Home Loan Application Rejected? Here’s How You Can Boost Your Approval Chances

Many individuals dream of becoming a homeowner. However, owing to the rising land costs, just a minute percent of individuals realize this dream. Worry not. Now, you can easily turn your dream of becoming a homeowner into reality early in your work career by opting for a home loan.

But the question is – Is it easy to avail of a home loan? No, it is not. Lenders lay a lot of stringent eligibility parameters. You require enhancing your eligibility to avail of a home loan. In other words, to qualify for 20 lakh home loan EMI or 35 Lakh Home Loan EMI, you must adopt certain parameters/habits, which help to boost your home loan approval chances. Read on to know the 8 best ways to increase your eligibility chances for a home loan.

Best 8 ways to enhance your approval chances for a home loan –

Opt for a higher repayment tenure

The loan repayment tenure is important for deciding your eligibility for a home loan. A higher repayment tenure equates to smaller EMI repayments. And it is even simpler to repay your debts when there is not a lot of burden, strain, or pressure on your funds. Longer tenures even endow your financiers with the impression of low home loan default rates. As an outcome of low credit risk, home loan approval chances are high. There are few other benefits of opting for a higher repayment tenure. It offers you great repayment flexibility and few tax benefits.

Go for a joint home loan.

A joint home loan is a prudent choice if you think you are incompetent at meeting the minimum eligibility criteria of the lender. As per this arrangement, the joint earnings of both home loan applicants are considered. Note that a co-applicant can be a parent, spouse, or any close relative. The sole parameter is that additional loan applicants must have a constant and steady income flow and a good credit history. Perks of being a joint home loan are not just confined to increasing your eligibility for a home loan; and there are others –

∙ Joint home loan provides higher tax benefits. Based on this case, both home loan applicants can file separately for tax exemption. Section 24b and Section 80 C of the IT Act deal with home loans.

∙ In case your spouse is a home loan co-applicant and co-owner of the home, you may maximize loan benefits. Women co-applicants are eligible for lower interest rates.

∙ In the case of a joint home loan, both applicants are accountable equally for meeting the dues. Thus, it considerably takes away your debt burden.

Clear off your prevailing debts

Home loan eligibility requirements often are stricter. Usually, lenders are cautious when lending you if you have multiple outstanding debts. Owing to multiple outstanding debts, you may face difficulty in repaying the dues in the future. Thus, you must ensure to repay your debt much before placing an application for a home loan.

Go for debt consolidation if you hold multiple outstanding debts with extremely high-interest rates. Clearing off your dues before filing an application for home loans makes you creditworthy and permits you to take up the home loan offer of your choice with ease.

Also Read: Best Home Loan Interest Rates

Work on ameliorating your credit score and history

A credit report is a major key to unlocking a low-rate home loan. Credit reports are formed after factoring in different parameters. Few of these parameters involve debt repayment history, prevailing dues etc. A lender may not approve your application for a home loan if you hold a low or zero credit history. Generally, a score equaling 750 or more is looked upon as a suitable deal for a home loan. Anything below this makes your credit profile riskier. Ensure to work on ameliorating your credit score or history to increase your eligibility for a home loan.

Listed below are a few of the most important ways to ameliorate your credit score –

∙ Ensure to place reminders and repay your outstanding dues on time in full.

∙ New to credit individuals must look for credit cards, durable consumer loans or any other short-term loan as per requirement and suitability. This helps them establish credit.

∙ Clear off your past loan defaults.

Declare your income sources

Having a diverse income source is no longer considered a luxury; it is nowadays a need. Many of you think that when assessing your credit, lenders usually just look at your primary income source. However, it is a major misconception. The more income source you have, the higher your chances of availing of loan approval. You should furnish evidence of secondary or additional income sources to ameliorate your home loan approval chances. Few common additional or secondary sources of income involve earning from your part-time business, rental income, freelancing and others. Earning secondary income even helps in availing a high loan amount.

Enhance your down payment amount

Even while home loans are secured in nature, lenders still look at keeping the disbursement as low as possible to reduce the credit risk. Down payment is the amount that you put down at the time of availing of a home loan. Generally, lenders offer home loans for LTV (loan to value) of as high as 80 percent. This means if the home you are purchasing costs around Rs 50 lakh, you must pay a down payment of nearly Rs 10 lakh from your pocket. The lender will fund the balance of Rs 40 lakh. However, LTV percent wholly depends on your credit profile. Enhancing your down payment enhances your eligibility for a home loan if you hold an average credit profile.

Select your home loan lender wisely.

No matter whether it is in reference to eligibility parameters or rates, every lender comes with distinct offers. You must ensure to review the qualifying parameters of different lenders. For this, you can even use a home loan calculator.

Avoid a constant business or job switches.

Lenders review your profession and job stability before disbursing your home loan. Constant job switches endow you with the impression that your monthly income is not adequate to cover your necessity. Thus, if you want to avail a home loan, begin planning much before. Decide your lender before and check the employment continuity preference by the lender for home loan approval.


Delving deep beneath the surface, Jason unveils the mysteries of the aquatic world. At fishyfacts4u.com, he casts light on the obscure, sharing revelations and wonders from the watery depths.

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