In India, owning a property is considered a great asset and a lifelong objective for most individuals. Home Loan for salaried professionals, home loans are one significant financial benefit that supports their dreamed objectives. Owing to a consistent stream of income, salaried employees usually have a simpler time obtaining a home loan in contrast to freelancers and self-employed individuals. The only caveat is that they need to understand and appreciate the dynamics that accompany home loans including eligibility requirements, documentation, interest charges, and repayment plans.
Along with obtaining a PAN, Today Finserv helps salaried professionals by walking them through the entire process of a home loan to ensure they obtain phenomenal deals with minimal stress.
Benefits of Taking a Loan Against Property
Buying a house as is, requires a great deal of capital investment. With the help of home loans, salaried individuals can now do the following:
- Purchase a house without drowning in depleting savings
- Spread the repayment over long tenures that stretch to 30 years
- Build
- Benefit from tax deductions based on principal and interest
- Build a credit history through home loans
Primary Requirements for Home Loans for Permanent Employees
Consistent Income
A borrower’s income is considered by lenders to determine the stability of the borrower’s income (preferably from a good bank or organization). Most banks prefer applicants with at least 2 years of continuous employment and at least 6 months to a year at the current employer.
Age Limit
Most lenders are willing to accept applicants who are between 21 and 58 years of age. The age 60 to 65 is considered the upper limit for repayment.
Income Requirement
While most banks require a person to be above the age of 21, they also prescribe a minimum limit of ₹15000 in monthly income, depending on the lender as well as the city of residence.
Credit rating
The creditworthiness of a person can also be judged by having over 750 being considered a healthy credit score. Such borrower’s with a great credit history are able to not only get higher loan amounts but also lower interest fees.
Debt-to-Income Ratio (DTI)
Lenders look at your existing debts, like car loans and credit card debts, in comparison to your monthly income. In general, your total EMI should not surpass 40-50 percent of your monthly income.
How is Home Loan Eligibility Calculated for Salaried Individuals?
Home loan eligibility is the maximum loan amount you are entitled to and is determined by your financial position. Here is a streamlined calculation for a better understanding,
- Income per month: ₹80,000
- Existing EMIs: ₹10,000
- Eligible EMI: 50% of income = ₹40,000
- Interest Rate: 8.5% per annum
- Loan term: 20 years
- Based off of these values, with an approximate eligible loan amount set at ₹50 lakh.
Documents Prepared for Eligibility of Home Loans for Wage Employed Individuals
Hectic work schedules can make reaching milestones like owning a home extremely challenging. The following documents can optimize the loan procedure:
- Proof of Identity: Voter ID, PAN card, Aadhaar card, Passport.
- Proof of Address: Utility bills, Aadhaar, Rent agreements, Passport.
- Proof of Income: Pay slips from the employer (last 3 to 6 months), Form 16, IT returns for the previous 2 years.
- Statement of Accounts: Last 6 months to a year during which salary was credited.
- Proof of Employment: Employment certificate or offer letter/appointment letter.
- Documents Related to the Property: Builder NOC, title deed, agreement to sell if applicable.
Types of Home Loans that can be Accessed by Wage Employed Individual
Fixed Rate Home Loan
The whole term loan is paid back at a set interest rate, then there is stable payment through em set repayments.
Floating Rate Home Loan
Loans paid with flexible interest rates. Payments can also increase or decrease in amount through time depending on the lender’s predetermined baseline rates such as RBI repo rate).
Hybrid Home Loan
A mixture of the previous two loan types that begin with a fixed method rate for a limited few years then transforms into a floating one.
Perks of Having Loans Extended to Wage Employed Individual
Less Strenuous Eligibility: A steady salary, guarantee of a job facilitate acceptance.
Lower Interest Rate: Wage earners seem como to receive more favorable rates than other groups.
Tax Benefits: As per the provisions of Section 80C, the capital payment can be claimed as deduction up to ₹1.5 lakh and interest payments are allowed up to ₹2 lakh under Section 24(b)
Flexible Tenure: Long repayment periods reduce the EMI burden.
Higher Loan Amount: Usually, higher and predictable income means increased loan eligibility.
As a salaried individual, what can you do to enhance your home loan eligibility?
Maintain a Top Credit Score
All EMIs and bills should be paid on time. Ensure that there are no defaults on credit cards or any other loans.
Reduce Current Liabilities
Pay a personal loan off or reduce the credit card spend debt in order to improve your Debt-to-Income ratio.
Opt for Longer Terms
Having a longer repayment period increases the loan eligibility by decreasing the monthly EMI.
Include a Co-Applicant
Including a spouse or any family member who has a job helps in increasing the overall eligibility.
Use Salary Account with the Lending Bank
There are better terms offered by some banks when the salary account is with them.
Issues that Salary Workers Face When Seeking to Obtain A Home Loan
Job Stability Issues: There is a desire to see a consistent job history; if a candidate keeps changing jobs, that makes one’s chance slim.
Excessive Debt: Previous loans or credit card dues can limit the credit access.
Inadequate Paperwork: Missing salary slips or inconsistent IT returns may create a delay in approval.
Underreporting Income: Some full time employees have variable bonuses or incentives which aid in further documenting to increase eligibility.
The Contribution of Today Finserv Consulting India Toward Your Home Loan
For salaried employees seeking for home loans, Today Finserv Consulting India assists at every step:
- Eligibility Evaluation: Examine your salary alongside current debts and credit score to provide a range of loan eligibility.
- Loan Product Comparison: Have access to many lenders and select their most favorable rates and terms.
- Document Assistance: Organizing and verifying documents to aid in easier processing.
- Application Assistance: Fill applications, mediating with lenders on clients’ behalf.
- Post Sale Support: Continual assistance throughout the repayment period and answering any queries.
