Never allow these basic factors affect your home loan eligibility


Never allow these basic factors affect your home loan eligibility

A home loan is a crucial key for all buyers to buy their dream homes. The home loan makes it financially secure for the buyers to own a home. When you apply for a home loan, the lenders and banks consider so many factors. They see if you are financially fit enough to handle a long-term commitment when it comes to a home loan approval. Besides, here are some of the essential factors which the banks consider to approve your home loan application.

Never allow these basic factors affect your home loan eligibility


Age is the first of all fundamental factors any lender or bankers consider for a home loan application. The younger you are, more likely to get approved for a home loan. This means you get a lot of time to repay the debt in the future. Clearly, the tenure for the payments of your home loan would be extended if you are as far away from the retirement period. In simple, young professionals ranging from the 20s to 30s can avail a home loan for a long-term tenure without any fear.

If you apply for a home loan at the age of 45 or 50, the EMI tenure for you would become less and the payment amount will be higher. Therefore, age plays a vital role in deciding the tenure of the loan and it directly correlates with the eligibility amount as well.

For example, when Mr. Raju applied a home loan to buy a flat in OMR Chennai, his monthly income was Rs. 40, 000 at the time. The loan eligibility for a 20-year tenure based on the ROI of 10% would be 18, 00,000 approximately. He was having only 15 years left for retirement. So his loan tenure came down to 12 to 15 years based on the same ROI and income. And now, his eligibility turned out to be 14, 60,000 for a time period of 12 years. Hence, the younger you are, eligibility for huge loan amount is more.

Income & Profession

Individual: Salaried individuals who work under government department or any registered private company fall under this group. At times, banks insist on wanting applicants to complete one year in the firm they are currently working at the time of application.

Independent Professionals: Professionals like doctors, dentists, architects, management consultants, chartered accountants, freelance workers, and engineers belong to this division. For this category, bank statements and ITR (Income Tax Returns) papers should be submitted.

Self Employed: Individuals who own a company or business and having other income sources like rented properties and shares come under this group. If you fall into this category, you can apply for a home loan if you have bank statements and ITR related papers to show in ready.

Rate of Interest

The eligibility for a home loan is always inversely proportional to the ROI (Rate of Interest). And if the rate is more, eligibility would become less and vice-versa.

Credit score

It is important to have your CIBIL score ready at the time of applying for a home loan. A CIBIL score above 750 out of 900 is a good credit score and is considered eligible. If your CIBIL score is poor due to outstanding payment dues and credit card closure would impact your home loan application negatively.

Long-term tenure

If the individual applies for a longer tenure, their eligibility will improve a lot. The EMIs will get lesser and manageable if you have a lot of time to pay the amounts back. If this situation is a downside, then you likely have to pay more interest payments. For instance, Ms. Shanti applied for a home loan at the age of 25 to buy a villa in Chennai OMR and she was lucky to have a long-term tenure to repay the loan without trouble.

Number of Dependants

Bankers will consider the number of dependents as well. Dependents such as children retired parents and spouse the applicant has. The eligibility criteria include the number of dependents the applicant has. In simple, you are judged based on how many dependents you have too.


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