Home Loan Documents, Eligibility & Tenure

In this article, I will discuss Home Loan such as what is the home loan, eligibility criteria for applicants, required documents for home loan & interest rate, etc in this article.

Introduction

House is a necessity for all human beings & owning a house is a dream for everyone today. During earlier days, only a few people had the privilege to have their own house but now with the availability of house loans provided by banks many people’s dream has come true. These loans are provided either to buy an already built house or a flat or to construct a house on the land.

Also read: Personal Loan Documents

Home Loan Eligibility

A definite method has been channelized by lenders to calculate the ability and willingness of a customer to be authorized for a home loan. All people who are having a regular and steady income can qualify for a house loan easily, hence a salaried or a businessman is eligible to get a house loan. Some areas and facts that banks take into consideration before sanctioning a bank loan to and individual are:-

  1. Age: – Tenure of a house loan depends on his/her age as your age, like a person above 60 years of age can’t qualify for a home loan for which tenure can be of more than 10 years.
  2. LifeStyle: – Banks do take into account of one’s lifestyle as in if one is earning 50,000, how much he requires to bear his household and personal expenses per month will be deducted from his monthly income and the remaining amount which comes is considered as his surplus or the amount that he can pay an EMI or installment.
  3. Cibil Score: – The most important thing that banks take into considering is your CIBIL score. If you have been found guilty of not paying your credit limits or loan installments properly in past recent, in that case, the bank will straightaway deny your loan application.
  4. Loan Records: – Last but not least, banks check all your past and current records of loans & credits. Have you paid your previous loans on time and currently how many loans are due from you on accounts?

If one passes all these criteria, he/she as per his income and depending on the banks gets his/her desirable amount of home loan at ease.

Check Your EMI with our Home Loan EMI Calculator.

Home Loan Providers

Generally, Home Loans are provided by Banks like the public sector, the private sector, multinational banks and all NBFC’s (A Non-Banking Finance Company) and financial institutions like LIC companies, mutual fund companies, etc., at a very competitive interest rate. Home loan providers like public sectors do a lot of paperwork in addition to have a deep look at your eligibility that is the reason why people these days are moving towards private NBFC’s for home loans for easy processing. Some of the most popular finance companies and NBFC’s names are mentioned below for reference;

  • HDFC
  • LIC Housing Finance
  • PNB Housing Finance Ltd.
  • Dewan Housing Finance Corp. Ltd.
  • GRUH Finance Ltd.
  • Can Fin Homes
  • Repco Home
  • India Bulls Housing Finance
  • Tata Capital
  • Reliance Capital
  • Sundaram Finance Group

Document Required for Home Loan

If one wants to avail of a home loan then, there are certain documents that are required to be submitted, failing which the loan can be rejected. Hence when you are requesting a loan or while loan processing takes place extra care needs to be taken to submit the required documents asked by the bank. It is important to keep in mind any misleading information or false documents that are submitted can lead to rejection of your house loan.

Certain documents asked by all the banks are the same but few are different. So, it is the duty of the customer to clearly find out and understand the exact documents that need to be submitted while applying for Home Loan. Here are some general documents asked by most of the banks for Home Loan Application. These documents may be different for a salaried person and for a self-employed/professionals.

Documents required for a Salaried Person

  • Duly filled application form with the recent photograph
  • Age proof (like PAN Card, passport or 10thstd marks card)
  • Address proof (Passport, Aadhaar Card, Driving License, election card)
  • Latest degree certificate
  • Salary slip of the last three month (Latest)
  • Form 16 of the last two years
  • Bank statement of the last 6 to 8 months (Salary account)
  • Processing fee cheque in the name of the concerned bank
  • Photocopy of all the documents related to the house

Documents required for a Self-Employed / Professionals / Businessperson

  • Duly filled application form with the recent photograph
  • Age proof (like PAN Card, passport or 10thstd marks card)
  • Address proof (Passport, Aadhaar Card, Driving License, election card)
  • Latest degree certificate
  • Profile of the business along with proofs related to the existence of the business
  • Three years income tax returns with P&L a/c and balance sheet which is certified by a Chartered Accountant. (Latest tax returns filed)
  • One year bank statement of both personal and business account
  • Processing fee cheque in the name of the concerned bank
  • Photocopy of all the documents related to the house

As mentioned above, these are only indicative documents and which may differ from bank to bank.

Home Loan Interest Rate & Tenure

The present interest rate for the home loan is 8.50 to 9.75%, which differ from bank to bank. Home loan interest rates have been fluctuating in the past few years. Below is the table which shows the House Loan interest rate since 2014. The tenure period for the home loan can be 5 to 30 years depends upon your loan requirement or loan EMI. You can calculate your home loan EMI by using this EMI Calculator for better understanding.

YearInterest Rate
20198.45 to 9.75%
20188.50 to 9.75%
20178.60 to 9.75%
20169.50 to 11.75%
201510.00 to 10.65%
201410.10 to 11.00%

When a house loan is taken, there are other charges also included with, like processing fee, valuation, legal, or stamp duties. The processing fee is based on the amount of the loan that is taken and the bank from which we are taking, so those are other things to be considered apart from the interest rate while applying for Home Loan.

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