With government initiatives like PMAY, RERA and several other, many individuals who did not own their private houses are looking forward to finance the construction of a new residential property. Further, even the government intends to build 2 Crore houses by 2022 as the primary target of PMAY.

The Government of India has already successfully introduced transparency to the whole real estate industry. Under such circumstances, it is important that individuals planning to build their own home learn how to increase their eligibility for a housing loan.

Numerous factors affect the home loan eligibility of customers. For potential borrowers planning to avail financial aid, it is imperative to know the factors which affect the eligibility for such credits. Following are the factors affecting home loans eligibility along with what to keep in mind to increase the aptness for such a credit.

Credit score:

Credit score or CIBIL score is a 3 digit number signifying the credit history of a borrower. It is one of the most important factors influencing the home loan eligibility. Ranging between 300 and 900, generally a score of 750 is considered healthy by financial institutions.

The major factor affecting this score is how a borrower handles their previous and existing debts. Be it a loan or a credit card, unpaid EMIs and statements impact this score negatively.

Consequently, borrowers are always advised to repay their credits on due time. Potential borrowers must consider clearing their unpaid debts in order to improve their CIBIL score and increase their home loan eligibility criteria. 


Under normal circumstances, financial institutions consider applicants between the ages of 25 and 70 years safer. Especially since these are high value financial products, younger applicants ensure a lengthy career and therefore better chance of complete repayment.

There are numerous individuals who desire to build their own home and save money to achieve that target. In case they feel their financial planning include a portion of expenses being financed by some NBFC, they should opt to avail the loan as early as possible. There are numerous other advantages of taking a home loan in the 20s.  

Source Of Income:

Financial institutions take into consideration where an applicant is working. In case an individual is working in a government or public organisation, or an MNC, financers consider their associated risk lower. 

Applicants would also have to submit some essential home loan documents, including income details to prove their employment and monthly earnings. Subsequently, they stand a greater chance of loan approval as well as better interest rates. 

Similar Read: Possible Ways to Increase Your Housing Loan Eligibility

 Debt To Income Ratio:

Among the numerous factors that can affect home loan eligibility, debt to income ratio is a major one. In debt to income ratio, NBFCs check if an individual can repay his or her EMI after clearing all their other existing obligations.

Individuals planning ahead to avail a home loan scheme should look up this factor. In effect, borrowers can plan ahead so that they clear some of their financial obligations before availing this new credit advance.

It is crucial for customers to look into their home loan eligibility and plan accordingly for two reasons. They must keep it in mind that increasing eligibility ensures not just approval, but economical rates of interest as well. Consequently, borrowers should also plan their repayment structure ahead so that they do not default on their loans due to financial restraints.