A boom in the retail sector has seen an immense increase in the home loan interest rates over the past 4 years. Home loan rates have doubled over the past 4 years. The present problem of inflation has also had a negative effect on the consumers as the fixed and the floating rate of interests have soared to an alarming degree. This in turn has certainly affected the loan eligibility for home loans in India. This has also lead to loan borrowers re-evaluating their options to avail new eligibility criteria.

At this time, it is important to understand how to enhance one’s home loan eligibility. Given below are some ways which can help in this Endeavour:

• Increasing the home loan tenure:

  The easiest method available to increase one’s home loan eligibility is by taking home loans for the Maximum Tenure. As an example, let us consider an individual who earns a monthly salary of Rs 60,000. He decides to purchase a house, and for that he buys a home loan. After deducting a monthly expenditure of Rs 35,000, the individual is able to save Rs 25,000. Undoubtedly, he will use his savings for repaying the loan in the form of equated monthly installments (EMI).

  Now, let’s consider that the installments for a home loan of Rs 1 lakh come at an interest rate of 12.5%. If the loan is taken for tenure of 15 years, the EMI calculated stands at Rs 1,232.50. For this data, his home loan eligibility will be 20.3 lakh.

  However, it is possible for the same individual to increase his home loan eligibility by around Rs 2 lakh if he can extend his tenure to 20 years. Assuming the same rate of interest i.e. 12.5% and now 20 year tenure on Rs 1 lakh loan, the EMI turns out to be Rs 1,136. Consequently, the home loan eligibility comes to Rs 22 lakh.

• Don’t rush towards a home loan:

  Less information is as harmful as wrong information.

  The importance of this statement lies in the fact that today there are many banks offering different varieties of home loans to individuals. Nowadays, almost every bank is offering a home loan with the repayment period of maximum 20 years. The next important thing to consider after the tenure is the rate of interest. For that reason, it is always advised, never to rush to purchase a home loan.

  It is better to carry out a research regarding the available home loan schemes and to study the market meticulously to make the best use of what many banks and housing finance companies are willing to lend before making a choice.