Before availing of a Home Loan, you need to be aware of the eligibility criteria and the documents required by the lender. Different financial institutions have different age limits, minimum income requirements and minimum CIBIL scores to apply for a Home Loan. Unless you fulfil all these parameters, your application may be rejected.
In addition, there are certain documents which you must submit with your housing loan application. Based on such documents, the lending institution will conduct verification at multiple phases and determine your eligibility.
It enables them to validate the existence of the property, proof of ownership, proof of sale etc., depending on the nature of the property and type of transfer. The list of documents required for a Home Loan may also vary based on the applicant’s occupation or employment type. Read along to get further insights about the same.
Home Loan Eligibility Criteria in 2023
Potential borrowers must meet certain Home Loan eligibility criteria before applying for a housing loan to experience hassle-free loan processing. The criteria include parameters related to age, income, employment status, bureau score, and property value.
Both self-employed and salaried individuals can avail of credits against separate sets of Home Loan eligibility requirements. The eligibility criteria for housing loan of Bajaj Housing Finance are simple and easy-to-meet. You can also check your Home Loan eligibility with the help of our Home Loan Eligibility Calculator.
Check eligibility for both salaried and self-employed individuals below and apply as per your profile.
| Salaried Individuals | Self-Employed Individuals |
|---|---|
| The applicant must be employed with a stable source of salaried income from a public or a private company or a multinational with a minimum 3 years of work experience | The applicant must be self-employed with a business continuity of over 5 years in the current enterprise |
| He/she must be between 23 and 75 years of age** | He/she must be between 25 and 70 years of age** |
| He/she must be an Indian (including NRIs) | He/she must be an Indian (resident only) |
Note that the Home Loan eligibility requirements are indicative and can include additional criteria.
**The upper age limit is considered as age at the time of loan maturity. Additionally, the upper age limit for applicants is subject to change, depending on the property profile.
Professionals, namely doctors and chartered accountants, can also apply for a housing loan for a competitive offer. While all criteria remain the same as stated above, professional applicants must also meet additional qualification criteria. Doctors must hold an MBBS or a subsequent higher degree, and CAs must have a valid COP.
Note: In the case of professionals, the years of experience are counted post qualification.
Read Also: Home Loan Eligibility Criteria for Doctors
Documents Required for a Home Loan
Apply with the following set of Home Loan documents*** to avail of funds from Bajaj Housing Finance. The documents required for a Home Loan are minimum to shorten the processing time.
KYC Documents
KYC documents (documents that serve as proof of your identity and address)
Mandatory Documents
Mandatory documents (Form 60 or PAN Card)
Proof of Income
Proof of Income (based on the applicant’s profile; includes latest salary slips for salaried applicants and P&L statements for self-employed applicants)
Business Proof
Proof of business existence with a vintage of not less than 5 years (for self-employed applicants only)
Account Statements
Statements of your primary account of your last 6 months as proof of income
***The list of documents required for a Home Loan is indicative. Borrowers may need to provide additional documents to showcase their Home Loan eligibility.
All applicants must also provide a set of property documents required for a housing loan, such as the title deed and allotment letter.
Use our user-friendly Home Loan EMI Calculator to figure out a suitable loan amount and the instalments payable before applying for the loan.
Documents Required for Salaried and Self-Employed Applicants
The following documents are required when applying for a Home Loan:
1. Completed and signed Home Loan application form
2. Mandatory Documents
- PAN Card
- Form 60
3. Proof of Identity: (Any one of the below)
- Aadhaar card
- Driving licence
- Voter’s ID card
4. Proof of Age: (Any one of the below)
- Birth certificate
- Aadhaar card
- Passport
- Bank account passbook
- Class 10 marksheet
- Driving licence
5. Proof of Residence: (Any one of the below)
- Aadhaar card
- Utility bills like electricity bill, telephone bill, etc.
- Passport
- Voter’s ID card
- Ration card
- Certified letter by recognised public authority
6. Proof of Income for Salaried:
- Payslip for a minimum of last 3 months
- IT returns of a minimum last 3 years
- Form 16
- Certified letter from employer
- Promotion or increment letter
7. Proof of Income for Self-Employed:
- Balance sheet and Profit and Loss Statement of the business attested by registered CA
- Income tax returns of at least the last 3 years
- Business licence or other similar documents
- Professional practice licence for doctors, consultants, etc.
- Registration certificate of business establishment for shops, factories, etc.
- Business address proof
8. Property Documents:
- Title deeds
- Receipt of payment to developer or seller
- Allotment Letter or Buyer’s Agreement
- Sales Agreement
- Construction estimate details by architect or civil engineer
- Plans approved by local authorities
- Proof of no encumbrances on property
9. Other Documents:
- Passport–sized photographs of applicants and co-applicants
- Proof of self-contribution
- Ongoing loan details
- Bank statements of the last 6 months showing repayment of loans, if any
- Cheque for processing fee towards the Home Loan provider
For Salaried:
- Employment Contract or Appointment Letter
For Self-Employed:
- Business profile
- Most recent Form 26AS
- List of Directors and Shareholders with individual shareholding certified by a CA or CS
- Partnership deed if the business is a partnership firm
- Articles of Association and Memorandum of the company
Disclaimer: Additional documents may be requested at the time of loan processing.
