Everything You Need to Know About Home Loan Eligibility

Owing to the astronomically high prices of real estate, having your own home is no less than an achievement today. Even if you have funds to buy your dream home, there are high chances that a house property could drain all your hard-earned savings. Fortunately, there is an easy alternative – home loan. With home loans, you can purchase your dream home without exhausting all your savings.

However, there is a catch! While availing a home loan could be easy, your loan application gets approved only when you fulfill the lender’s eligibility criteria. Therefore, it is necessary to check your eligibility before you apply for the loan.

The home loan eligibility criteria could vary from lender to lender, but the most common factors are:


You should belong to a specific age group to be eligible for your home loan. For example, usually, lenders require you to be within the age bracket of 18-65 years for loan approval. This is because, as you grow older, your repayment tenure decreases which increases the risk of default. This is the reason why lenders are more inclined to approve loans of borrowers who have a significant number of working years left. Also, your age will have a direct impact on the terms and conditions of the loan since it increases the risk for the lender. Hence, they prefer those having a significant number of professional years ahead of them while approving a home loan application.


Lenders consider your income and financial position as an indicator of your repayment capacity. If you have a stable income and a good job profile, the lender can offer you a higher loan amount and a lower rate of interest. However, if you have changed jobs frequently or have a lower income than their eligibility criteria, the lender can reject your loan application. To fulfil the eligibility criteria, you must have a gross total income of at least Rs 20,000 per month if you live in Tier 1 or metro cities and Rs 15,000 per month if you live in other cities.

Financial stability

The lender can also considers your financial details to determine if you are eligible for the loan. It could be your education qualification, job experience or the duration of your business continuity. Your current obligation and debts can also affect your eligibility. If you have other outstanding debts such as credit card outstanding, personal loans, etc, apart from the home loan, it could lower your home loan eligibility too.

Credit score

Your credit score is an indicator of your creditworthiness which indicates if you will be able to repay the loan or not. The ideal credit score to be eligible for a home loan is above 700. Though lenders could approve a loan with a lower credit score, they usually charge a high interest rate. If you have a good credit score, it means that there are fewer chances of you defaulting on the loan payment, helping you get better loan terms. Therefore, it is best to apply for a home loan only when you have a good credit score.

Fulfilling the lender’s eligibility is of utmost importance to avail a home loan. If you do not fulfil the eligibility criteria, the lender can reject the loan application lowering your credit score. This is why before you take a home loan, check your eligibility through an eligibility calculator and then proceed with the loan application.

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