Back in 2017-18, 78% of all loan accounts created were housing loans under Rs. 25 Lakh. The implementation of the Pradhan Mantri Awas Yojana (PMAY) was one of the contributing factors to this eventful rise in the number of home loans availed.
NBFCs have also relaxed their home loan eligibility criteria and lowered interest rates to attract more customers, other than beneficiaries of PMAY. The ever increasing demand for housing in India has also led to the widespread necessity for these loans.
Housing market at a glance –
- Current housing market worth – Rs. 28 Lakh Crore.
- Expected worth by 2020 – $1 trillion.
- Average yearly demand – 12 to 20 million units.
Complying with the minimum eligibility criteria of housing loans increases your chances of availing these more comfortably.
Here are some of the ways to do precisely the same –
- Improve your credit score
The ideal CIBIL score for a home loan is around or above 750. Applying with a high CIBIL score increases your chances of approval as a high score makes you more creditworthy to the lender. Additionally, a higher rating also enables you to avail a lower rate of interest and other beneficial terms.
Hence, check your credit score before you apply. CIBIL lets you check your credit score for free once every year.
If not, you can avail one to improve it. However, make sure not to make multiple applications at once. Every credit application attracts a credit enquiry, which lowers your CIBIL score. Multiple such applications will have an adverse impact on your score.
You can apply for a secured credit card against a fixed deposit. Limiting expenses within 30% of your credit limit and paying the total amount payable within the due date will improve your credit score quickly.
- Arrange all the necessary documents
The home loan documents required to apply are minimal in case of NBFCs. The following is the complete list of documents you need for a home loan –
- Documents of the property to be mortgaged.
- KYC documents – Aadhaar, PAN, Voter ID, Passport, Driving Licence, etc.
- Address proof – Latest utility bill, house rent agreement, etc.
- Bank account statements.
- Latest salary slips or Form 16 (for salaried applicants).
- Proof of business (for self-employed applicants).
Bajaj Finserv is one of the NBFCs that provide Home Loans against only a few documents mentioned above.
They also bring you pre-approved offers that minimise the time taken to avail financing and help save time. Pre-approved offers come with home loans, personal loans, business loans, and an array of financial products. You can take a look at your pre-approved offer by providing only your name and phone number.
- Comply with the age and other requirements
You must be between 23 and 62 years of age to fulfil the home loan eligibility criteria. Additionally, you must also have a work experience of 3 years or a business vintage of 5 years.
- Reduce your Fixed Obligations to Income Ratio (FOIR)
Reducing the Fixed Obligations to Income Ratio (FOIR) or debt-to-income ratio also increases your home loan eligibility.
It is the ratio between your fixed monthly liabilities and income. The ratio that NBFCs prefer is 50% or less.
Some of the ideal ways to decrease this ratio are by paying off credit card debts, foreclosing any existing loan, etc.
- Apply for a joint home loan
You can apply for a joint home loan is you don’t comply with one or more of the eligibility criteria mentioned above. Applying for housing loans jointly increases your chances of application approval.
Moreover, all the applicants can claim the maximum income tax deductions under the different sections. For example, two borrowers can claim an exemption of up to Rs. 3 Lakh under Section 80C and up to Rs. 4 Lakh under Section 24(b).
These were some of the factors that affect your online home loans eligibility. Make sure to fulfil the same to avail a housing loan without any hassle.
Also Read: Factors to Consider to Calculate Your Housing Loan Eligibility Easily
