On depending on Loan types every bank has various factors which they consider to grant any loan. Basically any loan is sanctioned as per income of the payer that how much he can repay i.e. repayment capacity. Sometimes apart from direct income there are other sources also on those basis loan capacity is calculated like spouse’s income, assets, liabilities, stability of income and so on. One always apply for that much amount’s loan that he can repay it.
Banks also suggest to its customers that before applying for a loan make sure you can easily repay that amount on time without any hassle. The higher your earning amount the higher you will get loan amount or higher is the eligibility for loan. As per banks assumption about 55-60% of your income should be available for repayment of loan. But it varies from bank to bank because in the case of EMI it is calculated on the basis of Individual’s Gross Income available for repayment of Home Loan.
Criteria for Bank Home Loan-
There are few criteria which being set by Different Banks as per their eligibility. However, all this is classified in different categories-
Monthly Income- For getting any loan it is required to show brief knowledge of one’s monthly income because maximum loan amount is calculated on the basis of monthly income. Basically your profit or savings is considered to disburse maximum loan amount whether you are salaried individual or a self employed person.
Banks check net income to disburse loan amount and Banks usually provides home loans up to 60 times of an individual’s net income. Like: If a person’s net income is 40,000/- per month then he will get 24 lakhs amount as Home Loan. But some other points also consider at the time of finalization of loan.
Other EMI- If you have taken any loan earlier and its EMI is still pending then banks consider this risk and financial burden to sanction new loan.
Available Income- After deduction of EMI which you are currently paying, the amount which is left in your account that is considered for sanctioning Home Loan. The Home Loan eligibility is always calculated after deduction of EMI’s that is deducting monthly.
Property Attributes- If you own a property or home then you can get up to 75% of loan amount on your property basis. For example: if your property is worth Rs. 40 lakh then you can get 30 lakhs loan amount as value of your property. Based on your income and property value banks consider loan amount and then disburse exact loan amount.
Banks has set certain norms for granting any Home loan. Such as minimum area requirements for a flat and that can be calculated using its carpet area or built up area. Banks also check the age of the property, the location of the property in which it belongs, the market reputation of the builders or constructing company who is building that property. All these factors are considers on the time of sanctioning of loan. Detailed analysis or inspection has to be done in case of property loan to check it should be free from any disputes. In case of any disputes going on that property the banks never consider that property for loan.
Credit History- It is also an important factor for Home loan consideration. Credit history is calculated on the basis of Credit report of an individual based on credit information presented by CIBIL through all one’s loan transactions. Based on your credit report Banks check whether any individual is eligible for loan or not. Credit History is recorded by outstanding credit card bills, unsecured loans which provide brief information about the credit transactions done by individual.
Age-Age has always been an important factor in determining the loan amount and its tenure. According to the Banks minimum age for taking any loan is 21 years but maximum age is differ from banks to banks. Usually it varies from 56-65 years age depending on the source of the income. The longer the tenure of loan and lower will be the EMI’s. However it will be costlier because one has to pay more interest because of its long tenure.
Co- applicant- In order to get Home loan easily one can add any co- applicant with him. It will increase the eligibility and banks will consider your co- applicant’s income sources and his property for loan. Banks permit only few relationships for home loan.
These all factors are considered by banks but in case for NBFC’s there are some more factors which are to be considered for Home Loan.
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