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The eligibility to get a home loan in India is that the applicant must be a citizen of India and should have attained 21 years of age. Other than these criteria, there are other parameters that the banks take into consideration before approving the application for a home loan.
To decide the eligibility of an individual, banks take into consideration factors like the financial stability of the individual, past repayment history, age, etc. These factors further allow the lender to decide whether a person is capable of repaying the sanctioned amount within the tenure.
The credit score of the applicant
The credit score is a major factor in getting a home loan approved. A high credit score not only helps in getting a home loan easily but also helps in negotiating for the interest rates. A credit score is dependent on several factors like your existing debts, your repayment terms or credit card dues. These factors, when combined, generate a credit score, also known as CIBIL score. A CIBIL score above 750 is considered excellent and allows getting a home loan rather quickly with a low-interest rate.
Existing debts or dues
You may have several loans, and that is not a problem with your loan lender, the problem is when you have unpaid dues. So, the lender always looks on your pattern of repayment, such as how disciplined were your repayment. Missing due dates for EMIs is what makes the lenders alert about your repayment approach. To be disciplined on the repayments is necessary to have a seamless loan approval process.
The income of the individual
Income of the individual depending upon the city in which he works also plays an important role in reaching the minimum eligibility. Unconventional jobs which have an inconsistent flow of income raises doubts for the lender and also lowers the chances of getting a home loan.
Age of the applicant
A home loan is generally approved for a tenure of 25 years to 30 years. So younger the age of the individual greater will be the chances of getting the loan approved. Lenders hesitate to give away loans if they find you nearer to your retirement age. So, if you have taken a loan at the age 30 considering that you would retire at 60. The lender could easily approve you a tenure of 30 years while if you apply for a loan at the age 40, you can get repayment tenure of 20 years.
Employment status of the applicant
If you are employed with a renowned MNC or a private company, the banks, consider you more reliable to approve a loan. Similarly, if you are self-employed and you have a steady business, you are likely to get an approval on flexible terms.
Property details and LTV ratio
The property of the home and its value in future is also determined without sanctioning a home loan. If the value of the property is worth more in future, you have a higher potential of getting a home loan.
Other than these facts, lenders also consider the percentage of the down payment that you are paying against your loan. Generally, 10% of the loan amount is required for a down payment. So, if you have funds to pay at least 20% of the loan amount as down payment, the chances of getting a home loan are even higher.
