Home Loan Eligibility Criteria

Banks calculate the amount they can give to you primarily on your net monthly earnings. They take into account their previous experiences and your current track record which would indicate whether you have taken any other loan or you have had a bad credit history and things like your savings history and your current investments before making a decision as to how much they will lend to you.

Finally, they would place you into a certain category of customers which they believe will be able to contribute a certain percentage of their monthly earnings towards their loan repayment.

In many cases, an individual’s income level is not sufficient for him/her to be eligible for a high loan amount. In such instances, a viable option is to club the income of another person such as a spouse or a relative in order to boost eligibility.

• If your spouse is earning, put him/her as a co-applicant. The additional income shall be included to enhance your loan amount.
• Even your fiancé’s/fiancée’s income can be considered for sanctioning the loan on your combined income. The disbursement of the loan, however, will be done only after you submit proof of your marriage.
• You can also club incomes of parents or children. Clubbing with other relatives is discouraged as banks don’t want to take risks on relationships lasting over a long term.
• Providing additional security like bonds, fixed deposits and LIC policies may also help enhance eligibility.
• While there is no need for a guarantor, it could be that having one might enhance your credibility with the bank.