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Smart Steps to Increase Your Chances of Home Loan Approval

Your own home-There is nothing that can compare to the feelings that come with home ownership. To turn your dream into reality, banks offer home loans. One should understand that one of the most crucial financial decisions in life is taking out an SBI home loan or any other home loan from a different lender, for that matter. 

Before sanctioning your home loan, financial Institutions can assess a borrower’s eligibility using a variety of methods. It is crucial for borrowers to understand how lenders determine eligibility for home loans. A number of factors, including an applicant’s income, current debts, credit history, and other considerations, are used to establish an applicant’s eligibility. Financial institutions also take into account the purpose of the loan, including whether it is being used for the acquisition, building, or refinancing of real estate.

In order to make potential borrowers aware of this, we have narrowed down pointers which will help you to ensure your SBI home loan application gets approved with favourable terms of the loan.

Maintaining a good credit score: One of the most crucial elements that financial institutions take into account when establishing a borrower’s eligibility before giving an SBI maxgain home loan is a high credit score. A high credit score shows that you have a solid history of borrowing and are most likely to make your debt payments on schedule. On the other hand, if your credit score is low, you can have trouble getting a home loan or face higher interest rates. Lenders typically view borrowers with credit scores of 750 and higher as financially responsible, which lowers their lending risk. As a result, those with credit scores of 750 or higher have a higher likelihood of having their loan application accepted. Additionally, several lenders give customers with better credit scores lower interest rates on SBI home loan. Get your credit report and the co-credit applicant’s report from the credit and take the necessary steps to increase both your credit score and the credit scores of your co-applicants. If you check your credit report before applying for a home loan, you can find any inaccuracies or discrepancies that could unnecessarily lower your credit score (s).

Providing a supplementary source of income: If you can provide an additional source of income in addition to your primary source, your eligibility for an SBI home loan may be improved. This revenue could come from a variety of sources, including rent, interest, dividends, bonuses, incentives, and so forth. This shows that you have a greater ability to make payments and that you will settle your debts promptly.

Addition of co-applicant with a higher credit score: Your chances of securing an SBI home loan are increased when you include a co-applicant because it lowers the lender’s credit risk. The co-applicant could be a family member who is employed and has a good credit rating, such as your wife, daughter, or son. In reality, having a female co-applicant for a loan may have some benefits. Many lenders give female co-applicants reduced interest rates on SBI maxgain home loans. Typically, it is 5bps less expensive than the rates offered to male borrowers.

Clear your outstanding loans: Prior to requesting a new SBI maxgain home loan, it’s critical to settle any outstanding obligations or liabilities. This will demonstrate to the lender that you are a trustworthy borrower who is capable of paying back your loans. If you have ongoing debts, the lender might only authorize a smaller loan amount. Banks will only give you money up to a particular percentage of your salary. These financial organizations often make sure that your EMIs don’t consume more than 60% of your income (including your monthly outflows towards the home loan). Lenders subtract total EMIs from monthly income to determine a reasonable amount for sanctioning when determining your eligibility for a house loan. Improving the debt-to-income ratio is the first step for those seeking home loans. 

Examine your ability to pay your EMIs before applying for a home loan: When assessing your loan application, lenders take your EMI affordability into account. Your total debt repayment obligations, including the new SBI maxgain home loan EMI, should not exceed 50% to 55% of your monthly income. It is crucial that you choose the ideal home loan EMI before submitting your application. To determine the ideal EMI, use online EMI calculators. Always take your essential bills, healthcare costs, and regular contributions to important financial goals into account. Your chances of obtaining a home loan would increase if you submitted a home loan application based on the optimum EMI. 

Choose a Low LTV Ratio: A loan-to-value (LTV) ratio is essentially the percentage of a property’s worth that the lender has financed with a loan. You are required to make a down payment to cover the remaining cost of the property. Depending on the SBI maxgain home loan, a home loan’s LTV ratio may range from 75 to 90 percent of the cost of the property, according to RBI rules. Based on their risk evaluation of the potential borrowers for a home loan, lenders may set a lower LTV ratio. If you plan to take out a home loan when you retire, it is important that you borrow only a minimal amount. A lower LTV will cut down your overall interest cost and EMI burden.

Opt for longer tenures: Longer tenure helps to lower EMIs, which in turn reduces the loan applicant’s fixed obligation to income ratio. Customers choosing higher home loan amounts should choose a longer tenure in order to boost their ability to pay their EMIs and, consequently, their eligibility for a larger loan amount. Some banks provide SBI maxgain home loan with 25–40 year terms. But whenever you can, pay off your debt in advance. Not only does this raise your credit score, but it also eliminates your debt. If there is an increase in income, an annual bonus, and bigger savings, prepay the longer-term house loans. 


A home loan is a significant commitment, so it’s critical to take all reasonable steps to increase your eligibility in order to get the best possible interest rate. By following the tips mentioned above, you can position yourself as a more appealing applicant for a home loan and possibly receive a favourable home loan deal. Healthy financial practices, such as promptly paying off existing debts like credit card bills and EMIs, keeping your credit utilization rate under 30%, keeping track of guaranteed or co-applied loan accounts, refraining from applying for too many loans or credit cards at once, etc., can help you raise your credit score which can further increase your chances of home loan approval. 

Read also : Blockchain for Educators:Blog on how Blockchain affects the Education Industry.

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