Home loans are availed by individuals who require financial backing to purchase a residential property. Borrowers have a certain percentage of the total property value as down payment while the remainder is met by the home loan. The RBI has capped the maximum percentage of the property value a financer can provide as a home loan at 90%. However, this percentage is the highest a borrower can be offered and is often reduced depending on the creditworthiness and repayment capability of the borrower plus other home loan eligibility.
How to Meet Home Loan Eligibility Requirements
To avail a housing loan, one should keep in mind several aspects a HFC will duly consider before disbursing the loan. One can also check his eligibility via housing loan eligibility calculator.
- The applicant should have a stable source of income to avail home loans. A stable income denotes the repayment capacity of an individual. To be eligible for a credit, a salaried person should have a minimum monthly income of Rs.25,000 in metro cities.
- The age limit of a salaried person should range between 23 to 62 years to avail a housing loan, and the age limit of self-employed applicants should range between 25 to 70 years.
- To be eligible for a loan, an applicant should have a proper CIBIL score within the range of 750 to 900. A good credit score ensures the creditworthiness of an individual.
Although the eligibility may vary between different lenders, fulfilling the same is essential as these are the factors that can affect the eligibility of your home loan.
Necessary Documents Required for Verification
The applicant must submit correct documents for faster loan disbursement. The list of all the home loan documents needed for a home loan mentioned below is –
- Proof of unique identification is mandatory for home loan eligibility – Voter ID, PAN Card, Aadhaar Card, Driving License, and Passport.
- Proof of address – Latest utility bill, sale deed copy of the property (if present), and municipal tax receipt.
- An individual also needs to submit income statements to avail home loans. These can be salary slips of previous months, bank statements of the last 6 months for salaried persons and income tax returns documents or Form 16 for self-employed individuals.
Some financial institutions may ask for additional documents required for home loan, such as sale agreement of the house (if owned), copy of purchase or allotment agreement of the property (if applicable), etc.
Procedure for Online Application
After checking home loan eligibility and documents submission, one can apply for a home loan online using home loan application form following the steps mentioned below –
- Go to the official page of a reputable financial institution or an HFC and look for their home loan offers.
- Provide other required details and click on submit.
- How Much Amount of Loan Should One Borrow?
One needs to do prior planning before applying for a home loan. The applicant should keep specific factors in mind, such as –
- An individual should borrow according to his or her repayment capability. If his or her credit amount is more than their repayment capacity, they will have to pay a large amount of EMI from their monthly income.
A financial service provider always checks the repayment capacity of an applicant based on the applicant’s monthly disposable income, surplus income, assets, etc. Lenders assume that 55% to 60% of the monthly disposable income or surplus income is available for loan amount repayment.
- Financial service providers offer loans for a long tenure. But an individual should always prefer a shorter tenor to avoid payment of more interest.
On time EMI payments and proper financial planning helps an individual to repay the loan without any hindrance, and leads to a good credit history. One should always maintain good creditworthiness for home loan eligibility.