Factors Affecting Home Loan Eligibility
The Home Loan eligibility of an individual depends on various factors. These include:
1. Applicant Age
An individual’s age determines a suitable tenor for the Home Loan. Applicants at the early stage of their career can conveniently avail of the loan for an extended tenor due to their repayment potential for a long term. Lenders cap the maximum borrowing age for salaried and self-employed applicants to reduce the risk of default in repayment. Thus, age is a criterion taken into consideration when assessing eligibility.
2. Credit Profile and Score
An applicant’s credit profile and score are other essential Home Loan eligibility parameters that help lenders identify the risk involved in extending the loan. Individuals with a high credit score of over 750 and a healthy credit profile of timely repayments stand a better chance of receiving prompt approval for a housing loan.
3. Employment Status/Business Stability
Based on the applicant’s profile, financial institutions also check their income stability. Employment of 3+ years for salaried applicants depicts a stable income source and an increased propensity for timely repayment.
Similarly, self-employed individuals with a current business vintage of 5+ years depict suitable Home Loan eligibility with stable occupation and a reliable income for timely repayment.
4. FOIR
Fixed Obligation to Income Ratio, or FOIR, is a measure of an applicant’s repayment capacity. It is calculated as a percentage of one’s monthly income against the fixed monthly liabilities, such as EMIs and rent. FOIR contributes to the overall housing loan eligibility and a lower FOIR can enhance your chances for a quicker sanction.
5. LTV
The Loan-to-Value ratio, or LTV, represents the maximum loan amount a lender can extend as a percentage of the mortgaged property’s current market value. As per the RBI guidelines, lenders can extend 75% to 90% of the property’s value as a Home Loan to individuals.
| Loan Amount | LTV ratio |
|---|---|
| Up to Rs.30 Lakh | Up to 90% |
| Above Rs.30 Lakh and up to Rs. 75 Lakh | Up to 80% |
| Above Rs.75 Lakh | Up to 75% |
Applicants must, therefore, make a down payment of not less than 10% of the property’s valuation to avail of the required loan. The amount of down payment required and the total loan value available also depend on the LTV set by the lender within the capping mentioned in the above table.
*Terms and conditions apply
Frequently Asked Questions
When you are applying for a Home Loan, your salary is one of the major aspects of eligibility. In fact, even if you have a high-income salary, if you have existing financial obligations, your debt-to-income ratio will increase, which is another factor that lenders will inspect.
The following factors are taken into account when determining income eligibility:
- Net monthly income
- Financial obligations
- Any other surplus income from other sources
You can use our housing loan eligibility calculator to better understand your Home Loan eligibility based on salary.
There are several ways to improve your Home Loan eligibility:
- Maintaining a credit score higher than 750 is recommended since lenders offer more lenient terms to applicants with an ideal score of 750+
- Adding a financial co-applicant to your Home Loan can not only reduce your debt but also improve your Home Loan eligibility
- Repay your outstanding loans and debts to maintain a healthy financial background and expand your existing repayment capacity
- Declare any additional sources of income that you may have, as this will increase your financial capability
The eligibility of a joint Home Loan depends upon the applicant’s relationship with the co-applicant. Any co-applicant who is directly related to the primary applicant can be eligible, with certain considerations. Spouses are a common choice when it comes to availing of a joint Home Loan.
Note that all co-owners of a property are co-applicants on a Home Loan application. However, all co-applicants are not necessarily co-owners.
Applicants with a bad credit score can find it difficult to get approved for a Home Loan because lenders tend to approve loans for applicants who show the capacity to make payments without defaulting on the EMIs. The minimum CIBIL score required for a Home Loan is lender specific, but a score below 675 is considered to be unreliable.
However, having a bad credit score is not the end of one’s Home Loan borrowing journey. Consider improving your Home Loan eligibility before applying for a Home Loan to enjoy competitive terms.
There are several factors that determine the eligibility for a Home Loan:
- Applicants' Age: Younger candidates are considered more suitable for a Home Loan as they are more likely to sustain the EMI payments across a 40-year repayment tenor.
- Employment Type: The type of employment also affects the eligibility requirements for a Home Loan.
- Monthly Income: Income from either a salary or a business to determine your repayment ability.
- Credit Score (CIBIL score): Lenders assess your credit score to determine your prior repayment experiences.
- Existing Financial Obligations: Lenders assess your ongoing financial obligations, to see if you can accommodate a new EMI responsibility.
- Loan-to-Value Ratio (LTV): LTV is the maximum amount of loan a lender can sanction based on the property’s current market value.
