When it comes to buying homes, a home loan is the loan of choice for people. A home loan is a long term secured loan. What this means is that the property purchased is mortgaged to the bank. With many banks, financial institutions, and non banking financial companies giving out home loans in India, it has become easier than ever to access credit to buy homes.
If you’re thinking about taking a home loan, then one of the first things you need to do is examine your eligibility criteria for a loan. Even though a housing loan is a secured loan, the lender will thoroughly examine your eligibility especially with regards to servicing the loan installments.
Here are some of the common eligibility criteria for home loans in India:
1. Age:
The minimum age of the applicant for different lenders ranges between 21 years to 25 years. The maximum age of the applicant ranges between 65 years to 70 years.
2. Income:
This is the most important eligibility criteria for a home loan. Each lender wants to verify whether the loan applicant can repay the loan. This depends on the monthly income drawn by the loan applicant.
To improve eligibility in this area, many lenders jointly apply for the loan with their family members who have a higher income. Jointly applying for the loan increases the chances of the loan being repaid by either one of the joint applicants and lenders favour such loan applications.
3. Employment status:
The loan applicant must have a stable job or a stable self employed business. Some lenders specify a minimum period of employment to be sure that the loan applicant will draw in a regular salary. For self employed businessmen and professionals, the eligibility criteria is 3 to 5 years of operation of the business.
To improve eligibility in this area, it is better to have an employment history before applying for a home loan.
4. Maximum loan amount:
Most lenders lend up to 90% of the purchase price of the house. The purchase price is determined based on the loan agreement between the two parties.
Some lenders have specific conditions with regards to the type of property purchased as well i.e a new property or a resale property. They may have conditions about the age of the property so it is important to thoroughly check out these criteria before applying for a home loan. Most lenders have their eligibility criteria displayed on their websites which makes it very easy to find out whether you are eligible for the loan or not. Make sure to apply for a home loan after complete research.
If you’re thinking about taking a home loan, then one of the first things you need to do is examine your eligibility criteria for a loan. Even though a housing loan is a secured loan, the lender will thoroughly examine your eligibility especially with regards to servicing the loan installments.
Here are some of the common eligibility criteria for home loans in India:
1. Age:
The minimum age of the applicant for different lenders ranges between 21 years to 25 years. The maximum age of the applicant ranges between 65 years to 70 years.
2. Income:
This is the most important eligibility criteria for a home loan. Each lender wants to verify whether the loan applicant can repay the loan. This depends on the monthly income drawn by the loan applicant.
To improve eligibility in this area, many lenders jointly apply for the loan with their family members who have a higher income. Jointly applying for the loan increases the chances of the loan being repaid by either one of the joint applicants and lenders favour such loan applications.
3. Employment status:
The loan applicant must have a stable job or a stable self employed business. Some lenders specify a minimum period of employment to be sure that the loan applicant will draw in a regular salary. For self employed businessmen and professionals, the eligibility criteria is 3 to 5 years of operation of the business.
To improve eligibility in this area, it is better to have an employment history before applying for a home loan.
4. Maximum loan amount:
Most lenders lend up to 90% of the purchase price of the house. The purchase price is determined based on the loan agreement between the two parties.
Some lenders have specific conditions with regards to the type of property purchased as well i.e a new property or a resale property. They may have conditions about the age of the property so it is important to thoroughly check out these criteria before applying for a home loan. Most lenders have their eligibility criteria displayed on their websites which makes it very easy to find out whether you are eligible for the loan or not. Make sure to apply for a home loan after complete research.
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