Home Loan Eligibility Criteria

Banks and finance companies have pre-determined home loan eligibility criteria to verify and provide maximum ease to loan borrowers. Apart from the eligibility criteria, banks look at the applicant's credit history to establish creditworthiness and repayment patterns

• Applicant must be between 21 to 65 years
• Salaried or self employed
• Annual income
• Collateral security
• Assets, financial stability and occupational continuity
• Residence status (Indian or NRI)

Reasons of Home Loan Rejection

Some of the home loan rejection reasons are given below:

• Unpaid dues and other ongoing debts
• Applicant’s address present on the defaulter’s list
• Applicant's age does not come within the eligible age range
• Credit score below 600
• Multiple rejected loan applications
• Frequent job change
• Faulty repayment of ongoing debts
• Absence of required documents

How to Close Existing Home Loan?

A home loan can be closed either on the completion of the repayment tenure when you have successfully paid the entire loan amount or via foreclosure.

If your repayment tenure is completed, you just need to visit the lender and fill out the required form for loan closure. Once you are done, the lender will provide you with the loan closure certificate and your property documents that were kept as mortgages at the time of loan approval.

If you have decided to repay the loan amount before completion of loan tenure, i.e. loan foreclosure, you will have to pay associated foreclosure charges.

Once you pay the outstanding amount and the foreclosure, your debts will be cleared. The bank will process your foreclosure application and provide you with a loan closure certificate

Home Loan: Service Charges And Fees

Following fees and charges are associated with home loans throughout the loan tenure:

• Processing Fees

  It is a one-time charge that the borrower is liable to pay to the bank or finance provider. Processing fee is charged for recovering the expenses incurred to process the home loan. It is non-refundable and is paid in advance.

• Application Fees

  It is also termed as administrative fee or login fee. The administrative fee is non-refundable and is charged before applying for a home loan. It is charged prior to loan approval. It can range from Rs. 2,500 to Rs. 6,500. In case of loan approval, the applicant will have to pay the applicable processing fee which will be computed after deducting this amount.

• Prepayment or Foreclosure Charges

  Lenders also term it as Pre Closure Charge or home loan closure charges. Home loan prepayment charges are applicable when a borrower decides to pay the loan amount in one go prior to the end of their tenure. Many banks and financial institutions don’t charge foreclosure fees specifically for floating-rate loans. It can range from 2 to 6 percent of the remaining loan amount

Required Home Loan Documents

To avail of a home loan with utmost ease, you need to prepare the below depicted documents:

Documents for Identity Proof

• PAN and Aadhar Card
• Applicant's Passport
• Voter ID Card
• Driving Licence

Documents for Address Proof

• Utility bills (electricity or telephone bill)
• Salary slips of last 6 months and Form 16
• Identity proof that contain address, like Aadhaar Card
• Bank account statements
• Income proof and employment proof

Other Documents

• Passport-size photographs of the applicant
• For self-employed, business continuity proof will be required (5 years)