Every borrower must fulfil home loan eligibility criteria for a seamless application process. Lenders put forth certain eligibility factors to ensure an applicant repays his or her loan amount without defaulting. Failing to meet eligibility requirements may result in rejection, leaving a negative mark on an individual’s credit profile.
Further, one can check their home loan eligibility by using an online calculator. Lending institutions factor in several pointers while checking eligibility. A housing loan eligibility calculator feeds in information concerning these factors and conveniently evaluates a person’s eligibility.
Home loan criteria
Housing loan eligibility depends on several factors and varies based on a borrower’s employment details. So, salaried and self-employed persons will have different eligibility requirements to meet before securing a housing loan.
Here are some eligibility criteria based on specific factors:
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Eligibility based on salary
Lending institutions consider a borrower’s salary to check his or her loan repayment capacity. They will sanction a substantial loan amount based on a person’s in-hand salary. The take-home salary should be a minimum of Rs.25,000 for reputed lenders. So, potential borrowers meeting this minimum salary criterion can apply for a home loan effortlessly.
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Eligibility based on age
One can choose a loan repayment tenor based on his or her age. Individuals applying for a housing loan as early as 25 can choose a longer tenor and expect easy EMI payment.
Other than these, there are other eligibility criteria one needs to fulfil for a hassle-free home loan process. They are as follows:
- Individuals should be Indian citizens residing within the country.
- In terms of work experience, salaried individuals should possess a minimum of 3 years of experience, and self-employed personnel should have a business continuity for a minimum of 5 years.
- An individual’s credit score can determine home loan EMIs and also makes him or her eligible for a loan. Potential borrowers with a CIBIL score of more than 685 are eligible for a housing loan.
After meeting the aforementioned home loan eligibility criteria, one can consider securing a loan from reputed lenders. Such lending houses offer a substantial loan amount at competitive interest rates.
Additionally, they provide pre-approved loan offers on products including home loan and loan against property for an easy and quick application process. Borrowers can check their pre-approved offer in just 3 seconds by entering basic details like name and phone number.
How to check housing loan eligibility?
One can check housing loan eligibility by using a calculator and following these steps:
- Individuals need to enter their net monthly salary.
- They need to choose a repayment tenor.
- Then, they should mention additional income sources.
- Finally, they must mention other obligations.
Ways to improve housing loan eligibility
Individuals can improve their loan eligibility by following the below-mentioned tips:
- Potential borrowers must clear off their existing dues to qualify for a housing loan. Lenders assess a person’s debt to income ratio before disbursing a loan amount. In case of any defaults, they can reject a loan application. Further, one should use a housing loan EMI calculator to evaluate the EMIs beforehand and avoid defaults.
- One should opt for a longer repayment tenor to reduce the EMI burden and improve loan eligibility. However, individuals taking such a decision might need to pay more interest.
- Finally, one should do proper market research and opt for a lending house with lower home loan interest rates. If existing borrowers are unhappy with their current lender, they can settle for a home loan balance transfer facility.
Factors affecting home loan eligibility criteria
Here are the factors affecting housing loan eligibility:
- LTV ratio: Lenders check a property’s value before offering a housing loan. In case a property is old, its loan-to-value ratio will be less. Thus, lending houses sanction a lower loan amount for such properties.
- Employment status: Lending institutions offer better deals and a higher loan amount to individuals employed with an MNC. Additionally, applicants with a stable business can easily qualify for this loan.
To conclude, one should consider checking home loan eligibility criteria before applying. Following the above pointers, borrowers can also improve their eligibility for housing loans.
