Aware Yourself About the Factors Which Determine your Home Loan Eligibility

There is something about the word home. It tugs at your heartstrings. Irrespective of where or who you are, you always yearn for home, and owning one is one of the signs that you have established yourself. It offers a sense of stability and anchors you to a place.

At the same time, real estate costs are rising steadily. Buying or building a home without a loan has become almost impossible. Thankfully, various lenders such as Grihashakti offer housing loans at a reasonable interest rate and make it simpler for you to become a homeowner. Before you apply for a housing loan, it is important to be aware of various home loan eligibility criteria.  

Lenders use various factors to determine if you qualify for a home loan. The goal is to gauge your ability to repay the loan. Lenders want some level of assurance that you will repay the loan. While the home loan eligibility criteria change from lender to lender, here are some of the most common ones.  


Your age is the most crucial factor in determining your home loan eligibility. It would be best if you were old enough to be earning. This makes the minimum age for getting a housing loan 21 years.

At the same time, lenders need to be sure that you can repay the loan before you retire. Many might put an upper age limit. However, the upper limit will vary depending on the loan amount you are requesting, your current salary and your loan tenure.   

Employment Status

You need to have a steady income to be able to repay the loan. Therefore, most lenders prefer salaried individuals with experience of at least two years. However, many lenders such as Grihashakti also offer loans to self-employed individuals.   

Credit Score

Your credit score indicates your past credit history. It tells the lender how you have handled your past debts. If you have a high credit score, it indicates that you have repaid your past debts on time. It also demonstrates that you have displayed the ability to handle debts in the past.

A low credit score indicates that you either delayed payments, missed them or defaulted on loans in the past. Individuals with a low credit score often find it hard to get home loans. Since the principal amount in a home loan is quite high, it is considered too risky to award it to someone with a history of handling their debts poorly.

Sometimes, even if you manage to get a loan despite a lower credit score, the interest rates charged on it will be much higher than usual. This will make repaying the loan a lot more expensive.

If you have a low credit score, you should consider taking some time to improve it before applying for a housing loan. 

Monthly Income

Most lenders consider a certain minimum monthly income as the cut off for home loan eligibility. However, this will also depend on the loan amount requested.

Ideally, you should have enough money to get through your day to day needs after paying the housing loan EMI. So, if you want a high loan amount, then your minimum salary requirement will also be higher. You can use a home loan eligibility calculator to estimate the maximum loan amount you can get based on your income, existing EMIs and value of the property. If you need a higher amount, consider adding a family member with stable income and good credit score as a co-applicant  

Other Debts

Do you have any other debts such as car loans, personal loans or educational loans? If you do, then these will have an impact on your home loan eligibility

If you are already under a huge debt that accounts for a large portion of your income, then you may not be able to afford the repayments on the home loan. It is better to pay off your existing loans before applying for a home loan in such cases. 

Down Payment

While housing loans do cover the major portion of the cost of your home, they cannot cover the complete cost. You will have to pay for the rest from your own pocket. This amount is called the down payment.

Lenders such as Grihashakti will cover up to a maximum of 90% of the cost of the house. You only need to pay for the remaining 10% as the down payment. This figure will vary depending on your eligibility as well as other criteria such as your gender, income, professional qualifications, nature of employment, location, nature & value of the property, etc. , and you need to check this before applying for a housing loan.   

In Conclusion

Getting a home loan is a major step towards accomplishing your dream of owning a home. Grihashakti understands the emotional value that a home holds for you. Their eligibility criteria are reasonable. They also encourage self-employed individuals and entrepreneurs to get a housing loan as long as they satisfy all the other home loan eligibility criteria.   

Also Read: Avail Your Dream House with Pradhan Mantri Awas Yojana