A few tips to help you get a higher home loan amount
In the present scenario of tightening credit, banks have become more cautious while lending. The margins have increased. Banks need greater security. While arriving at eligibility for a loan, a bank looks at the ability of the borrower to repay the loan and the safety of the loan. The concern is whether the borrower would be able to repay the loan along with the interest as per the agreed time schedule.
The tools adopted by banks to assess borrowers are many and varied, and differ for different banks. The bank attempts to minimise its credit risk.
In order to be eligible for a housing loan, a number of factors are taken into account. Primary among them is the income of the borrower. Apart from income, age, number of dependants, qualifications, assets and liabilities, stability and continuity of employment, past repayment record etc are also considered to assess the repayment capacity.
There are a few ways by way of which you can enhance your eligibility for a loan. A bank recognises these additional sources of income and will club them with your income, thereby enhancing the eligibility for the loan.
These include:
OTHER SOURCES In the case of a salaried person, if he has some additional sources of income, they may be considered by the bank. The pre-condition is that the source of income should be regular in nature rather than being ad hoc or one-time.
SPOUSE’S INCOME In case your spouse has an income source, you should include her as a co-applicant. The additional income of the spouse will be included to enhance the applicant's loan eligibility. In case there are co-owners, they must necessarily be co-applicants.
If an individual is staying with his parents, the incomes of the parents may be clubbed, subject to certain conditions.
Some banks allow inclusion of a fiancee's income for sanctioning the loan along with the applicant's income. However, the catch is that the disbursement of the loan is done only after the applicant submits proof of his marriage.
ADDITIONAL SECURITY In some cases, if the applicant can provide additional security, he may have his loan eligibility enhanced. The additional security may include instruments like bonds, National Savings Certificate, fixed deposits and LIC policies. All these may also help enhance eligibility of the loan amount. Normally, investments in shares are not considered for this purpose.
TRACK RECORD In case the applicant has taken a loan from a bank in the recent past, the bank also considers the repayment record. A good repayment record also enhances the eligibility of the loan amount.
GUARANTOR Many banks waive off the requirement of having a guarantor. However, if you can provide a good guarantor, it will enhance your credibility with the bank and will thereby enhance the eligibility for the loan.
The final amount to be sanctioned will depend on the repayment capacity of the individual. This appraisal only sets the maximum limit which an individual can get as a loan. The amount that the applicant will be ultimately entitled to will have to conform within the limits fixed for each category of loan.
In the present scenario of tightening credit, banks have become more cautious while lending. The margins have increased. Banks need greater security. While arriving at eligibility for a loan, a bank looks at the ability of the borrower to repay the loan and the safety of the loan. The concern is whether the borrower would be able to repay the loan along with the interest as per the agreed time schedule.
The tools adopted by banks to assess borrowers are many and varied, and differ for different banks. The bank attempts to minimise its credit risk.
In order to be eligible for a housing loan, a number of factors are taken into account. Primary among them is the income of the borrower. Apart from income, age, number of dependants, qualifications, assets and liabilities, stability and continuity of employment, past repayment record etc are also considered to assess the repayment capacity.
There are a few ways by way of which you can enhance your eligibility for a loan. A bank recognises these additional sources of income and will club them with your income, thereby enhancing the eligibility for the loan.
These include:
OTHER SOURCES In the case of a salaried person, if he has some additional sources of income, they may be considered by the bank. The pre-condition is that the source of income should be regular in nature rather than being ad hoc or one-time.
SPOUSE’S INCOME In case your spouse has an income source, you should include her as a co-applicant. The additional income of the spouse will be included to enhance the applicant's loan eligibility. In case there are co-owners, they must necessarily be co-applicants.
If an individual is staying with his parents, the incomes of the parents may be clubbed, subject to certain conditions.
Some banks allow inclusion of a fiancee's income for sanctioning the loan along with the applicant's income. However, the catch is that the disbursement of the loan is done only after the applicant submits proof of his marriage.
ADDITIONAL SECURITY In some cases, if the applicant can provide additional security, he may have his loan eligibility enhanced. The additional security may include instruments like bonds, National Savings Certificate, fixed deposits and LIC policies. All these may also help enhance eligibility of the loan amount. Normally, investments in shares are not considered for this purpose.
TRACK RECORD In case the applicant has taken a loan from a bank in the recent past, the bank also considers the repayment record. A good repayment record also enhances the eligibility of the loan amount.
GUARANTOR Many banks waive off the requirement of having a guarantor. However, if you can provide a good guarantor, it will enhance your credibility with the bank and will thereby enhance the eligibility for the loan.
The final amount to be sanctioned will depend on the repayment capacity of the individual. This appraisal only sets the maximum limit which an individual can get as a loan. The amount that the applicant will be ultimately entitled to will have to conform within the limits fixed for each category of loan.
