Want to be 100% sure of getting your home loan approved? Well, you’d have to meet at least 6 criteria specified by most loan lenders and credit institutions. This post aims at highlighting the key factors that are likely to affect home loan eligibility.
Home Loan Eligibility Criteria
Looking to get a quick sanction letter on a high amount at nominal interest rates? You need to know the factors that can affect your home loan eligibility. You need to meet up the set eligibility norms for age, city of residence, credit history, income, etc. Let’s have a look at the factors that determine your chances of getting a home loan.
6 Factors that Affect Home Loan Eligibility
Waiting for approval from a certain lender to avail a loan amount to purchase a home? Be sure every loan applicant must qualify the following 6 criteria laid down by lenders:
1. Age limit :
Almost every lender would consider this when looking at a loan application. Usually, the younger a loan applicant is, the higher he stands eligible to get his home loan approved. Young working professionals between the age group of 20-30 years are eligible to easily apply for a loan amount. They can apply for a term as long as 25 years.
As this age bar drops off, chances become less. People above 40 years may find it difficult to receive extended-term loans. Besides, for those aged 50 and above; their application is sometimes turned down for longer loan-terms.
2. Total income earned:
Professionals are usually classified into 3 principal categories :
a. Salaried individuals:
This group includes those employed in any department of the government or at a registered private firm. In addition, such individuals may need to produce evidence to prove the completion of at least 1 year of service in the current organisation at the time of loan application.
b. Independent professionals/ Self-employed non-professionals (SENP):
These include qualified professionals working independently. To mention a few; doctors, engineers, chartered accountants, and freelancers.
c. Self-employed individuals:
This group includes people who own a company or run their own business. It also consists of those who have additional sources of income from rented properties or share earnings.
For all of the above categories, you need to submit applicable documents. These comprise of income documents, bank statements, tax documents, and other applicable financials during the loan request.
3. Rate of Interest :
A simple rule applies here. Your home loan eligibility is always inversely proportional to the ROI offered by the lender. This means that at a higher ROI, your eligibility goes down. It goes up again in case of lower interest rates.
4. Term of Loan:
Banks generally prefer loaning to individuals applying for longer loan terms. Therefore, if you do so, chances are high of securing loan approval. Besides, you’d also need to pay less number of EMIs all through the tenure. The only problem, however, is higher ROIs.
5. Outstanding loan:
Do you have any unsettled loans? Well, it shows up when applying for a fresh loan. This may leave a negative impact on your eligibility.
6. CIBIL Score Report/ Credit History:
A bank considering your loan application would generally look into your past record of loan repayment. They refer to Credit Information Bureau India Ltd (CIBIL). Any negative score can have a bad effect on your eligibility.
So, apply for a home loan at the right time when you stand perfect on all these grounds. All the best!
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