5 factors that can affect your home loan eligibility

Apart from meeting all the basic eligibility criteria for availing a home loan, there are a few other factors to consider while applying for one. 

5 factors affecting your home loan eligibility

Depending on a financial institution, the priorities of eligibility may change; however, the common factors are-

1. Income

Based on an applicant’s job and the city they reside in, every financial institution defines a minimum income criterion. Applicants with inconsistent income, unconventional and risky jobs are considered risky borrowers. In contrast, individuals with a regular source of fixed income are preferable for lenders. 

2. Age

Applicants in the early years of their careers have higher chances of securing a best home loan in India. Lenders prefer young applicants as they have more years left as a working or salaried professional, and chances to default are minimal.

3. Credit Score

The approval of your loan depends highly on your credit score. Lenders thoroughly review an applicant’s credit score to know his/her loan repayment history. Applicants with a credit score of 750+ are always given more preference over those with lower scores. 

4. Employment status

Lenders favour applicants with secure jobs and regular monthly income. This ensures the proper repayment of home loan EMI. In addition, being employed with reputed private, public-sector companies or an MNC helps an applicant secure a home loan on flexible terms and housing loan interest rate.

5. Existing debt obligations

Having more than one loan may not be an issue for a lender. However, irregularity in your credit card bill repayments, unpaid EMIs, paying EMI after the due date may be a concern for your lender.

After reviewing the eligibilities, individuals may consider using an online home loan eligibility calculator to compute their EMIs and plan their finances accordingly.