What are the Income Criteria for Salaried Employees, to get Approved for a Home Loan?
January 06, 2022
To get approved for a housing loan, one should meet the income eligibility set by the lender. What is this income eligibility? How much should you have to earn monthly as a salaried person, to get approved for a home loan? Read this post, to learn more.
In all likelihood, you would not lend a significant amount to someone if they don’t have a source of income. The same logic applies in the case of lenders as well.
Before giving you a loan, a lender would also ensure that you have a steady source of income, above the minimum threshold. Every bank and financial institution in the country has a home loan salary eligibility criteria, based on which it approves or rejects loan applications.
What is this income eligibility? How much should you be earning monthly as a salaried person, to get approved for a home loan? Take a look -
Why an Income Criteria for Home Loans?
By offering home loans to salaried employees with a monthly income only above a specific limit, the lender tries to minimize the risk of default. Your home loan EMI should be a certain reasonable percentage of your monthly take-home income, so that the financial burden remains low, and you repay the loan on time.
Other than income, the lender also considers your age, profession, employment history, employer, existing liabilities, and CIBIL score. Only if the applicant fulfils all the eligibility requirements, their loan application is approved.
What are the Income Criteria for Salaried Employees?
While the income criteria can also vary between lenders, most top home loan providers require salaried applicants to have a monthly income of Rs 25,000 or above. The higher the salary, the easier it is, for the borrower to get approved for a bigger loan amount, given that the applicant also meets the additional eligibility requirements of the lender.
If you have a working spouse, son, unmarried daughter, or sibling, you have the option to apply for a home loan jointly. In this way, the income of both applicants can be clubbed together for approval. Joint home loans are also very effective when you need a bigger loan amount. Moreover, it can also positively impact the home loan interest you’d be paying.
How Does the Lender Analyse Your Income?
While applying for a housing loan, borrowers are required to submit several varied documents, including ones related to their income. For salaried employees, the documents are -
Latest Salary Blips
Salaried Account Bank Statements of last the 3 months
The documents allow the lender to confirm whether or not your monthly income fulfils the income criteria. Your loan application can be rejected, if the monthly salary is below the minimum income requirement.
Getting Your Home Loan Application Approved
Before applying for a housing loan, it is essential to first check the Home Loan eligibility criteria laid down by the lenders, especially regarding monthly income. If you do not meet the requirements of one lender, it might be possible that another lender has a slightly more lenient eligibility requirement, and can approve your application.
You can check the official website of the lender to know more about their eligibility requirements. Choose a lender whose eligibility criteria you fulfil comfortably, to ensure that the approval process is quick and hassle-free.