A home loan is an easy option for people who wish to buy a home of their own but do not have the funds to do so. Today, you can avail a home loan easily from the lender of your choice offering you the lowest home loan interest rates. Simple although it may seem, getting a home loan also requires the borrower to fulfil certain criteria. The loan applicant must qualify for a housing loan and for this, they must meet certain eligibility parameters already set by lenders. This is done to ensure that the applicant is credible and will repay the loan amount without defaulting. So, how will you know if you are eligible or not?
Are You Eligible for a Housing Loan?
The loan applicant or the borrower must meet the eligibility requirements for the housing loan. Failing to meet these qualifying parameters can lead to loan rejection and negatively impact a borrower’s credit profile. Here are a few important points essential for housing loan eligibility:
- The age of salaried applicants should be between 23 and 62 years and for the self-employed, it should be between 25 and 70 years.
- The income of the applicant/applicants should be steady and enough to cover all expenses and EMIs. This gives confidence to the lender and increases the applicant’s housing loan eligibility.
- Salaried applicants must have a minimum work experience of 3 years in an organization. While the self-employed must be able to show business continuity of at least 5 years.
- Applicant must not be a defaulter on any previous loan, have no other debts running, and maintain a CIBIL score of a minimum of 750 and above to meet the housing loan eligibility.
- FOIR or Fixed Obligation to Income Ratio of the applicant should be below 40%. In other words, the monthly expenses of the applicant must not be more than 40% of the applicant’s total income.
- Housing loan eligibility of an applicant also depends on the number of financial dependents they have. The higher the number of dependents, the lower is one’s housing loan eligibility.
Keep the above factors in mind while calculating the housing loan eligibility. Fulfilment of the given criteria will enhance your financial credibility in the eyes of the lender and help you get a loan easily.