- 5 Factors That Influence The Home Loan AmountDecember 28, 2017
Today’s scenario of home buying is witnessing more and more homebuyers using home loans to finance their dream of owning a home. But before deciding to apply for a home loan, one should check for his home loan eligibility and analyse the conditions for granting the desired loan amount.
Here are 5 factors that influence the loan amount granted.
The higher the income, the better the chances for getting a bigger loan amount. Also, salaried employees find it easier to avail loan because of their stable income when compared to others who are self-employed. Banks also require the salary slips of previous months while applying for a home loan to ensure that the income is stable.
Home loan repayment is a long-term affair and hence, the age of the applicant is relevant for the banks so as to ascertain how long the applicant will take to pay off the EMI. It is according to the age of the applicant that the amount granted and the tenure of home loan is decided.
Some professions like insurance agent, BPO sector and other small businesses are categorised by the financial institutions as risky to provide a home loan. But other high profile jobs like software engineer, banking and medical professionals have higher loan eligibility due to their stable income flow.
4. Credit history
The applicant’s record of previous loan repayments influences home loan eligibility as people with an unimpressive credit history will find it difficult to avail loans. Also, even if the loan is sanctioned, the amount will be small for these applicants.
5. Category of employer
Corporates are categorized under different sections by most of the banks. While an employee from a specific category is eligible for a higher loan amount, an employee from a company of another category may receive loans with lower interest rates.
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