How To Increase Your Home Loan Eligibility?

When you apply for a home loan, the lender undertakes a detailed inspection of your credit history, monthly income, and other factors, and determines the interest rates and loan terms.

Most borrowers do not know that they can increase their home loan eligibility by taking a few simple steps. Read on to know the top-6 things an informed borrower does to increase their home loan eligibility and get the best terms and interest rates.

Six Easy Ways to Enhance Home Loan Eligibility

1. Apply For a Joint Home Loan

An excellent way to increase home loan eligibility is by adding a co-applicant with your loan application. It is better to add a family member whose credit score is above 800 and has a stable income source. Adding a family member with your application not only makes loan approval smoother, but may also enable you to apply for a higher loan amount.

2. Keep Your Credit Score Above 800

800 is a magical figure when it comes to home loan eligibility. Although it is not difficult to maintain a high credit score, most borrowers find trouble touching the number. The credit score is a reflection of your track record as a borrower. If your credit score is above 800, lenders consider your loan less risky and offer the lowest interest rates at attractive terms.

3. Keep an Eye on the Debt-to-Income Ratio

The debt-to-income ratio is the total debt you have accumulated proportionate to your income. For example, if you earn INR 50,000 every month and your net liability is INR 25,000, your debt-to-income ratio is 50%. The lower your debt, the higher will be your home loan eligibility. Hence, you should aspire to keep the ratio lower than 30%.

If, somehow, it is too hard to achieve, keep a healthy savings account balance, as a decent balance will prove that you have enough financial resources to repay the loan dues on time.

4. Choose the Right Lender

Technology has made home loan application easier. You can conveniently select the best lender by going through their profile online. PNB Housing, for example, offers doorstep service facility, and you do not need to visit the lender’s branch to apply for a home loan. Additionally, it offers flexible repayment plans and an extended loan term of thirty years. Hence, the right lender can make your home loan eligibility simpler.

5. Declare All Sources of Income

Indians investors prefer investing in fixed income instruments like fixed deposits. You may be earning a fixed interest income from your investments. Additionally, you may have rented out your property and receiving a decent amount every month. To increase your home loan eligibility, consider showing all sources of income to the lender.

6. Increase the Loan Term

Although most lenders offer a home loan term of up to thirty years, borrowers often prefer a shorter tenure, as it helps them become debt-free earlier. If you want to increase your home loan eligibility, consider choosing a long term. A long loan term decreases the EMIs and makes your loan seem less risky.


Besides the factors mentioned in this article, home loan eligibility also depends on age, property status, loan amount, etc. As an informed borrower, you should contact the lender and discuss the loan terms in detail, as knowing the loan terms in advance will help you increase your home loan eligibility.