Know everything about a housing loan and its purpose

Despite the economic downturn faced in 2020, India’s home loan sector has shown significant growth. The moderate interest rates and reduction in stamp duty charges were key reasons behind this. Even though the industry is booming rapidly, loan rejections due to discrepancies in the credit profile and other aspects are also pretty common.

In order to avoid all of that and make the process of availing housing loans smoother, applicants need to be aware of the eligibility criteria first.

Eligibility parameters for home loans

Here is a list of housing loan eligibility requirements individuals need to meet in order to avail its benefits:

• The borrower should have a steady income source and adequate monthly income to bear the EMIs conveniently. In this regard, one should always assess monthly instalments using a home loan EMI calculator and check if managing other liabilities will be possible along with this.

• The applicant should be aged between 23 and 62 years.

• A decent credit score (preferably 750 or above) and a clean repayment track record are required to be eligible for housing loans.

Apart from these parameters, applicants must be aware of the documents required for housing loans and keep them handy so that the disbursal process does not take long.

Besides researching how to apply for home loan, applicants should also go through all its purposes to utilise all the benefits. Note that housing loans can be availed to purchase a residential property or land, renovate an existing property, or use the funds for construction purposes. Financial institutions offer different kinds of home loans that serve all these objectives and keep the eligibility criteria almost the same.

As additional advantages, borrowers can claim tax deductions on their housing loans and invest those funds into some lucrative sphere as well.