Planning to buy a home? Then you must dig deep and do 360-degree research on home loan approval factors instead of focusing only on credit score. That’s because lenders might reject your home loan despite having a good credit score. Wondering why? A credit score represents your loan repayment capacity, but it fails to predict your future loan borrowing ability. Thus, they consider other factors too for instant home loan approval.
Now, you might be solving puzzles like how to get approved for a home loan? Or, despite having a good credit score, will I qualify for a home loan? Fret not! Consider these factors that determine your eligibility for instant home loan approval. Read on.
CIBIL report remarks
Often overlooked, this is one of the most critical reasons behind loan rejection. Reports generated by the CIBIL play an important role in helping you secure an affordable loan. However, if there are any comments like “written off”, “settled”, or “DPD” = Days Past Due in your credit report, lenders will take notice.
These comments pertain to your request for a lower interest rate mid-tenure, or late EMI payments, and can affect your credit score. The financial institutions consider these comments a warning sign and may go against the instant home loan approval.
Standing guarantor on a defaulted loan
Standing as a guarantor is risky, as it holds you responsible for paying debts on a borrower’s loan payments if he fails to do so. So, standing as a guarantor for someone else’s defaulted loan impacts your credit history negatively, which further leads to loan rejection. In that case, how to get approved for a home loan? Keep checking if the borrower is making repayments regularly or before standing as a guarantor, consider your future loan requirements.
Details matching with a defaulter
Financial institutions maintain records such as name, age, occupation, location, etc., of persons who have defaulted payments in their loan tenure. Suppose by mistake your entered details like address or location which accidentally match with a defaulter’s details when applying for a home loan; the financial institutions may reject your application, and you lose the chances of instant home loan approval.
Multiple loans
If you have multiple pending loans in your name, you might not get approved for a new loan, irrespective of your regular repayment history. For instance, consider you have a monthly salary of Rs. 80,000. The monthly EMIs you need to pay for borrowed loans is Rs. 60,000 (20K EMI per loan). So, you have Rs. 20,000 left for the monthly finances. In that case, financial institutions consider you overleveraged and incapable of paying the EMI of a new loan.
Poor tax-paying history
You should not worry about how to get approved for a home loan if you are paying taxes regularly. In contrast, a poor tax history adds to one of the reasons for a home loan rejection. Paying tax without fail shows your creditworthiness and repayment capacity to the lender, which improves your chances of home loan approval.
Generally, lenders prefer your application if you have been actively paying income tax regularly for two years before the loan application.
How to avoid loan rejection
Along with maintaining a positive credit score, taking care of these factors in advance will permanently stop questions like, will I qualify for a home loan? Or how to get approved for a home loan? These factors are –
Adding someone as a co-applicant to your application can ease your worries about how much would I qualify for a home loan and help you qualify for an affordable loan. How? Adding a family member with good credit history as a co-applicant increases your EMI affordability and thus increases the chances of your loan approval.
Showing additional income sources such as rental income, part-time business, etc., reflects your higher repayment capacity, thus increasing your eligibility for a home loan. It further answers your question how much would I qualify for a home loan?
Longer tenure assures low monthly EMIs, allowing you to pay debts on time, thus increasing your home loan eligibility.
However, if you’re wondering will I qualify for a home loan, it further depends on whether you fit into the home loan eligibility criteria. The standard eligibility criteria are given below-
- You should be between 24 to 64 of age.
- You should be a salaried or self-employed professional.
#1 For salaried
- You should have a minimum monthly salary of Rs. 30,000.
- You must have a minimum of two years of work experience.
#2 For self-employed
- You must have at least three years of experience in your current field.
After you satisfy the eligibility criteria, your next question may be how much would I qualify for a home loan? Well, financial institutions generally fund you between 75% to 90% total cost of your house.
Wrapping up
A complete analysis of these factors will help you improve your home loan approval chances. So, looking for instant home loan approval options to fund your dream home? Apply for a home loan at Tata Capital and enjoy interest rates starting at just 6.85%. If you want to know for how much I would qualify for a home loan, in your case, visit our website today.
02 July 2024
5 mins read
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