Home Loan Eligibility
A home loan is a sum of money that an individual borrows from a financial institution or bank to purchase a house. The amount borrowed from the bank is paid at a certain rate of interest with the EMI every month. The property is usually taken as a security by the money lending company for the home loan.
Home Loan Eligibility Criteria
Eligibility criteria of home loans vary from one loan lending bank/institution to the other, but some of the common requirements are as follows:
- Any individual (salaried, self-employed or business person) with Indian nationality can apply for a home loan.
- Minimum age for applying a home loan is 21 years.
- Savings history and professional stability helps in quicker loan approval from the banks.
- Regular source of income is a requirement for timely repayment of the loan.
- Applicant should have their bank specified credit score and suitable credit history, so check for the history prior to applying for a loan.
- 40% of the monthly gross income of salaried professionals can be availed as loan amount.
- Profits earned by the self-employed individuals determined the loan value that they are eligible for.
| Eligibility Factors | Eligibility Criteria |
| Age | Minimum 21 years and maximum 70 years (depending on type of employment) |
| Minimum net annual income | Rs.5-7 lakhs (depending on type of employment) EMIs offered up to 50% of net income, on average |
| Type of employment | Salaried, Self-employed/business, Student, Retired, Homemaker, |
| Status of employment | Regular: at least 1 year in current job/business/profession; at least 2 years of prior employment |
| Type of residence | Owned / Rented |
| Status of residence | At-least 1 year stay at current place |
| Credit ratings | Good CIBIL score for at least 3 months prior to applying for a home loan |
Home Loan Eligibility Calculator
Using the eligibility calculator, applicants can know about the loan amount that can be availed depending on the existing EMI, monthly income and interest rate. Using the calculator loan tenure can also be calculated. Final loan amount is also influenced by the credit scores of the applicants.
Factors affecting home loan eligibility
- Age:It is the primary aspect a loan lending institution considers when the applicant applies for a housing loan. Young professionals can avail a loan with a term of up to 25 years without any trouble whereas, older applicants, beyond 40 years of age, find it difficult to be eligible for an long tenure.
- Rate of Interest:This is inversely proportional to the finance eligibility. If the interest rate is more, eligibility will be less and vice-versa.
- Income:If the applicant is an earning individual, then there is minimal risks in lending money as loan, therefore a steady and regular source of income is a must. Salaried individual should have completed minimum of one year in the present firm during the time of applying for loan. Self-employed and independent professionals such as doctors, engineers, freelance workers, etc. will have to submit their bank statements and ITR papers.
- Loan tenure:EMIs will be lesser and manageable if the term of the loan is longer. However, for longer terms, interest will be more.
- CIBIL report:CIBIL score influence the final loan amount and eligibility. Banks examine and keep records of the credit history.
Home loan eligibility of top Indian banks
SBI
| Salaried | Self employed | |
| Age | 18-70 years | 21–70 years |
| Income | Rs.1,20,000 (p.a.) | Rs.2,00,000 (p.a) |
| Loan Amount | Rs.5,00,000-Rs.1,00,00,000 | Rs.5,00,000-Rs.2,00,00,000 |
| Tenure | 5 years-20years | 5 years-20years |
| Current Experience | 2 years | 3 years |
ICICI Bank:ICICI bank offers home loans to resident as well as non-resident Indians. Minimum age of 21 years is required for sanctioning of loan. Termination of loan must be done before or at 65 years of age. Applicant must be salaried with a regular income source. Minimum age of co-applicant should be 18 years.
HDFC Bank:HDFC bank offers home loans to resident as well as non-resident Indians. They also provide loan to planters, horticulturists, agriculturists and dairy farmers. Applicant must be salaried or self-employed and must be 21 years of age.