Lenders compute loan eligibility to ensure that the borrower can comfortably repay the loan amount, and reduce the probability of default.
Factors having a bearing on loan eligibility:
Ø Applicants with a stable income and steady job are preferred over people who switch jobs often
Ø Those close to their retirement years may find it difficult to get a long tenure loan. Younger borrowers are preferred by lenders
Ø If an applicant has a history of defaulting, his credit score is likely to be poor.
Ø Borrowers who have defaulted on their previous loans may find it very difficult to get a new loan sanctioned
Ø Education and financial position also have a bearing on eligibility
Enhancing eligibility
The simplest way to enhance loan eligibility is by clubbing your income with that of your spouse, father, mother or son. Joint loans enhance loan eligibility. If a husband and wife apply together, their combined income could be double, making their eligibility double too. Co-owners will be eligible for tax benefits separately on the home loan repayments in proportion to their shares in loan liability.
Managing finances
Clearing previous debts will allow a borrower to keep a sufficient chunk of his salary towards repaying the home loan debt. Avoid new debts. Clearing older debts like personal loans or credit card debt will make you eligible for a greater loan amount.
You can also enhance your home loan eligibility by opting for a higher tenure. The longer the loan tenure, lesser will be the monthly EMI burden too.
