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Major Parameters You Should Consider While Determining Your Home Loan Eligibility!
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Today, availing a home loan is easy. You just need to visit the lender’s website, check the requirements, try out the home loan calculator, fill out the application form, and wait for approval. You need not call several people or visit their branch multiple times to procure the information you need. Everything is available at the click of a button. However, this does not ease the requisites of availing a home loan. You can upload the documents online, but you still need to arrange all the documents, updated and accurate. Similarly, you must meet the home loan eligibility to avail the loan. The better you can meet the lender’s criteria, the better will be your loan deal. So, what are the parameters that you should consider while determining your home loan eligibility? Read on.
Your credit score reflects your creditworthiness and acts as proof of your repayment capacity. If you have a high credit score, lenders consider you a more reliable borrower. With a high credit score, your eligibility enhances and can get you lower interest rates and higher loan amounts. Hence, make sure to check your credit score before you apply for home loan. If it's not above 750, you might want to take steps to improve it before proceeding with the loan application.
Your age is a crucial parameter of eligibility determination. Usually, the maximum loan tenure you can avail is 20 years. However, the actual tenure that the lender approves depends on your age. If you are young, you can avail a longer tenure as you have more earning years ahead of you and better income surety. Typically, applicants who are close to retirement have low eligibility and could end up with a shorter tenure and low loan amounts.
Your employment status often helps the lender determine your income stability. If you are employed with an MNC or a public sector company, you are considered more reliable and likely to get better loan terms and interest rates. Similarly, if you have a stable business and substantial income, you can get quick sanctions.
You must meet the minimum income criteria set by the lender to avail the home loan. The eligibility criteria for income can differ based on the cities you live in. If you want a higher loan amount, you need to have a significantly higher income. Having a stable and high income means your repayment capacity is high and hence the chances of defaulting on EMIs are lower.
Lenders also review your debt obligation along with your income. If you have a high income but multiple loans, it can affect your eligibility. Lenders might be reluctant to lend loans to applicants who have multiple unpaid dues. If you have missed an EMI or have delayed EMI payments in the past, it can also affect your eligibility. You must keep your debt-to-income ratio below 30% to enhance your eligibility.
These home loan eligibility factors can significantly impact the loan amount and interest rates. Knowing the factors that affect your eligibility can help you get the best home loan from the lender.
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