Are you planning to buy your dream home or renovate your current property? You must know that this is a huge financial and long-term commitment. Opting for a home loan is a smart way of going about it. The process of getting a home loan is now simple and convenient thanks to non-banking financial companies (NBFCs). The loan verification process has never been easier. Plan your equated monthly instalments (EMIs) well and you will be able to pay back your loan with ease. Home loans are in the range of Rs. 10 lakhs and Rs. 5 crores.
Here is a closer look at how the home loan eligibility criterion works.
Home Loan Eligibility Criterion for Salaried Individuals:
- You must be a resident of India.
- You must be between 23 and 62 years of age.
- You must be a salaried person with more than three years of work experience.
- The minimum and maximum loan amounts range from Rs. 10 lakhs to Rs. 3.5 crores
- The minimum net salary is between Rs. 25,000 and Rs. 30,000.
Home Loan Eligibility Criterion for Self-employed Individuals:
- You must be an Indian resident.
- You must be between 25 and 70 years of age.
- Self-employed with at least five years of experience in the current business.
- The above criterion applies for chartered accountants, engineers, doctors or businessmen.
Home Loan Eligibility Calculator:
Whether you are eligible for a home loan depends on your income and capacity to repay the loan. NBFCs provide the online eligibility calculator. You can use it to calculate your home loan eligibility as well as decide the amount that you want to apply for.
How to Use a Home Loan Eligibility Calculator:
Here are a few simple steps
- Select your location
- Key in your date of birth
- Enter net salary
- Decide tenor of home loan
- Enter current EMIs
- Click the “check your eligibility” option
Documents Required for Home Loan:
- Know Your Customer (KYC) documents such as PAN card, Aadhaar card, passport, or driving licence
- Form 16 or latest salary slips
- Bank account statements for the last six months
- Proof of business for at least five years (businessmen/self-employed individuals)
Here are a Few Simple Steps on How to Apply for a Home Loan:
Step 1: Enter personal and employment information under the required sections.
Step 2: Make use of the home loan eligibility calculator to check the amount you are eligible for. The calculator will also educate you about the housing loan EMI and interest rate.
Step 3: At this stage, you will need to mention the details of the property you have chosen to buy.
Step 4: This stage requires you to pay an online secure fee to look through and book the offer that suits you the best. Post this, a bank executive will contact you with details about how to proceed further. Following this, you will need to submit all the required home loan documents, which can be done online as well.
Step 5: Scan and upload important documents, which help with verifying the application.
Here are a Few Factors Home Loan Eligibility is Based on:
- Age: This plays an important role in the eligibility for a home loan. It tells the bank about your ability to repay the home loan. For example, if you are 25 years of age, your time period to repay the loan will be higher than an individual who is 50 years.
- Net income: Your net income is crucial as it determines your repayment capacity after all deductions (PF, ESI, and gratuity).
- Property value: A financial institution will not finance the entire property value. Home loan eligibility also depends on the value of the property you are interested in.
- CIBIL score: Your credit score has a huge impact on the interest rate. Having a high credit score reflects well on you as a financially responsible individual. The CIBIL score allows a financial institution to gauge your ability to repay the loan.
Buying a home is a long term commitment and one of the biggest decisions of your life. Thus, it is necessary to be aware of the eligibility criteria and required documentation before applying for a home loan.