Monthly income matters the most when it comes to Home Loans. It is one of the crucial factors when it comes to determining your Home Loan eligibility. Each bank and Non-Banking Financial Companies (NBFCs) have their criterions which are required to be met. With NBFCs taking serious efforts to attract people and expand their diversified base, the eligibility criteria seem less stringent than before. NBFCs are more flexible in their operation as compared to the traditional lenders. However, even NBFCs cannot compromise too much on factors that influence your loan eligibility.
It is important that you fulfil the pre-requisites if you are to avail a Home Loan. There are several factors that affect your Home Loan eligibility:ity:
Age: A factor which matters a lot. Given the fact that the maximum tenor of a Home Loan is up to 30 years; if the age is on your side, availing a Home Loan becomes quite realistic. When you are younger, you are more capable of repaying the Home Loan than people who are close to their retirement. Thus, lenders feel more secure when they grant a Housing Loan to young borrowers.
Profession: Lenders are reluctant to provide Home Loans to applicants who do not belong from a corporate structure, this is due to the question mark over their repayment capabilities. Employees working in industries other than the traditional ones do not have a job security, and thus, a lender cannot vest his/her entire trust on an applicant. However, a flexible financial institution such as an NBFC is open to providing Home Loans to people who are conducting business and are not a salaried employee.
Job Stability: When providing you with a Home Loan, a lender considers your job stability. If you tend to job hop regularly, it will cause a negative impact on your Home Loan eligibility. A monthly salary along with a stable job are the crucial factors which determine the financial capability of a person. All of it either benefits or causes trouble when you apply for a Home Loan.
Property Age: When providing you with a Home Loan, many lenders look into the property which you are buying. But why wait till the inspection? Why not research yourself and let go of an old property option? The age of structure plays a vital role as the loan period if long and a lender cannot afford to lend money to a project which might suffer from structural collapse.
Credit Score: Single-handedly one of the most crucial factors when you avail a Home Loan. A credit behaviour is taken into consideration by the lender. A CIBIL score or a credit score is a number which gives a financial institution an idea about your financial standing. If you have a high credit score, lenders will be more open towards providing you with the loan. A CIBIL score ranges between 300 to 900 and for a Home Loan application to get accepted, you need a score of 750 and above. However, if you are slightly below the mark, you can approach an NBFC as they are more flexible in their operations.
Co-applicants: One of the most undermined factors, co-borrowing a Home Loan creates a massive difference when you borrow a Home Loan with another applicant. If you are a co-applicant, your Home Loan Eligibility improves drastically given you both have a decent financial standing. As a co-borrower, you can even apply for a bigger sum and avail additional benefits which are not possible when you apply as an individual.
Financial institutions to help the prospective buyers in checking their eligibility factor have introduced a Home Loan eligibility calculator. This can be used to calculate the EMIs based on the loan amount, tenor and the rate of interest.
Arwind Sharma is a financial advisor with an experience of more than 7 years. He has worked for topmost financial firms in India and has been a visiting faculty at many reputed institutes in India. Currently based in Pune, Arwind Sharma is a name to reckon with when it comes to financial management for big brands. A post-graduate in business economics, he is an alumni of Princeton University, USA. During his free time, Arwind teaches children from marginalised sections of society and also work on his blog.
