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Increase Existing Home Loan Amount

Lending institutions usually decide the quantum of loans depending on an applicant’s profile and eligibility. Every bank or finance company approves Home Loan applications based on certain parameters, such as credit score, age, income, existing liabilities, employment, etc. This also helps them determine the loan amount that can be sanctioned. In some cases, applicants may secure approvals for much lower principal sums than expected which could potentially hinder their property purchase plans.

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Ways to Increase Your Home Loan Amount

When you seek a bigger loan amount, here are a few things that should be kept in mind:

1. Maintain a Good CIBIL/Credit Score

Upon receiving a Home Loan application, lenders will first check the credit score to assess an applicant’s creditworthiness. Generally, a good score of 750 and above is a pre-requisite for availing of higher loan amounts along with competitive interest rates. Individuals should always ensure timely loan repayments to achieve an excellent credit score. If you pay your credit card dues and monthly instalments on time, it reflects positively on your credit records. On the other hand, repayment delays or defaults will affect your credit score adversely. A low credit utilisation ratio also benefits your credit profile.

2. Consider Joint Home Loans

Co-borrowing is an effective way to increase your Home Loan amount. When you apply for a housing loan with a family member, who has regular sources of income and an ideal credit score, it not only fetches a preferential loan principal but also eases the repayment burden, maximises tax benefits and increases EMI affordability.

3. Extend the Home Loan Tenor

A heavier loan amount warrants a longer repayment tenor. Hence, lenders usually sanction a higher principal with flexible repayment tenors to enable comfortable EMI pay-outs and minimise the risk of loan defaults. However, an extended tenor raises the total interest component. So, factor in the increased cost of borrowing before choosing this option.

4. Clear Other Credit Liabilities

Lenders may doubt the repayment abilities of individuals who already have prior credit obligations. Therefore, clear all existing liabilities or keep them to a minimum if you wish to increase the Home Loan amount.

5. Include Additional Income Sources

Adding other sources of earnings, such as rental income, part-time business, etc., can augment your loan amount. It also boosts your FOIR underlining a sound repayment capacity.

6. Opt for a Hefty Down Payment

Lenders normally provide housing finance up to 90%* of a property’s value, while the rest of the cost must be borne by the borrower. A heavier down payment can get you larger loan amounts with a significant reduction in the interest outgo.

7. Avoid Changing Jobs

Salaried individuals who wish to apply for a housing loan should avoid frequent job changes, which could hurt the loan amount that they seek. Most lenders require at least three years of continuous service in an organisation to pass loan eligibility.

The pointers mentioned here will assuredly elevate your chances of securing a bigger loan amount with flexible tenors and favourable terms. But before proceeding with the loan application, take some time to thoroughly research and compare the different loan offerings in the market. This will help you select the right lender for you. One can access the online Home Loan EMI Calculator to simplify this task. You may also use a Home Loan Eligibility Calculator to check your eligibility for the desired loan amount.

*Terms and conditions apply.

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