Learn How to Determine Your Own Home Loan Eligibility

One can easily avail home loans from several financial institutions in India to finance the purchase of a residential property. Borrowers can avail up to 85% of the property’s current value as a home loan. However, an individual who intends to borrow a home loan needs to meet certain home loan eligibility criteria of the lender for approval. Those who are able to satisfy such criteria better will be able to avail a home loan at more beneficial terms.

If the individual is unable to meet the stipulated eligibility criteria, the loan application may be rejected by the lender. This leaves a bad impression on that individual’s credit information.

Eligibility Criteria for Home Loan Applications

  • Age of the Applicant

Applicants who are self-employed need to be within the age group of 25 years and 70 years in order to avail a home loan. Salaried employees should fall within the age group of 23 years and 62 years, common home loan eligibility criteria for most lenders.

  • CIBIL Score

The CIBIL score is a 3 digit number which implies the financial credibility of a particular individual. This score ranges from 300 to 900. In order to become eligible for a home loan, a score around or above 750 can help avail a loan or any other financial product at beneficial terms and features.

  • Loan to Value

Loan to value refers to the percentage of the property’s value which is disbursed by a lender as the loan amount. Note that it is the lender who decides the LTV offered to a borrower based on their eligibility, repayment capability, the value of the property to be purchased and mortgaged, etc. So, if a financer offers a loan of Rs.70 lakh considering the current market price of your property which is Rs.1 crore, you are eligible for an LTV of up to 70%. Try to meet as much of the lender’s eligibility criteria as possible to avail a higher LTV and loan amount against the property.

  • Occupation

The individual must be self-earning like a businessman or a doctor or he might be an employee at a private, MNC, or public organisation.

  • Minimum Wages Earned by an Applicant

The lender estimates a ratio of net income earned per month to that of the location of residence of loan applicant. If the applicant has a higher income than the median, he/she has a higher chance to avail the home loan.

Check Your Home Loan Eligibility With an Eligibility Calculator

The best way to determine eligibility for a home loan is through housing loan eligibility calculators offered by top financiers online and for complimentary usage.

Steps to Use a Home Loan Eligibility Calculator –

Step 1: Provide date of birth in a specific format DD/MM/YYYY.

Step 2: Enter place of residence.

Step 3: Put in approximate monthly income.

Step 4: Choose a tenor period which can be adjusted up to 240 months or more, depending on the financer.

Results will show the eligible loan amount, applicable interest rates, and repayment schedule with EMIs.

Note that lenders prefer applicants who have a stable income history of more than 3 years. Self-employed individuals may need to provide business vintage of more than 5 years.

It is also important to have an idea about the varied fees and charges applicable on a home loan as well.

Home Loan Documents Required

Documents you may need to submit to avail a home loan will include –

  • KYC documents.
  • ID and Address proof.
  • Form 16 or latest salary slips.
  • Bank account statements for at least the 6 months.
  • Proof of business vintage (In case of self-employed applicants.

Determine your home loan eligibility with the help these pointers and a home loan eligibility calculator. Meet the criteria set by a lender to avail a housing loan at the best possible loan terms and with attractive interest rates. Consider these pointers and learn how to easily get a home loan in India.

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