Owning a home is a part of everyone's dream. It might be a daunting task to acquire one; you can indeed overcome this challenge by opting for a home loan. All banks and other financial institutions offer schemes that suit your requirements. However, before taking the credit, you need to have a proper financial plan at your end.
Another important aspect is the eligibility criteria. Without much ado, following are the home loan eligibility criteria that you must meet:
• Age: The minimum limit is 21 years while the maximum range is 65 years
• Income: Most lenders emphasise on a maximum salary of INR 5-7 lakh. However, some Government-based schemes offer home loans to those earning INR 10,000
• Employment type: Salaried, as well as, self-employed individuals are offered home loans
• Employment status: You must be employed with the current organisation for a minimum of 2 years
• Credit score: Your score should be anywhere between 700-900
Now, the home loan eligibility could vary from lender to lender. The consensus on the loan approval is dependent on applicant’s income, their credit score and their relationship with the lender.
But do you know that if you do not have even one of the above criteria in place, it could lead to your home loan rejection:
1) Age: It is the most crucial aspect that the lenders consider when sanctioning your loan. The younger you are, the easy it is for you to acquire the loan for substantial tenure.
2) Income: You must earn a stable salary. It proves that you can repay the loan on time to your lender. Regardless of your employment type, if you can show you earn a steady income, lenders will consider your loan application.
3) Loan tenure: If you opt for a lengthy mandate, your eligibility improves. Also, prolonged mandate means smaller EMIs. That way you can manage your cash flow conveniently. However, longer tenure invites higher interest rates.
4) Credit score: The most important and sole factor behind loan approval/rejection is your credit report. If your score matches the 700-900 range, lenders approve of your loan instantly. If it is below the limit, be prepared to face rejection.
5) Outstanding dues: You have to ensure there are no default payments such as delayed credit card payments or existing EMIs. It affects your loan application.
6) Employment sector: Apart from being salaried or self-employed, lenders provide you with a loan on the basis of your employment sector. They may consider some sectors riskier and hence, are hesitant to give you credit. Some lenders also have a list of companies in their system. If you work in those, you can receive special discounts on the chosen home loan plan.
Now that you are aware of the home loan eligibility criteria make sure that you tick mark all the boxes before applying for a home loan.