Home Loan Eligibility For Salaried Individuals

Before applying for a home loan it is important to gauge whether you are eligible for it or not. Approaching a bank for a home loan without meeting the bank’s eligibility criteria may get your loan application rejected which in turn will lower your credit score. The repercussions of having a low credit score makes it harder for you to get your home loan approved. 

Although different banks have different eligibility criteria, some basic Home Loan Eligibility Criteria are mentioned below:

• The borrower must be an Indian resident and an employee of a firm that is either a multinational, public limited, or a private company. Even self-employed individuals such as doctors, C.A’s, etc. are eligible to obtain a housing loan
• The applicant must not be younger than 21 years of age, however, some banks disburse loans to applicants that are over 18 years of age. The maximum age that an applicant can be is 58 in case of salaried individuals and 60 in case of government employees and employees of public limited companies
• One of the most important factors that banks consider before approving your home loan is your salary. Banks usually are allowed to disburse a loan amount up to 65 times the net income of the individual
• If the applicant has other loans he is paying off, the changes of his home loan getting approved diminishes
• Most banks provide a maximum loan that amounts to only 80 – 85% of the value of the property/house. The rest of the amount would have to be provided by the applicant in the form of down payment. The applicant does not pay at least 20% of the value of the property/house as down payment will not be eligible to obtain a housing loan
• The applicant must have been living in the city for at least 2 years before opting to apply for a home loan

Making sure that you are eligible to obtain a home loan before applying for it increases your chances of approval. Getting your home loan rejected will have an adverse effect on your credit score which means that all future loan applications are more likely to get rejected. Use online portals that tell you if you are eligible for a particular loan or not. This is considered as a soft inquiry and will not have any effect on your credit score.