home loan then 2021 is the ideal time for it as interest rates are low and property prices also stabilised.

  • Home loans is the biggest tax saving instrument as deductions available under sections 24, 80C and 80EEA of income tax act.
  • Home loans has the longest repayment time which could go upto 30 years. This reduces the EMI burden significantly.
  • Compared to other loans, Interest rates on home loans is very low.

Reasons for rejection:

While there are many ways to boost your home loan eligibility, You must also understand the key reasons lenders consider rejecting the loan.

  • Employment status: Lenders consider job stability as one of the main criteria for approving home loan. This is because your ability to repay your loan depends on your income. So the source of income has to reliable and consistent. If you have gaps in your employment or if you have switched your job recently you should be careful with the process and provide all necessary reasons and documents job change.
  • Property related Issues: If the property is not approved by the lender, Or other issues such as builder not approved by lender, title or valuation mismatch can also lead to rejection of loan.
  • Documentation: You must furnish all the necessary documents on time for smooth approval process, Accurate documentation can make the process easier.

How to boost your home loan eligibility?

Here are a few tips given by Mr Ratan Chaudhary – Head of home loans in Paisabazaar

1.Credit Score

A credit score is a primary filter the lenders use while evaluating the application. A credit score of 750 and above is generally considered as good by the majority of lenders. And those having poor credit scores have lower chances of approval.

Adopting healthy credit habits as timely repayments of existing loan EMI’s, Credit card bills, and monitoring co-signed loan accounts, maintaining the credit Utilization Ratio (CUR) within 30% can help you maintain a strong credit score.

2. Age of Borrower

Lenders prefer borrowers who can complete their repayment before retirement age unless you add your co-applicant to the loan. Those who are nearing retirement have a lower chance of approval. Such applicants can add young earning family members as co-applicant to boost your home loan eligibility.

3. Nature of property

The property for which a home loan is availed acts as collateral for the loan lender. So they consider the property’s title, location and age while evaluating. The application can get rejected if the property is too old which lacks saleability, Unclear titles or is un-approved by local authorities. So when you decide to get the home loan make sure you choose the right property.


Fixed obligation to Income ratio is the proportion of income currently being used to loan repayments. Most lenders prefer the range of 50-60 per cent, Lower the ratio higher the chances of approval.

If your FOIR goes up to 60 per cent or more it would be better to increase the eligibility by adding the income of co-applicant or by opting for a longer tenure which reduces your EMI. Remember you can always make part payments to close the loan earlier

5. Joint Home Loan

By adding an earning member of the applicant’s family as a co-applicant will reduce the credit risk and easier way to boost your home loan eligibility.

Looking for more ways to boost your home loan eligibility?

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