The Reserve Bank of India (RBI) has implemented multiple repo rate hikes, resulting in elevated interest rates for home loans. Consequently, acquiring a home loan has become more expensive than before, causing a decrease in the number of eligible individuals. Moreover, obtaining a higher loan amount has proven to be problematic in light of these interest rate increases.
However, in this challenging scenario, there are methods available that can assist you in securing a larger home loan amount. These strategies enable you to realize your dream of purchasing or constructing your ideal home. The loan amount is determined based on factors such as credit score and repayment capacity, in addition to other criteria evaluated by banks during the assessment process.
1. Prioritize maintaining a good credit score: A favorable credit score serves as a gateway to obtaining a higher home loan amount at a more affordable interest rate. Prominent banks, including SBI and HDFC, provide home loans based on the credit score of their customers. Experts suggest that a strong credit score enhances the likelihood of securing a lower home loan interest rate.
2. Extend the loan tenure: By opting for an extended loan tenure, you can decrease the home loan equated monthly installment (EMI), thereby enabling you to qualify for a larger loan amount. Requesting an increase in the loan tenure from the bank is a feasible solution.
3. Include a co-applicant: Involving a co-applicant can result in a higher loan amount being sanctioned. Banks are more confident in approving larger loans when two individuals share the responsibility of repayment. However, the eligibility of both borrowers will be scrutinized by the bank.
4. Augment the down payment: Increasing the down payment is another effective approach. If you possess sufficient savings, you can avail a larger loan amount by contributing a higher down payment. This action not only reduces your EMI but may also lead to a shorter loan tenure.
5. Reduce existing debt: Prioritize the settlement of outstanding loans and credit card debts before applying for a new loan. By eliminating existing debt, you enhance your chances of being granted a more substantial loan amount by the bank.
By implementing these strategies, you can improve your prospects of obtaining a higher home loan amount.
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