For most, purchasing a property is a dream come true and one of the biggest milestones in life. And given the real estate prices in India, availing of a home loan is often the most convenient and affordable route to fulfilling this dream.
Most home loan lenders list strict housing loan eligibility criteria to protect themselves from defaults, and these can make it difficult for you to get loan approval. Hence, to secure approval without encountering hurdles, aim to improve your profile as a borrower before applying.
Here are 6 tips that will help you get quick and hassle-free approval on your home loan application.
Check the lender-specific housing loan eligibility criteria
Before you apply for housing loan, your primary concern should be to meet the eligibility criteria for the loan. Now, these can vary across lenders. For instance, one lender may ask for a minimum income of Rs. 30,000 per month, whereas another may demand that your salary be at least Rs. 40,000 per month. Similarly, age and property criteria may differ.
Maintain a high CIBIL score
Your repayment history as a borrower is of the utmost importance and a high CIBIL score is indicative of responsible borrowing behaviour. The higher your CIBIL score, the lower the lending risk. Most lenders look for a CIBIL score of 750 or higher for loan approvals. Home loans for applicants with lower scores may be approved, albeit against higher home loan interest rates. So, for easy approval and cost-effective borrowing, it’s recommended you work to improve your CIBIL score before applying.
Apply with a co-applicant
Applying jointly for a housing loan increases your chances of approval and reduces your risk as a borrower. A low credit score is often the reason for rejection, but a creditworthy co-borrower can help you secure home loan approval. This is also because there is a larger pool or income behind repayment in the case of a joint home loan. Another factor that makes co-applying a good idea is the tax benefits of a jointly owned property. Each co-owner is eligible for principal and interest tax deductions individually.
Maintain a low FOIR for approval
Your Fixed Obligation Income Ratio is calculated by dividing the sum of your debt obligations by your income. Insurance payments, current EMIs, credit card bills, rent payments, and more comprise your fixed obligations. Generally, lenders prefer that you keep your FOIR to 40%-50% or less. Thus, for fast home loan approval, it’s recommended you clear some of your existing debt before applying.
Prepare a sizeable down payment for the home loan
The loan-to-value ratio highlights the percentage of the property’s cost that your lender is prepared to finance. Beyond that, you must put down the rest. Now, when making this down payment you can stick to the minimum or pay more than what is required. For quick loan approval opt to make a large down payment. This reduces the principal amount and hence the lending risk. Moreover, you will be paying less interest this way.
Opt for the ideal repayment tenor
If your FOIR is high, lenders may prefer that you keep your EMI small, and this can require you to extend your tenor. Else, you risk being rejected. The home loan EMI calculator can help you arrive at an EMI that suits your monthly budget. However, do remember to keep your tenor as short as possible. For one, this minimises your net interest payment. Further, your lender may prefer a shorter repayment window as variations in home loan interest rates as well as your financial profile is easier to gauge over the short term.
Armed with the knowledge and understanding of the nuances that hasten home loan approval, you are prepared to make the necessary changes to your profile. Moreover, you can scout for a lender with lenient terms, and this is important to you benefitting from expedited loan processing. With the Bajaj Housing Finance Home Loan, you enjoy the benefit of swift loan approval thanks to the simple eligibility criteria and minimal documentation.
The Bajaj Housing Finance Home Loan provides funding of a substantial amount on cost-effective terms alongside attractive features such as a high-value top-up loan facility, the option of a comfortable repayment tenor of up to 30 years, and hassle-free processing. Best of all, when you apply for an Online Home Loan with them, you get a digital sanction letter in a matter of minutes. So, for hassle-free approval, apply online and look forward to funding your housing dreams without delay.
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