One may need financial assistance to fund their emergency expenses during financial difficulties. Buying a house or funding the construction of a living space is one of the most significant financial commitments in a person’s life. This is the reason why some people need to opt for home loans to purchase their dream house.
In this regard, it is important to know the eligibility criteria to ensure a hassle-free loan approval. A candidate’s eligibility depends on a number of factors. In this guide, we are going to highlight how an applicant can check home loan eligibility. So, keep reading to know more about the same.
How to check home loan eligibility?
Prospective borrowers can now know the approximate loan amount they are eligible for using a house loan eligibility calculator. These calculators act as a self-help planning tool and are available for free at the official websites of various financial institutions in India.
This free-to-use tool provides results within a few seconds based on an applicant’s income and repaying capability. Certain financial institutions may also check the credit score of the applicant and other factors before approving a loan.
Willing applicants can check home loan eligibility by following these simple steps:
Step 1: Visit the official website of your preferred lending institution and navigate to the home loan eligibility calculator page.
Step 2: Feed in your DOB in DD-MM-YYYY format.
Step 3: From the dropdown menu, choose the city of residence and then enter your overall monthly income in INR.
Step 4: Provide details about your ongoing financial obligations.
Upon entering all these variables, the tool will display a rough estimate of the eligible home loan quantum.
What are the factors on which home loan eligibility depends?
The eligibility for a home loan or any other form of credit primarily depends on the repayment capability of the borrower. A home loan eligibility calculator determines the eligibility based on the following factors:
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Age
The age of the borrower determines the repayment tenor of a credit facility, which in turn plays a vital role in deciding the loan EMI.
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Nature and amount of monthly income
The total monthly income of an applicant decides his or her repayment capability. An applicant with a stable and high monthly income will be granted a sizable loan amount.
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On-going loans
The amount of loan a person is currently serving plays a pivotal role in deciding the home loan eligibility. This is because the on-goring EMIs get deducted from a person’s monthly income which decides his or her repayment strength.
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Credit report
Almost every financial institution will ask for a credit report before sanctioning a home loan application. This comprehensive report allows lenders to assess a person’s repayment history and credit behaviour.
How to enhance home loan eligibility?
One can enhance his or her housing loan eligibility in the following ways:
- Adding another earning member from the family as a co-applicant can increase the chances of getting a sizable loan quantum. This is because the lender considers the primary as well as the joint applicant’s income while sanctioning a home loan.
- Ensuring a stable income flow, considerable savings and investments.
- Producing proof of variable sources of income.
- Closing ongoing loans will reflect good credit management behaviour.
- Keeping an eye out for the errors in credit records and rectifying them as soon as possible.
What are the eligibility criteria for opting for a home loan?
To get a sizable loan amount, willing borrowers have to meet the following eligibility parameters:
- Both salaried and self-employed candidates can apply for a home loan
- Salaried applicants must be in the age group of 23 to 62 years old, while self-employed people must be between 25 to 70 years old
- Every person applying for a home loan must be a citizen of India
- Salaried employees must have three years of work experience, while self-employed applicants must be in the current business venture for at least five years.
What are the documents required for home loan in India?
Here is a list of the documents that applicants need to submit in order to get a home loan in India:
- Identity card issued by the government (applicable for the primary as well as co-borrower)
- Address proof issued by the government (Aadhaar card, voter ID card, passport, etc.)
- Last six month’s bank account statements
- Properly signed application form along with a passport-sized photo
- Other property-related documents
How to apply for a home loan in India?
Now that you know the eligibility criteria and documents required to apply for a home loan, let us move to the steps that you need to follow in order to apply for this credit facility:
Step 1: Visit the official website of your preferred lending institution and navigate to the home loan application page.
Step 2: On the application page, enter all the personal and professional details as asked by the lending institution.
Step 3: Enter your required loan amount and click on the ‘Generate OTP’ button to get the one-time passcode.
Step 4: Enter the OTP and provide all the additional details before submitting the application form.
Once you have completed all these steps, a representative from the lending institution will get in touch with you to guide you through the next steps.
In addition to all the aforementioned documents, salaried applicants will have to provide their latest salary slips and Form 16. Similarly, in the case of self-employed employees, these documents change to proof of business establishment and financial statements audited by a CA.
Existing customers can now check their pre-approved offers by entering their names and contact numbers in the relevant window. These offers are available for secured credit lines, such as loan against property and home loan. Pre-approved offers expedite the overall loan application process and cut down the lengthy documentation phase. This helps you get the funds as soon as possible during a financial exigency.
Read Also:- Home Loan Balance Transfer Eligibility
To sum it up, you must check home loan eligibility before applying for this credit facility. This will help you get a rough idea of the loan amount that you might get against your eligibility parameters. That being said, once you receive the loan amount, you must also ensure to repay the monthly instalments in a timely manner. This will help you keep your secured property safe throughout the repayment tenor ensuring a smooth borrowing experience. You must also keep in mind that missing out on even a single EMI can negatively affect your credit score.
