Home loans have emerged one of the vital financial tools in India that can be utilized by prospective homebuyers. Anyone with the required home loan eligibility can get an amount of up to Rs.3.5 crore by leading banks and online lenders.
Homebuyers can also use a tool such as the home loan eligibility calculator to know about an exact loan amount that they can get. Also, meeting a lender’s home loan eligibility criteria is equally vital to process the loan application for fast approval.
In the context of the discussion, let’s have a look at some standard home loan eligibility criteria, documents required along with some other factors that affect it.
Standard Home Loan Eligibility Criteria
- You need to be a resident of India
- Your age should be between 23-62 years
- You should be a salaried individual with a professional experience of 3 years and more
Home Loan Documents That You Need To Furnish
Along with meeting a lender’s loan eligibility criteria, you also need to submit some home loan documents such as:
- KYC documents
- Address proof
- Identity proof
- Recent photograph
- Latest Salary Slips or Form 16
- Previous 6 months’ bank account statement
Factors That May Affect Your Home Loan Eligibility
1) Your CIBIL Score
If you have a healthy Credit Score of 750 or more, it can impact the home loan interest rate offered by a lender. Your CIBIL Score also comprises of some elements such as repayment history, existing loan EMIs and credit card dues. It also informs a lender what kind of debts you have handled in the past. As a result, lenders can use the numbers to compute your creditworthiness to assess the repayment capacity.
2) Your Current Debt Compulsions
If you have multiple debts and loan accounts, it is not an issue to hinder your prospects of the desired home loan. Unpaid dues, if any on your credit history is a huge concern for lenders. Lenders also look at your repayment pattern to assess how you are going to handle the home loan EMIs. Missed or delayed EMIs, paying the EMIs after the due date and unpaid dues may concern them big time. Hence, you need to be disciplined and consistent with your debt repayment. It will help you avail of a higher home loan amount at a reasonable rate of interest.
3) Your Employment Status
Your employment status is another factor that may affect home loan eligibility. When you are employed with an MNC, public-sector or a reputed private limited company, the lender considers you as a reliable borrower. When you are working for a renowned organization, then the lender is sure that you have a steady source of income. As a result, you won’t face any issues while paying the home loan EMIs on time. A lender can reward you with a lower rate of interest seeing that you work for a known firm. Thus, your company’s name and employment status can work in your favor.
4) Your Age
Young applicants have better chances of getting a higher loan amount at a lower rate. It is as they have more working years left compared to an applicant nearing retirement. Therefore, lenders may not sanction your loan request if you are aged as you don’t have many working years left to repay the loan. Even if they do that, they may charge a higher interest rate to cover their risks of possible defaults.
Considering the discussed home loan eligibility factors can help you approach your loan application without hindrances. As a result, you may get the loan approval at an affordable rate of interest.