As per a record, near about 65% of total consumers of India tend to choose online purchasing of both services and goods. The preference for digital transactions has only thrived over the past few months. Additionally, the cashless economy project of the government has also played a vital role in this digitisation drive.
Availing a loan is no different. Nowadays, individuals also prefer to obtain home loans via online platforms than visiting the lender branches physically.
The terms and conditions, policies, and benefits of housing loans are different across lenders. However, with improved e-home loan eligibility criteria, applicants can procure an advance more easily and with beneficial terms. The following discussion can help borrowers improve their eligibility for e-housing loans efficiently.
- Pay off all current debts
While offering an e-home loan, lenders measure the default risk by calculating the debt-to-income ratio of applicants. This ratio suggests the portion of borrowers’ monthly earnings that is assigned to repay the fixed monthly dues such as credit card bills, other loans EMIs etc. Therefore, if applicants have previously availed any advance facility and are still repaying, it can affect their qualification for a new e-housing loan.
So, ideally, individuals should prioritise repaying and closing all existing credit accounts and avail the loan closure certificate from financers. Afterwards, they should also ensure updating their lender with this new information to improve e-home loan qualification.
- Take steps for credit score improvement
Improving credit scores can be easy if borrowers are consistent with a timely credit card and loan repayments. So, before knowing how to calculate home loan eligibility, individuals should be aware of the following factors that can help increase the rating –
- Payments of the monthly credit card outstanding in full and loan EMIs before the due dates helps create a creditworthy impression. So, individuals should consider timely repayments in the first place.
- They can also go for less consumption of credit limit by keeping it within 30%.
- Individuals can avoid applying for multiple debt tools as every new application invites hard credit inquiry that can reduce the score.
- An extended debt record of timely repayments represents borrowers’ responsible credit behaviour for a longer period. So, owning and maintaining an old credit card, long-term loan accounts, etc. can be beneficial.
- Periodic checking of credit records for accuracy may also contribute to the improvement of CIBIL score.
- Consider co-application
Another most common way to enhance e-home loan eligibility criteria is to opt for a joint application. From a lender’s perspective, co-applications cut down the financial risk of defaults. Moreover, applicants can also be benefitted with additional tax rebate if applied jointly. Therefore, if individuals can apply with an eligible co-borrower, the chances of securing an e-home loan become higher.
- Take a step-up e-home loan
Typically, home loans offer flexible tenor that can extend up to 20 years. So, individuals can avail an extended period to repay the advance if applied during their early ages. However, during the early ages, borrowers may find it tough to pay hefty EMIs.
So, step-up loan facility can be utterly useful for young professionals. It allows them to avail advance with lower initial EMIs that can be increased over time with an expectation of income increment. Nevertheless, it is an option that leaves borrowers with a higher debt burden in the later years. So, you must decide on such advances only after making necessary assessments.
- Submit additional income proof
As income threshold is a vital determinant of individuals’ qualification for housing loans, they should aim to back their application with all earnings avenues available. These additional incomes can include rental earning, business profits, investment returns, etc. Along with the traditional income documents required for an e-home loan, if borrowers can produce documents of additional earnings, it can signify better eligibility.
- Apply for an extended home loan tenor
A relatively extended tenor helps to keep the EMIs affordable. So, similar to the previous way, an extended tenor can help keep the debt-to-income ratio as well. However, individuals should know that longer tenors accumulate higher total payable amount. So, before opting for an extended tenor, individuals should assess the impact on their finances mindfully.
To take such advantages, individuals should consider lenders that offer tenor flexibility to borrowers alongside simple e-home loan eligibility criteria.
Furthermore, such lenders also introduced pre-approved offers for quick and convenient loan processing. Multiple financing options like loans against property and home loans come with these offers. Individuals can check their pre-approved offer online by entering their contact number and name. Pre-approved offers will make you get sanction letter of home loan easily and early too.
One can improve their eligibility with the methods explained earlier. Such an increase also reduces the chances of application denial. Moreover, applicants should know how to calculate home loan eligibility in just a few clicks so that they apply for an e-home loan with a suitable profile.