by rishi mehra interest rates for home loans continue to be high the economy although resilient can still reel under a global crisis and as bad debts rise banks are increasingly wary about lending to anyone with even a modicum of risk involved as tightened criteria for borrowing money to buy your dream house stares at your face it may not be as bad as it looks while disbursal of a loan is at the discretion of a lending institution there are some things you can do to improve your chance of getting your loan approved build your reserves it is important to plan before buying a house plan a good 23 years before you buy a house and start saving a fixed amount every month to build your own reserves towards the amount you need to pay while banks typically provide loans for 7585 of the value of the house one should strive to pay as much as possible this reduces the amount of emi you pay lowers interest rates and also increases the chances of your loan being approved relatively easily a good savings mean a person is assiduous in his monetary goals and banks like that there is a good chance that banks will provide competitive rates of interest if they have to fund only about 60 of the value of the house while the borrower foots the remaining get coborrowers if you think you are stretching the limits of your income with the home loan and there is a risk of the bank refusing to approve it another option can be to get a coborrower for your loan this would mean the liability of the loan is now being shared with someone else and at the same time his or her income is also taken into account to calculate the repaying power this also helps you get a bigger amount of loan banks consider it less risky to lend to people who have a greater degree of income available in fact banks often allow six coborrowers for a home loan a coborrower can be your spouse parents children and siblings getting a coborrower also makes sense from a taxation point of view as all coborrowers can claim tax deductions on a proportionate basis under section 24 of the income tax act against interest repaid and under section 80c against principal repaid pay off your credit card bills every outstanding in your credit card bill is tracked by credit bureaus like cibil and experian credit card outstanding are types of unsecured loans and has an adverse impact on your credit standing if bills are not paid in full ensure you pay your all credit card bills some months before you apply for a loan so that the correct data is reflected on your credit report also close down any credit card that you do not use this reduces your potential exposure to unsecured loans at the same time clear any other personal loans that you