Buying a home is a major milestone, and for most people, it requires financial support through a home loan. However, lenders do not automatically approve every application; they carefully assess your income, credit profile, and repayment capacity before determining the loan amount. If you want to borrow a larger sum or improve your chances of approval, you need to focus on enhancing your loan eligibility.
Fortunately, there are several smart ways to do this. Let’s explore practical steps that can help you increase your home loan eligibility and secure better terms from your lender.
What is Home Loan Eligibility?
Home loan eligibility refers to the maximum amount a lender is willing to sanction based on your financial profile. It depends on multiple factors, including:
- Monthly income and job stability
- Existing liabilities (other EMIs or credit card dues)
- Credit score and repayment history
- Age and remaining working years
- Property value and type
Lenders want assurance that you can comfortably repay the loan over the tenure. The stronger your financial profile, the higher your eligibility.
Smart Ways to Increase Your Home Loan Eligibility
1. Improve Your Credit Score
Your credit score is one of the most critical factors in determining home loan eligibility. A score of 750 or above shows that you are a disciplined borrower. Lenders may not only approve your loan more easily but also offer a higher sanction amount.
How to do it: Pay EMIs and credit card bills on time, keep credit utilisation below 30%, and avoid multiple loan applications at once.
2. Opt for a Longer Tenure
When you choose a longer loan tenure, your EMI reduces because the repayment is spread out over more years. This lowers your EMI-to-income ratio, making lenders more confident in your ability to repay. As a result, they may approve a higher loan amount.
Tip: Use an EMI calculator to find the right balance between tenure and overall interest cost.
3. Add a Co-Applicant
Including a co-applicant, such as your spouse or a family member with a stable income, can significantly boost your home loan eligibility. Lenders consider the combined income when calculating repayment capacity, allowing you to borrow a larger amount.
Additionally, if the co-applicant has a strong credit score, it enhances your overall profile.
4. Clear Existing Debts
If you already have multiple EMIs for personal loans, car loans, or credit cards, your repayment capacity is reduced. This lowers your home loan eligibility.
How to fix it: Try to clear smaller debts before applying for a home loan. This improves your debt-to-income ratio and signals financial discipline to lenders.
5. Show Proof of Additional Income
Many borrowers only declare their primary source of income, such as salary or business income. However, if you have additional income from bonuses, rent, or investments, providing proof can boost your eligibility. Lenders may consider this extra income when calculating your loan amount.
6. Choose a Reputed Lender with Flexible Terms
Not all lenders use the same eligibility criteria. Some may be stricter, while others offer more flexibility. Choosing the right financial institution can make a significant difference. For instance, Bajaj Finserv provides customised solutions, longer tenures, and balance transfer options to help you maximise eligibility while keeping EMIs affordable.
7. Keep Job and Income Stability
Lenders prefer applicants with stable jobs and consistent income. Frequent job changes or gaps in employment can raise concerns. If possible, maintain steady employment for at least 2–3 years with your current employer before submitting your application.
8. Consider a Step-Up Loan Option
Some lenders offer “step-up” home loans, where EMIs start lower and increase gradually in line with your expected income growth. This structure enables lenders to approve higher loan amounts, as your repayment capacity is projected to increase.
Things to Avoid While Applying for a Home Loan
Even as you take steps to increase eligibility, avoid these mistakes:
- Applying with multiple lenders simultaneously can temporarily reduce your credit score.
- Overstating your income, as lenders verify all documents thoroughly.
- Ignoring the fine print, especially on interest rates, processing fees, and tenure flexibility.
Why Bajaj Finserv is the Smart Choice?
When it comes to securing a home loan, Bajaj Finserv is one of India’s leading and most trusted lenders. Here’s why:
- High-value loans up to ₹15 crore to suit diverse property requirements.
- Flexible tenures of up to 40 years, ensuring affordable EMIs.
- Minimal documentation and fast approvals make the process seamless.
- Top-up loan options to access additional funds when needed.
- A comprehensive financial super app to manage loans, UPI, insurance, and investments all in one place.
With Bajaj Finserv, you not only maximise your home loan eligibility but also enjoy a transparent and hassle-free borrowing experience.
Conclusion
Increasing your home loan eligibility is about presenting a strong financial profile to the lender. By maintaining a good credit score, opting for a longer tenure, paying off existing debts, adding a co-applicant, and choosing a trusted lender, you can improve your chances of securing a higher loan amount on more favourable terms.
A loan should empower your dream of owning a home, not become a financial burden. With careful planning and the selection of reliable lenders like Bajaj Finserv, you can confidently achieve your homeownership goals while maintaining a balanced financial approach.
