Finding the right home loan is no small feat in a market overrun by legitimate offers and promotional gimmicks. It takes weeks of research, due diligence, and verification to arrive at the right choice, and one can only hope that the lender also reciprocates by extending favourable lending terms.

Home Loan

While most lenders exercise an easy approval policy, improper or weak home loan applications still get rejected. Home loan rejections not only dash your dreams of buying a new home but also leave a long-term negative impact on your chances of securing other loans in the future. Loan rejections are recorded against your credit score, bringing it down. Future lenders can view this as a red flag and assess you as credit unreliable. It does not mean that applicants can’t increase their credit scores, but the effort of negating a home loan rejection is considerable.

To avoid home loan rejections, and in turn, improve your chances of speedy home loan approval, there are certain measures that borrowers can implement. Read on to learn more.

Tips to Help Secure Speedy Home Loan Approval

There are several aspects that home loan applicants can take care of, to maximise their chances of speedy home loan approval, and thereby, disbursal. Here are a few of them:

  1. Ensure a Strong Credit Score

With no exceptions, all home loan lenders request the applicant’s credit score to assess their credit viability. Your credit report and score, also known as the CIBIL score, is a summary of your past repayment habits and informs the lender of your credit utilisation patterns. The lender evaluates how creditworthy you are, based on the factors used to indicate your credit health, such as:

  • Your repayment history

  • Your current income

  • Your ongoing financial obligations

  • Your credit utilisation patterns

  • Your record loan applications and rejections if any

Usually, lenders prefer sanctioning big loan sums to applicants with an ideal CIBIL score of 750+. However, if your CIBIL score stands around 725, you still have a good chance of securing speedy approval, provided you meet the lender’s other eligibility criteria.

  1. Assess Your Repayment Capacity

Your repayment capacity is one of the biggest factors that decide how much you stand to get as the loan amount, and a higher repayment capacity translates to speedy loan approval. Naturally, lenders are keen to assess your repayment capacity, as they want to ensure that you are able to repay what you borrow, complete with interest, well within the designated time frame – without posing any threat of delaying or defaulting.

It is crucial that you consider all the factors that impact your home loan eligibility and repayment capacity. Some of your key parameters ought to be:

  • Loan to value ratio

  • Fixed obligation to income ratio

  • Future financial investments and goals

Further to this, you can also arrive at the right home loan amount, before you apply for a home loan, using an online home loan EMI calculator, to gauge if your desired loan amount is feasible to your current repayment capacity. The tool will not only show you the correct principal amount, but also shows you the tentative EMI payable and the interest applicable, based on the follow information you provide:

  • Desired principal amount

  • Preferred repayment tenor

  • Current home loan interest rate

  1. Make a Joint Home Loan Application

What’s better than one borrower applying for a solo home loan? It is when two or more co-applicants applying jointly for a home loan, ensuring a higher repayment capacity and a lower risk of poor loan repayment. Lenders are keen on sanctioning joint home loans for the aforementioned reasons, as it reduces the individual debt burden. Applying with a co-applicant holds a positive connotation and increases your chances of a speedy home loan approval.

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Wrapping Up

This article highlights some of the most impactful corrective measures to improve the quality of your home loan application in an attempt to ensure speedy home loan approval and disbursal. Aside from these, a few other tips that borrowers can consider are clearing off pending dues, making a bigger property down payment, and readying the required documents beforehand.

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