Key eligibility criteria for a home loan include monthly income, age, credit score, and down payment. The borrower's age, income, and credit score determine the loan amount and interest rate.
Home loans are granted if you meet the eligibility criteria
Bank officials state that certain eligibility criteria are required for any loan. It's true that home loans require some key qualifications compared to personal or vehicle loans. Financial institutions or banks won't just hand out loans upon request.
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Proof of projected income
The monthly income of home loan applicants is crucial. Lenders consider your income over the past 5 years and require proof of projected income for the next 10 years. This determines the loan amount and EMI. The applicant's monthly income should be at least Rs 25,000-30,000. This varies from bank to bank.
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Loan amount depends on your income
The loan amount depends on your salary or income. So, if you have any extra income, it's good to show it to the lending bank or financial institution. This also increases their trust in you.
The customer's age should be between 21 and 65. Age is very important for home loans. The borrower has to repay the loan over 20-30 years. So, their age and the loan amount are key factors. People between 30 and 40 usually get home loans quickly.
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Credit scores
Credit scores are a problem for many these days. Check your credit score before applying for a home loan. A score between 700 and 750 is ideal. It's harder to get a loan with a lower score, and even if you do, the interest rate might be higher. So, maintain a good credit score.
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Keep your down payment ready
Have your down payment ready before approaching a bank or financial institution for a home loan. Having at least 20% upfront reduces your loan amount and increases your chances of approval.
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Clear existing loans
Clear any existing loans before applying for a home loan. Lenders check for outstanding debts. Paying off loans beforehand reduces your debt burden. Also, be transparent with the bank about any existing loans.
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Review bank's terms and conditions
Review the bank's or financial institution's terms and conditions to ensure they are favorable before applying. Include any other earning members of your household on the application. This builds trust with the lender. Disclose any additional assets or secondary income sources.
