by Many people, who plan to invest in property, tend to make their dream a reality much faster by going for a home loan! However, it is a fact that when an individual plans to build their dream abode, most of the time, everyone is not willing to go all in, so this is where a home loan comes in. Further, to make it clear, a home loan is not easy money lent by a bank as the prime factor, i.e., housing loan eligibility is a mandatory step to get it.
It is a well-known fact that the cost of real estate in India is soaring with time, and to be a homeowner in the current era, one usually has to avail of a home loan.
What is a home loan?
A home loan is a credit facility provided by banks and NBFCs (Non-Banking Financial Companies) to those planning to buy a house or land, build a house on their plot, or for the renovation of their residence and maintenance needs.
In simple terms, when an individual goes for a home loan, they mortgage their property to the lender. Further, each month, a portion of the principal amount, along with interest, is paid through EMIs. Notably, both the interest and principal components qualify for a tax deduction.
It is important to know that one gains complete ownership of the property after the end of the tenor when the interest, as well as principal, is fully paid.
What is housing loan eligibility?
It is basically a set of criteria basis where a financial institution assesses whether the customer is creditworthy or not to avail and repay a particular loan amount. The two prime factors of housing loan eligibility are income and repayment capacity of the borrower. However, other factors include age, financial position, credit history, score, etc.
What are the factors that affect your home loan eligibility?
- Income – Income is the first and foremost factor affecting housing loan eligibility. As there is no collateral here, the financial institutions want to know that you have a decent income from your job and other sources that allow monthly payments. So, the greater the salary, the greater the chances of getting an approved home loan.
- Age – The financial institutions look for borrowers who can repay the loan amount satisfactorily before the age of 60, which is mostly the retirement age for any individual. Therefore, the banks and NBFCs are more likely to grant you a home loan if you are young. So, age is an essential factor in determining your loan period and eligibility amount.
- Credit History – No credit history can be a hurdle for individuals planning to go for a home loan. As per the experts, if one doesn’t have a credit history, the lender on the other side will have no reference point to use while analyzing their credit conduct. So, before you apply for a home loan to build your dream address, make sure you have a good credit history of at least a few years.
- Employment status – Along with income, employment status also plays a very important role in housing loan eligibility. For example, being employed with a Multinational Company (MNC) or even a reputed private company makes you more reliable as a borrower. Similarly, a self-employed individual with a stable business income has a higher chance of getting approval than those with an unstable job or business.
Undoubtedly, one of the most significant financial obligations one makes in life is a home loan. Back in 2020, when I was planning to buy my dream house in Chandigarh, The City Beautiful, I was on the hunt for a home loan and evaluating home loans from different lenders. One of my close friends in the banking sector helped me check my housing loan eligibility and advised me to go for a home loan from the Bajaj Finserv application.
Times have changed, I never thought that going for a home loan would be so easy as one only has to download an application and after a few easy steps, it is all done!
As I made sure to do my groundwork, I also ended up at Bajaj Finserv to get the home loan. Surprisingly, it was sanctioned within a few minutes and is hassle-free. So, to all those looking for a home loan, I highly recommend it!
