Accessibility of Housing Loans for Government and Private Employees

Food, clothing, and a place to live are every human being’s basic necessities. The right to shelter is a constitutional right in India. And home is an important aspect of an individual’s life who has dreamed of having his or her own living place since childhood. To finish a once-in-a-lifetime investment, a loan is required, and this is where housing loans come into play. So, in our country, banks and financial institutions provide loans to persons who want to apply for a loan to build, purchase, or extend their own home. Housing Finance Companies provide housing loans to both government and private employees for a variety of purposes, including purchasing or building a home from a developer – constructed, unbuilt, or under construction, or from a second owner, as well as improving and renovating an existing structure. With so many private sector banks and private as well as public sector housing financing firms lending their shoulders out, customers are finding it increasingly difficult to get the best bargain.

Home loan eligibility

Housing loan eligibility is determined by the borrower’s ability to repay the loan. The maximum loan amount that can be approved varies by bank and other housing financing businesses, but in general, the maximum housing loan amount permitted is 80 to 85 percent of the home’s cost. The following elements determine whether a home loan is eligible for a certain repayment arrangement. The eligibility criteria for HFCs may vary depending on the rules.

Age

1. 21 Years (Minimum)
2. 58 Years (salaried) (Maximum)
3. 60 (Public limited / Government Employees)
4. 65 (self-employed)

Qualification

1. Graduation

Income

1. Stable source of income and saving history

Dependants

1. Number of dependants
2. Assets
3. Liabilities
   

Other Income sources

1. Spouse’s income. 
   

How to meet the eligibility criteria

An applicant if not able to meet the eligibility criteria set by HFC’s can follow a few steps which can enhance their worthiness, some of which are mentioned below:

• Increasing the house loan tenure– Choosing a longer term is one of the most fundamental ways to improve the applicant’s home loan eligibility. This is because the EMI that an individual must pay decreases as the loan term lengthens, while the interest rate and principal amount stay constant. Because the individual is now paying a cheaper EMI, his ‘capacity to pay,’ and thus his loan eligibility, has increased automatically.
• Repaying other outstanding loans– Individuals having outstanding loans, such as vehicle loans or personal loans, may have a negative impact on their home loan eligibility. Existing debts with more than 12 overdue installments, according to industry guidelines, are taken into account when determining a home loan borrower’s eligibility. Individuals in this situation have the option of prepaying their previous loans in part or in full. This ensures that their eligibility for a home loan will not be harmed.
• Clubbing of incomes– Home loan eligibility can also be improved by combining the incomes of the applicant’s spouse and children who live with him or her, as well as having a regular income and even having working parents living with him or her. In such instances, the individual’s eligibility will be based on the combined income of both applicants, boosting the individual’s eligibility to the extent of the co-applicants income.

Nowadays, A person can easily apply for a housing loan online by going on the website of a Housing finance company through which the applicant is planning to borrow the loan and by simply clicking on the ‘apply for home loan’ option. The loan gets approved within a time period of 72 hours if all the documents are correct. Therefore, the process of applying for housing loans has become easier. There are various housing finance companies that provide a home loan at low rates and provide a large repayment period. Therefore, an employee whether government or salaried has easy accessibility to home loans.