4 Simple Tips to Get a Higher Loan Amount on Your Home Loan

Securing a Home Loan that meets your financial needs often depends on your eligibility and repayment capacity. Whether you are a first-time homebuyer or planning to upgrade, the loan amount you qualify for can influence your property choices significantly.  

So, if you are wondering how to get a higher loan amount, this guide will take you through practical ways to increase your Home Loan eligibility while staying financially secure.  

Factors That Influence Your Home Loan Eligibility

Before a lender sanctions any Home Loan, they run a detailed check to assess your financial profile. Understanding what they evaluate can give you a head start, especially if you are aiming to qualify for a higher loan amount. Here are the key factors that usually come into play: 

Your Monthly Income

This is the foundation of any eligibility check. Lenders review your earnings to estimate your repayment capacity. Naturally, a higher, stable income improves your chances of getting a larger loan.  

Your Age

Age plays a key role in determining both the loan amount you can borrow and the tenure over which you can repay it. Younger applicants may secure higher loan amounts and longer tenures to repay the loan compared to applicants nearing retirement age.  

Your Existing Obligations

Already paying EMIs for other loans or credit cards? This can affect the loan amount you can qualify for. Lenders calculate your FOIR (Fixed Obligations to Income Ratio) to assess how much of your income goes towards paying off existing debts. Lower FOIR may translate to better eligibility. 

Your Credit Score

Your credit score represents your creditworthiness. A score of 750 or above may increase your chances of securing a higher loan amount.  

Let us walk through some effective ways to get a higher Home Loan amount.  

Tip 1 – Add a Financial Co-Applicant to Strengthen Your Profile

This can be one of the most effective ways to increase your Home Loan eligibility. When you apply with a financial co-applicant, you essentially combine both incomes. This can improve your repayment capacity and help you secure a higher loan amount. 

Keep in mind that the co-applicant shares equal responsibility for repaying the loan. So, it is important to choose someone who has a steady income and a good credit record. 

Tip 2 – Improve Your Credit Score Before You Apply

Your credit score is one of the first things lenders check when assessing your Home Loan application. A high score not only reflects your repayment discipline but also improves your chances of getting a higher sanctioned amount. 

Typically, a credit score of 750 or above often leads to better loan terms, a lower interest rate, and a higher loan amount. 

Before applying, it is a good idea to check your credit score through a credit bureau. If it is lower than expected, take a few months to improve it. You can do so by clearing outstanding dues, avoiding new debts, and limiting credit utilisation. An increase in your score can make a big difference when you are trying to get a higher Home Loan amount. 

Tip 3 – Clear Existing Debts to Free Up Income

Lenders calculate your FOIR (Fixed Obligation to Income Ratio) while evaluating your financial profile. It basically measures how much of your monthly income goes towards debt payments. The lower your FOIR, the higher your chances of getting a higher loan amount. 

So, before applying, it is advisable to clear short-term debts, such as credit card balances, personal loans, or any other EMIs.  

Tip 4 – Declare All Sources of Income

When it comes to disclosing your income, do not just consider your salary or business earnings. Additional income, such as rental returns or incentives, can also strengthen your application. 

Getting a higher Home Loan amount can be possible by adding a financial co-applicant, improving your credit score, or reducing existing debts. If you are planning to buy a home soon, it is worth taking time to review your current financial profile and make the necessary improvements.