A home improvement loan can be used for by an individual to pay for any renovations they plan to make to their home. Many individuals wish to make a variety of changes to make their house or apartment the epitome of comfort and relaxation. It is for this very reason that one must apply for a home improvement loan. Renovations can be extremely expensive and it is not wise for one to spend all their savings on it. Financial institutions provide this loan option to help finance those individuals who want to improve their homes.
Before one applies for a home improvement loan , it is important to check whether or not they are eligible for the same. Applying for any type of a loan is a long and costly process. Getting one’s application consistently rejected can be extremely tiresome. It is for this very reason why one must check the eligibility criteria provided by the financial institution. The eligibility criteria that institutions keep in mind are:
The first thing that any institution will look at when considering a home improvement loan application is the applicant’s age. With tenure offered that ranges from one to twenty years, it is crucial for the institution to check whether the applicant is within the workable age. For employed individuals the retirement age considered is 60 while for self employed individuals is 65. Hence the tenure of the loan must be within the age guidelines mentioned to ensure no defaults occur.
The next important factor kept in mind by the financial institution is the income of the individual. The institution tries to ensure that the loan amount which is approved does not charge more than 60 percent of the individual’s salary as EMI each month. So it is important for the applicant to calculate the EMI for the loan amount being applied for to check whether or not he will be able to afford it.
A co- applicant can play a major role in whether or not the home improvement loan application is approved. Hence if you have another earning member in the family, having them co- sign the loan will be extremely helpful. Not only does it increases one’s eligibility, but also allows you to apply for a higher loan amount which will now become more affordable.
Credit score is a factor which every applicant must be aware of. The credit score explains one’s buying habits, the current number of loans they are liable to and any bad debts of the past. A low credit score may force the bank to reject your home improvement loan application .
As long as you keep in mind all these factors and work on improving your eligibility status before applying for a home improvement loan, your application will be approved.
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