Are you applying for a home loan for the first time? Then read this article to learn about the eligibility criteria, required documents, and factors influencing the loan approval process.

A home loan is one of the highly common and required financial commitments people try to fulfil in the initial days of their careers. However, not all aspiring homeowners are always financially able to meet the necessary costs that come with buying a home. Here comes the importance of home loans. 

Home loans provide you with an immediate channel to fulfil your dream. For some, the process may be challenging and confusing. However, once you learn about home loan eligibility and the documentation, the process will become much more simplified. 

Read this article to learn about the eligibility criteria and documents required for home loans for both Indian residents and NRI. Additionally, we will share a few tips for easy, hassle-free and fast approval. Scroll down for more information. 

The application process for a home loan begins with meeting a few general criteria set by the bank or any other financial organisation. Lenders use this information to determine your financial ability to repay the fund. 

For instance, banks prefer a debt-to-income ratio below 40% to comprehend how well you can manage the monthly payments. Similarly, there is a basic salary, age and other factors. One thing to remember is home loans can be availed by both Indian residents and NRIs but with differing conditions. 

Do you feel it is complicated? Do not worry; down below, we will list the conditions you need to meet when applying for a home loan. 

If you are a resident of the country, the conditions for you are as follows,

• Proved resident of India

• You need to be an adult, i.e.18 years (21 in some cases) old, and the maximum age limit is 60 years for the general public and 70 for agriculturists. 

• The minimum income should be INR 10,000 per month for salaried applicants and INR 1,20,000 annually for business people or self-employed applicants. 

• There is a separate home loan section for NRIs with just a few differences in the specifications. The housing loan eligibility factors to fulfil in this case are, 

• The NRI must hold an Indian passport.

• Must be 18 years old

• INR 40,000 monthly for salaried individuals, INR 4,80,000 yearly income for business people or self-employed

• Other types of NRI candidates that can apply are 

• Indian students pursuing higher education

• Indian nationality professional Seafarers

• Persons who became citizens of India on 26 January 1950 (PIOs)

• Overseas Citizens Of India (OCIs)

• Meeting the eligibility criteria is just the first step. Next, check whether you have all the home loan documents required to complete the application process. You will need, 

• Aadhaar or Pan Card

• Income proof

• 12 months bank account/salary account statement

• RTC copy if you are applying as an agriculturist

• Scanned and soft copy of KYC documents

• Customer ID or debit card number (if you are an existing customer of the bank)

• Sale agreement or deed of the home or land purchase

The application process is different from the approval criteria. Just meeting the eligibility criteria and submitting all the documents required for housing loan correctly does not assure a loan approval. There are a few other factors to maintain to get access to your funds as fast as possible. They are as follows

The first and foremost thing the lender considers is your credit history. You need to have a high credit score from 750-800. The more increased score you have, the better your chances of getting your loan approved within a few hours. The best way to maintain a proper history is to pay your monthly debts within the due date. 

This ratio helps the lender to understand your ability to pay the monthly instalments. Hence, it is very important to keep the ratio percentage lower than 40%. A ratio higher than 50% will increase difficulties in getting loan approval. 

In this above section, it is mentioned that you need to procure the salary or bank account statement for the last two years. For some banks, it can be 3 years as well. Hence, make sure you are maintaining the minimum regular income. A disruption in the monthly income might delay your loan approval. 

The more legal sources of income you can prove, the more reliability you gain. The lenders build confidence in your financial ability to repay the funds within the given tenure. For instance, you can opt for your side business, tutoring, or any other part-time job. This will ensure quick approval.

The longer loan term you choose not only increases the interest amount but also creates a ground for uncertainties. The longer the loan term, the more lenders will be sceptical about approving the loan fund. Hence, for fast loan approval, try to opt for lesser tenure, but definitely at your convenience.

We hope you have a grasp of the eligibility criteria, required documents and ways to enjoy a quick loan approval. Another advice here is always to try to choose registered and reputed banks like Karnataka Bank for the best and most secure experience.