A house is one of the basic requirements of every individual and family. With the ever-increasing cost of real estate in urban and rural areas, it is only possible to build or buy a home with some financial assistance. A home loan is the best way to get closer to one’s dream of owning a home. Most leading financial institutions provide home loans to eligible borrowers. A home loan eligibility calculator helps a borrower assess the loan amount for which he can be eligible.
A home loan or housing finance is a secured loan where the property itself acts as collateral for the loan. Since it is a secured loan, the interest applicable on a housing loan is relatively less. A housing loan reduces the borrower’s financial burden and helps him buy a house without spending all his savings. If you are a salaried employee, you must know the eligibility criteria for a home loan before you apply for one. Here is everything you need to know about home loan eligibility criteria for salaried employees.
Eligibility Criteria for a Home Loan for a Salaried Employee
Salaried employees can avail of housing finance if they meet the following criteria:
● A salaried employee should be between 18 to 60 years before applying for a housing loan.
● If the home loan applicant lives in Delhi, Mumbai, Bangalore, Pune, or Chennai, his minimum salary should be at least Rs.20,000 per month.
● If the home loan applicant lives in any other city besides the ones mentioned above, his salary should be a minimum of Rs.15,000 per month.
● A salaried employee who wants to avail of a home loan and is an employee at a private limited company or a partnership firm should hold at least a Bachelor’s degree in any discipline.
● A salaried employee applying for a home loan and working for a public limited company, a multinational corporation, a central or state government, or a public sector company requires no minimum qualification.
Factors That Affect Home Loan Eligibility of a Salaried Employee
A lender checks multiple factors before providing a housing loan to a salaried employee. A few factors that affect the home loan eligibility of a salaried employee are:
● Age of the borrower: Age is a crucial determinant of an individual’s eligibility for a housing loan. A younger applicant can get a housing loan at relatively lower interest rates than an aged person. The interest rates affect the monthly payment an individual has to make towards the loan and, ultimately, the cost of the loan. Additionally, a person of a lower age can get a home loan of longer tenure, which will again reduce his monthly repayment burden.
● Income of the borrower: An individual with a higher income can afford to pay larger EMIs (Equated Monthly Instalments) towards his housing loan. Lenders are comfortable providing such, salaried individuals with a higher loan amount than others. A home loan eligibility calculator can help an individual determine how much loan he is eligible for.
● Existing loan obligations of the borrower: Along with the borrower’s monthly income, his existing loan commitments also affect his home loan eligibility. A person with more monthly financial commitments from other debts or credit cards has less cash available monthly to pay his housing loan EMI. Borrowers provide a lower loan amount at higher interest rates to such individuals.
● Credit report of the borrower: Lenders check a loan applicant’s credit history and credit score. An individual’s credit report clearly indicates how disciplined an individual has regarded his loan repayments in the past. An individual with a good credit report has a better chance of getting a housing loan of a higher amount at lower interest rates.
● Regulatory requirements: There are regulations on the maximum loan amount a person can get as a proportion of the property’s purchase price. The set limits may vary a little based on the cost of the residence.
Salaried employees can apply for a housing loan with a reputed bank and get easy housing finance. A home loan EMI calculator helps an individual determine the ideal loan amount he can comfortably repay in easy monthly payments to the lender.
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