Home loan approval changes your life in many ways. It gives you a ray of hope since you can construct or purchase your dream house without worrying about money. Lenders offer various benefits on a home loan, prompting people to choose these loans over all other loans.
However, home loan approval is not as easy as it might seem. Since the loan amount is usually much higher than most other loans, lenders verify the documents and eligibility carefully before approving the loan.
Approving a home loan should be the easiest of decisions to make: either the borrower can afford it, or they can’t. But this isn’t how it works in practice. The value of money and credit changes through time. People go to very different lengths to get a loan approved.
The approval decision is made in a moment at the upper limit of a long-drawn-out process. Being able to anticipate how people will behave in the future, and interpret what they say with reference to.
Read this article if you want to know about five simple ways to increase instant home loan approval prospects.
5 Things You Can Do To Secure Instant Home Loan Approval
1. Evaluate Your Financial Condition and Repayment Capability
A home or housing loan increases your financial liability, the reason why lenders want to check your repayment capability. You need to prove to the lender that your income is sufficient to take care of the enhanced liability.
A home loan EMI comprises two elements – principal and interest, and you become liable to pay both. Some borrowers prepay a part of the unpaid loan principal early in the loan term to reduce the EMI burden.
A lender may evaluate various factors like monthly income, current debt level, debt-to-income ratio, credit score, credit history, etc. They may also check your bank account statement and Income Tax File. They scrutinize every aspect of the borrower to ensure that the loan does not become a bad debt.
Hence, before applying for a home loan, try evaluating your financial profile and select the right loan amount.
2. Try To Pay More Than You Can, as The Down payment
Indian lenders generally approve up to 90% of the home value as a loan. And the borrower needs to make a minimum of 10% as the down payment. But, some borrowers pay a little more than the mandatory down payment amount to reduce the housing loan interest rate and secure instant approval.
As an intelligent borrower, you can increase the down payment amount to 20% or 30% of the loan amount. A high down payment amount minimizes the lender’s risk.
Besides offering you a lower housing loan interest rate, the lender may also offer you better loan terms and instant home loan approval. A lower loan amount also means lesser EMI and better financial management.
Hence, try to pay a little more than what you are planning to pay as the down payment.
3. Monitor and Improve Your Credit Score
The credit score is a vital parameter that determines the housing loan interest rate and approval. The credit score speaks volume about your financial status and loan repayment history. Lenders look at your credit score, commonly known as CIBIL score, to analyse your repayment capability. If your credit score is above 750, you will have higher chances of loan approval.
Some best ways to improve your credit score are:
- Pay all loan and card dues in time.
- Clear all outstanding debt.
- Refrain from submitting too many loan applications.
- Keep your credit mix healthy.
Hence, a high credit score can enable the lender to expedite home loan approval.
4. Rope In a Co-Applicant
Sometimes, adding your parent or spouse to the loan application can increase the chances of instant home loan approval. If your parent or spouse has a decent income, the lender will add their income to your income and calculate the loan eligibility. This can increase the prospects of home loan approval considerably.
Hence, if you want to increase the chances of home loan approval, try to include another applicant and apply for a joint home loan.
5. Fill The Application Form Carefully
Although filling the application seems an easy task, many borrowers enter incorrect information in the form. When you enter incorrect information, the loan application may get rejected. Moreover, in some cases, the lender may bar you from applying for a new loan.
Hence, before filling the application form, you must check the loan terms and enter accurate data. Lenders usually approve a home loan instantly when the borrower has filled the application form correctly and submitted all documents required for a home loan.
Applying for a home loan can be seamless when you know these tips. Finding the best lender becomes crucial in determining your satisfaction level. The best lender offers transparent loan terms and the lowest housing loan interest rates.