Since the third quarter of FY2020, the real estate market has witnessed a steady revival with its residential sales. Moreover, Budget 2021 announced an extension of interest deduction on India’s housing loans for the next year has further boosted property demand.
To finance the purchase of a house, more individuals are availing of external credits by way of housing loans. Nonetheless, it is to be remembered that when it comes to loan applications, there are few things to consider for hassle-free approval.
A little homework at the beginning can resolve the issues of approval regarding housing loans in India. Following are some of the key points essential for prompt and hassle-free approval.
Important points to consider for faster loan approval
Before applying for home loans, make sure you take a look at these factors that can help you to plan your next steps –
1) Compare lenders
It is crucial for borrowers to stay well-informed about the lenders’ set home loan eligibility criteria before applying for a home loan. Home loan lenders usually lay down standard eligibility requirements. But there may be incidents where lenders set some unique criteria. Regardless of the set parameters, borrowers must meet them to eliminate the chances of rejection.
To avoid complications, borrowers need to look for suitable lenders that provide lenient criteria.
2) Maintain a decent credit score
One of the easiest ways to qualify for a home loan is to maintain a high credit score. A borrower’s credit score acts as evidence of his/her creditworthiness, and a score above 750 indicates that an individual has been consistent with past repayments.
Generally, with a good credit score and stable income, one can easily get his/her loan approved without delay. Some reputed financial lenders extend special offers on home loan interest rates and flexible repayment terms to applicants with a high credit score. This is an additional motivation to build one’s credit score and then apply for a home loan.
3) Check the documents required beforehand
With the application of a home loan, financial lenders follow strict protocols while verifying the documents required for a home loan. Any discrepancies or inaccuracies in the documents can result in loan rejection. Thus, it is essential to look through lender-specific requirements at the very outset.
Following is a list of documents required to apply for a home loan for the borrower’s convenience and better understanding.
- Identification proof
- Driving license
- PAN card
- Residence proof
- Age proof
- Birth certificate
- Income documents (inclusive of 6 months bank statement)
- ITR for the last 3 years, etc.
4) Include co-applicant
While applying for a loan, the co-applicant acts as an equal partner. By including a co-applicant, the chances of loan approval get higher if the applicant earns a sizeable income. This factor ensures lenders that a borrower can repay a loan on time even if his/her sole income does not qualify the eligibility parameters.
5) Make a substantial down payment
The easiest way to accumulate funds for a down payment is to take stock of the savings. A borrower needs to frame a budget, monitor monthly spending, and make an effort to curtail unnecessary expenses. This way, one can gather funds and make a substantial down payment to increase the chances of approval of a housing loan in India.
Apart from these factors, look for pre-approved offers extended by reputed financial institutions to their existing borrowers.
These offers allow individuals to avoid the hassle of application and documentation, as their essential documents are already submitted to the financial institutions. Prospective borrowers can quickly check their pre-approved offer by submitting the necessary credentials.
With these factors into consideration, individuals can proceed to make an application for a housing loan in India and enjoy swift approval.