Last Updated on 07/01/2021 by Deepak Singla
Home loans in India are one of the most availed financial options in the Indian lending market. Considering the sky-rocketed price of real estate in the country, property buyers are constantly in search of affordable financial options to make their home-purchasing process easier. However, before you avail of an advance, firstly you need to be aware of the home loan eligibility criteria before settling on one. This ensures that a loan seeker can repay the loan amount without chances of defaulting.
Failing to meet your lender’s eligibility requirements can lead to rejection of your home loan application – leaving a negative mark on your credit profile. Thus, to make sure you complete the home loan processing process smoothly and quickly, take a look at these 4 eligibility criteria required to avail a home loan in India.
4 Basic Eligibility Criteria Required to Avail a Home Loan in India
Employment and Income
Having a steady income source is an essential determining factor when it comes to home loan eligibility as it forecasts your repayment capabilities. Your income determines your eligibility for the desired loan amount. Lenders take into consideration your net salary, your fixed monthly obligations to determine if you are capable of paying the home loan EMIs.
Thus, salaried professionals employed at a reputed public, private or corporate enterprise are always preferred. However, if you are a self-employed individual, you can still avail home loans in India conveniently if you can produce –
- Minimum 5 years of business vintage.
- Proof of steady revenue from your current business, etc.
Age is another home loan eligibility determining factor when it comes to home loan tenure. For instance, borrowers can opt for a longer tenure of 18 to 20 years and also avail a higher loan amount if you are in the lower age bracket. This helps a borrower to repay the loan conveniently.
Salaried individuals require being within the age bracket of 23 to 62 years while applying for a home loan in india. Self-employed applicants must be between the ages of 25 and 70 years to such advances.
Holding a healthy CIBIL score of 750 or more instills a sense of creditworthiness among the lenders. Possessing a healthy credit rating and a clean repayment track record indicates you have the least chances of defaulting on loan repayment. This proves crucial in faster loan processing and attracting better home loan interest rates.
Additional Read: Possible Ways to Increase Your Housing Loan Eligibility
Documents Required to apply for home loan in India
After applying for a home loan in India, you will be asked to furnish a few essential documents. This is a list of all the documents required for your housing loan approval –
- KYC documents like Voter ID card, Aadhaar card, PAN card, etc.
- Identity and address proof such as driver’s license, passport, etc.
- Passport-size photographs.
- Latest salary slips or Form 16.
- Previous 6 months of bank account statements.
- Income Tax Returns for the last 6 months.
- Profit and Loss balance sheet audited by CA.
- For businessmen, proof of your business establishment.
Keep these documents handy when applying for a home loan. You can also use a home loan eligibility calculator to evaluate your eligible loan amount. Make sure to input accurate information for accurate results. Read these 5 ways to imp