What are the Eligibility Criteria for Home Loans in India?
It isn’t an easy task to build a home of our own. It requires massive financial planning, finding more opportunities, being money conscious, and so much more. Most of the time, it is a process of borrowing money from a bank. This means you have to be approved for the home loan. While you apply for a home loan, you don’t want to be disappointed. No one wants to get disappointed, so let’s be well prepared. Here is how you can be prepared for a home loan and know much more about it. We will discuss the eligibility criteria for a home loan in India.
Understanding Home Loans
A house is one of the biggest assets a person could possibly own. All of us dream of having our own home. It’s a space where you create happy memories. Still, buying a house has not gotten any easier. Over the Years, real estate prices have gotten so high that buying a home without any external assistance has gotten practically impossible today.
Here is when the bank comes in, doesn’t it? Banks give home loans to their eligible customers to help them buy their dream houses. There are Government-backed schemes too, and here the cost of the housing is undertaken by the Government or a combination of the government and the bank.
Since the amount of a home loan is much larger and it is for a longer period, usually 20 to 30 years – the eligibility for loans is quite stringent to make sure that loans do not turn into NPAs.
What Does Eligibility for a Home Loan Mean?
The eligibility for a person for a home loan product of a bank is the qualifications that a borrower must meet in order to get the loan. These needs would usually pertain to various factors like the age of the applicant, income, credit score, and much more. If you are applying – you need to fill in all of the eligibility blanks to be approved for the loan. The eligibility for home loans varies from one bank to another. You can also use the house building loan EMI calculator of particular banks you choose to apply in or from the other online available ones.
General Eligibility Criteria to Get Through With a Home Loan Application
Home loans are quite popular, and they have the nature of term loans. The eligibility that has been set for home loans doesn’t just depend on one factor, but many. Here are some of the generally followed ones.
Applicant Type
Market lenders give home loans to generally two types or categories of applicants: and they are salaried and self-employed. The bank or financial body will determine the employment status and the income level of the applicant to determine eligibility.
Nationality
The nationality of the applicant is a basic parameter to determine the eligibility for a home loan. The majority of banks give home loans only to Indian Residents.
Age of Applicant
The age of the applicant is a big factor to determine the eligibility for a home loan of the lender. You have to meet the eligibility criteria set by the bank to be eligible to avail of the loan. A bank sets maximum age restrictions beyond which you cannot be considered to be a viable candidate for a home loan.
When you apply for a home loan at an early stage, the period of the loan is higher than at a later stage. It will result in lower EMI and at affordable prices. A major part of banks needs an applicant to be a minimum of 21 years of age in order to be eligible for a home loan, and a maximum of 70 years. Also, mainly the criteria vary depending on the guidelines set by the bank.
Credit Score
Your credit score helps to determine the eligibility for your application and the rate of interest and tenure by the lender. A person who has a higher credit score will get a home loan at lower interest rates and the other way around.
Your Income
Income is one of the most important factors that determine eligibility for home loans. The bank will set minimum income criteria to make sure you have the capacity to repay the sanctioned loan. You need to give documents that will make sure you are eligible to opt for the home loan.
Your Current Liabilities and Commitments
The eligibility also considers external liabilities that you may have and if it would be difficult for you to meet the EMI proposed. If you do not have any external liabilities a sound repayment is of prime importance.
You need to know – these are some of the parameters you would have to meet in different banks.
How to Increase your Eligibility?
You can always boost your eligibility with some smart guidelines. The measures that will help you are mentioned here.
- You can apply for a home loan with a partner or family.
- You can choose a longer pay-off tenure.
- By clearing your existing dues.
- Having a good credit score by paying off current debt.
Conclusion
Getting approved for a home loan can get hectic at times, and you would have to go through tedious procedures. But, at the end of the day – it would be worth it.
