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What Is The Eligibility Criteria For A Home Loan?

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What Is The Eligibility Criteria For A Home Loan?

Homebuyers who wish to apply for a home loan need to fulfil certain requirements and only then are their applications approved by banks 

For the majority of homebuyers, home buying in today’s times is not possible without a home loan. While most banks have made the process of home loan application very easy, until and unless an applicant does not meet certain criteria, the chances of their rejection are high.

RealtyNXT lists the factors which play a crucial role in getting your home loan approved.

1. Accurate information 

Once you approach a bank for a home loan, get ready to be scrutinised thoroughly. The information you provide the bank must be correct and true. If any kind of inconsistency comes to light, it will reflect very poorly on your application. Banks adopt a very strict policy to filter out those who are not truthful.

Remember, the more the information you provide will match the findings of the bank, the bigger your chance of getting the home loan.

2) Your salary, profession and age

The bigger your paycheque, the more convinced the bank will get that you can pay back the loan. A well paying stable job is an important factor. The bank will grant you a bigger loan sanction if you earn a high salary. You should earn a minimum of Rs 25,000 per month.

Your profession decides if you are capable of earning a stable income or not. Having a steady income every month would mean that you can pay back the bank’s monthly instalments. The company you work for will also be a deciding factor. The more known the brand of the company, the better rate of interest deal you will get.

The earlier in life you apply for a loan, the longer the tenure of your loan would be. The more years you will have to repay the loan, the lower your EMI rate would be. It is advisable to apply for a home loan at a younger age.

3) Your existing loan

If you already have an existing loan repayment in process, your bank will reject your application. Understand that no matter how high your salary might be, repaying loans every month to two different lenders will be too much on your plate. Banks realise this and hence will not accept your application.

4) Your CIBIL score

A CIBIL (Credit Information Bureau {India} Limited) score basically shows the banks your complete credit history. It is a three-digit number with the lowest being 300 and the highest being 900. If you manage to score 700+ then the chances of your home loan application getting approved are extremely high. Banks will end up granting approximately 85 percent of the total value of money you need to buy a home. 

So what will make you get the ideal  CIBIL score? You should have a record of timely debt repayments. Your credit card history should reflect that you have never overused your credit card limit. The important thing to remember is not to request for a CIBIL score frequently as that can lower your score.

5) The builder you choose

Most banks run checks on builders as well. This is due to the fact that many builders take loans from banks as well. See if the builder you have zeroed in on is on the list of approved builders by the banks or not. If the builder of your choice is in the good books of the bank, your application stands a good chance of being accepted.  

ALSO READ: 5 Ways To Reduce Your Home Loan Interest Rate

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