Planning to buy a house? Looking for a home loan? Before you take the plunge, it is important that you understand the home loan eligibility criteria for all banks and financial institutions. You can save yourself from getting your application rejected if you know you are an eligible candidate for the loan. You can also save time while applying a loan if you know you are eligible for the loan.
If you meet the criteria set by banks for home loans, you make for a strong application. Most banks and lenders have a different set of criteria for judging applicants. However, some factors are common among all lenders such as age, employment status and credit score. In the following sections we give you a breakdown of these criteria.
Home Loan Eligibility for All Banks in India
The housing loan eligibility criteria varies from one bank to another. However, there are some factors that are common across banks and lenders.
Most banks offer loans to people who fall in the age bracket of 21 years to 65 years. Some banks such as the State Bank of India offer home loans to people in the age group of 18 to 70 years. Another criterion for home loans is the person should have a constant income. An annual income in the range of Rs5 lakh to Rs7 lakh, or more, makes you an ideal borrower.
It is important that you have a good credit history. If you have credit cards or existing loans, make timely payments to maintain a good credit score. If your credit score is above 750, your loan will be approved without any hitches.
It helps your case if the project you are investing in is pre-approved by the bank. The status of the project will also determine your case for a lone, depending on whether it is complete or under construction. Eligibility criteria will also vary if you are salaried, self-employed, retired, student, or a homemaker.
Following are the eligibility criteria for some of the top banks in the country:
SBI Home Loan (For salaried individual):
-The borrower should be within the age group of 18 years and 70 years.
-The borrower should have a work experience of at least two years.
-The maximum loan amount that a salaried individual is eligible for is Rs3 crore.
HDFC Home Loan (For salaried individual):
-The borrower should fall within the age group of 21 to 60 years
-The borrower should have a minimum work experience of one year.
Axis Bank Home Loan (For salaried individual)
-The borrower should be within the age group of 21 to 60 years.
-The borrower should have a minimum work experience of two years.
-The maximum loan amount is decided by the bank based on the borrower’s income and other factors.
ICICI Home Loan (For salaried individual)
-The borrower should be within the age group of 21 to 60 years.
-The borrower should have a minimum work experience of two years.
-The maximum loan amount is decided by the bank based on the borrower’s income and other factors.
Housing Loan Eligibility Calculator
The maximum loan you are eligible for is decided taking into account various factors. Your eligibility will also vary from one lender to another. The easiest way to find out if you are eligible for a loan and the amount you are eligible for is to use the eligibility calculator.
The housing loan eligibility calculator is a free tool provided online by almost all lenders on their website. Your eligibility will be decided based on your monthly income, loan tenure, rate of interest as well as existing EMIs, if any. Your age will also play a key role in deciding your eligibility. You can key in the details on the eligibility calculator and find out your eligibility within an instant.
Benefits of Home Loan Eligibility Calculator
With a home loan eligibility calculator, you can get your eligibility within seconds. The calculation is done instantly and you can tweak the entry points to see if you can enhance your eligibility in any way. It saves your time. You need not sit and calculate your eligibility using a tedious formula.
You can use this tool to check your home loan eligibility across various lenders and choose the one that gives you the most benefit. It also helps save your time when you apply for the loan.
How is Eligibility for Home loan Calculated
Your home loan eligibility is calculated using four basic factors—your monthly income, rate of interest of the loan, tenure of the loan and any existing EMIs. Your age will also play a part in calculating your eligibility.
While calculating your eligibility for a housing loan, lenders may also take some other factors into account. Lenders consider factors such as whether you have a regular source of income, how long you have before you retire, among other things. If you are going for a joint loan, the co-borrower’s details will also be considered. Details such as income, age and credit score will be taken into account.
Your credit score is another factor that the lender will take into account while calculating eligibility. A credit score above 750 should do the job. The status of the project you are interested in will also play a part in calculating your eligibility.
FAQs
Is there anything I can do to improve my chances at being eligible for a loan?
Yes, you can improve your home loan eligibility. The first thing you can do is get a co-borrower for your loan. If the co-borrower has a good credit score and a regular source of income, you will be eligible for a higher amount of loan. Make sure you have a regular source of income. Another thing you can do is maintain a good credit history. Make timely payments of your EMI and credit card bills. Your eligibility improves if you have fewer dependants to your income.
How do I find out if I am eligible for a loan?
Before you apply for a loan, make sure you understand the eligibility criteria of the bank. You can find the eligibility criteria on the website of the bank. You can also visit the nearest branch of your bank and ask for a checklist of home loan eligibility criteria. Most lenders also provide an eligibility calculator where you can key in some details such as age, income, existing EMIs, rate of interest and loan tenure. The eligibility calculator will instantly tell you if you are eligible for the loan and how much loan you are eligible.
How does credit score affect my eligibility for a home loan?
Your credit score is a reflection of your credit history. It tells the bank or financial institution that you have been regularly paying your debts and you will make for a good borrower. The bank needs to gauge the risk in lending you money. If you have a good credit score, you are more likely to keep your EMIs going. So there is a lower chance of you defaulting on the loan. On the contrary if your credit score is low, it gives a signal to the bank that you may not keep your commitment to EMIs. This could lead to defaults. Therefore, it would mean you are not an ideal candidate for a loan.
I have an existing home loan. I want to move to a new house and need to get a loan for that. What should I do?
If you have an existing home loan, it is not advisable to take a second home loan. Most banks do not allow a second home loan. However, banks do allow borrowers to convert their loans. These are called home conversion loans. You can convert and add to your existing home loan to purchase the second house.
The other option is to go for a top-up loan. This lets you borrow funds over and above the home loan.
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