When it comes to buying a home, there are loads of options you may consider to fund this purchase. Amongst the several choices, the home loan is among the most popular choices. Not only are there several lenders that provide the home loan in India, but they also provide it at distinct competitive prices. There are various financial services and business consultancy firms which could help you in getting more returns over your invested amount.
However, each lender will have different criteria for assessing a loan application. These standards determine your eligibility for a loan program. Here are a few variables that almost all lenders will consider:
Disposable income: Among the main factors that a lender will consider is the disposable income. It's derived by deducting your statutory deductions, regular expenses and present EMI's from your general gross income. In general, your home loan EMI should be within 40% of your monthly disposable income. If your individual income is low, you could always apply with a co-applicant to boost the overall gross income so as to find the loan amount you need.
Credit history: Your credit score determines your creditworthiness. Lenders consider your credit rating as the capacity to judge your creditworthiness. A low credit rating will indicate that you are a risky investment.
Additionally, it indicates that you might have a present debt value you will need to pay off before applying for a different debt, like the home loan. The credit score of 750 and above is regarded as a score. However, other creditors may have different scoring routines and a fixed yardstick for their own version of the acceptable excellent credit score.