Fasteners in lug joints are major structural assemblies that enable efficient load transfer of primary structural components in an aircraft. Due to their easy assembly and disassembly, it provides access for periodical inspection. Also, as the effect of any damage is restricted locally, repair/ replacement of damaged component becomes economical. Thus the health of fastener joints is a prime concern for maintaining the structural integrity. Owing to their geometry and the intense loading that vary with the flight mission, the stresses and the contact/separation between the fastener pin and the lug joint exhibit non-linear behaviour. The contact/ separation regions govern the load transfer between the allied components and hence the critical locations of stress concentration. These critical locations also experience different environmental conditions that makes it susceptible to failure. In the present work three-dimensional numerical analysis is performed that accounts for the geometric and material non-linear effects. The characteristic behaviour of the region of contact/ separation under various loading conditions is evaluated based on contact mechanics approach. The critical locations identified based on the contact behaviour are analysed for estimating the useful life of the joint. In addition, the life enhancement techniques are studied to help develop models that would qualify for setting up condition based maintenance systems.