A home loan is a handy product for financing a property purchase. It helps you buy the house of your dreams without compromising your lifestyle. You must collaborate with a bank that offers tailor-made loans with minimal documentation and a quick processing facility for a hassle-free borrowing experience. The bank must also be able to offer as high as ₹5 crores to cater to all kinds of customer needs. But a home loan lender determines the eligibility of a home loan based on several factors and parameters.
Income is one of the vital determinants for both salaried and self-employed individuals. For instance, a home loan eligibility based on salary requires self-employed to have an income of ₹1.5 lakh per annum and salaried people must have an income of at least ₹1 lakh per annum. But there are a few other criteria that banks will verify before lending you the money.
Credit Score
The home loan lender checks the traditional credit score. Try to build a score of at least 650 and above. It can present you as a risk-free responsible borrower. The bank is more likely to offer better terms and conditions, favorable interests, and a choice-able fund amount. Keep a close check of your credit profile to avoid mistakes. Clear the debts on time and lower the credit utilization percentage to improve your score in the least possible time.
Age Factor
Self-employed resident Indians must be between 23 and 70 years of age. Salaried residents and non-resident Indians must be between 21 and 60 years of age. Ticking this off can help you increase the chances of qualifying for the loan without worries. You can apply for the loan and use a home loan tracker to track the status.
Documents
You must be able to produce correct and authentic documents. Make sure the information is updated and true to your knowledge. Else, there are high chances of getting the home loan rejected. A few basics are PAN, photo identity proof, address proof, income proof, and property proof (copy of property document). You must also be able to show business proof with a shop establishment certificate, GST return, and trade. Business address proof is also mandatory in the form of telephone bills, paid electricity bills, property registered deeds, and the latest updated bank passbooks.
Business and Job Experience
A salaried individual must have a minimum of 3 years of experience. A non-salaried or self-employed individual must have 4 years of business continuity. Occupation and annual income help the bank analyze your financial status and determine the property loan interest rate. Further, having a steady association helps you come across as a stable and disciplined individual. This works in favor of the lender in terms of EMI payment on time.
So, you have to check these eligibility criteria as well before applying for a loan. Else, there are chances of getting the loan rejected. Work with the bank branch executives to help you through the process and avoid hiccups on the way.
