How To Know the Eligibility For a Home Loan When Are Salaried

by Puneet Sharma Finance

One of the biggest and important decisions in life is to buy a home. It is a one-by-one step process as it requires extreme care. Many builders and construction magnets offer you properties with wide range of options and you can choose any property that suits your needs. But the important thing is the money to buy a new home. Tension arises in many cases as how to pay for the home. Should you go for a home loan? What is your budget? How much loan can you get or are eligible for? It also comes down to the fact how much are your savings after a few years of your professional life has started. But at the last, the budget of buying a new house is decided by how much loan you are going get.

What is Home Loan?

When an individual gets an amount after applying for a loan to buy a residential property by a bank or a financial institution, the loan is known as Home Loan. Here, the lender holds the title of the property until the loan is paid back completely along with interest. It is mostly for a longer tenure of somewhere between 5 and 30 years as the amount is on the higher side which takes the time to be fully repaid.

The current RBI norms suggest that the person applying for a home loan should at least pay 20% of the price of the home he/she is going to purchase. This means that the remaining 80% of the cost of the house will be provided by the bank or any financial organization. The question now arises to everyone’s mind – How much home loan am I eligible for? Here we will give you the points to your Home Loan eligibility before you apply for one at a bank or a financial institution.

Eligibility Criteria

Every lender has different eligibility criteria for a home loan. They include your monthly income, work experience, age, credit card history and other loan repayment record.

Who can apply?

Anyone who is salaried or is self-employed can apply for a home loan.

Age:

The applicant applying for a home loan should be at least be 21 years or above

Source of income:

If you have a regular source of income it becomes easier for the bank to understand that you will be able to make timely payments of the loan. The bank will require your salary slips as to confirm your employment and monthly income.

Work experience:

Having a stable job helps the applicant build a clean image in front of the bank. It makes a better image of the applicant if he/she has a stable job and work experience.

Credit card history:

If you have a clear and good credit card repayment history, it adds up for a quick loan approval.

Tax Benefit:

The tax benefit on home loan has been divided into two sections -

Repayment of the loan amount - Under Income Tax Section 80C, a maximum tax deduction of Rs 1,50,000 is considered.
Repayment of Interest Rate on home loan under the Section 24 of Income Tax Act, you are eligible to avail the tax benefit on the amount on which the interest is paid on home loan to a maximum limit of Rs. 2 Lakhs

Documents Required For a Home Loan:

Bank or any financial institution requires some documents which have to be submitted by the person applying for a home loan. These include passport-size photographs, your salary slips, identity proofs, and address proofs.

Top Five Housing Finance Companies in India: