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Home Loan Eligibility - Compare Top 18 Home Loan Lenders Eligibility

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Home Loan Eligibility Criteria for Salaried Employees

Salaried applicants need to satisfy the following home loan eligibility criteria.

Home Loan Eligibility Criteria

Salaried Employees

Eligible Age (Min-Max)

The applicant’s age should be minimum 24 years and maximum 60 years at the time of applying for a home loan if the applicant is a salaried employee.

Eligible Income

Salaried applicants should have a minimum monthly income of ₹25,000 per month in a metro city, and a minimum monthly income of ₹20,000 in other cities.

Minimum Loan Amount

The salaried applicants can avail a personal loan starting from ₹100,000, based on their eligibility.

Maximum Loan Amount

The salaried applicants can avail a personal loan up to ₹35 Crores, based on their eligibility.

Eligible City

180 Cities across India.

Co-applicant

Not mandatory, but only immediate family members can apply as a co-applicant.

Employment

The salaried employees should have a minimum of 2 years of total work-experience, and at least 6 months in the current company.

CIBIL

Required (750-900)

Home Loan Eligibility Criteria for Self Employed Professionals

Self-employed applicants need to satisfy the following home loan eligibility criteria.

Home Loan Eligibility Criteria

Self-Employed Professionals

Eligible Age (Min-Max)

The applicant’s age should be minimum 24 years and maximum 65 years at the time of applying for a home loan if the applicant is a self-employed professional.

Eligible Income

Self-employed applicants should have a minimum monthly income of ₹36,000 per month in a metro city, and a minimum monthly income of ₹30,000 in other cities.

Minimum Loan Amount

The self-employed applicants can avail a home loan starting from ₹100,000, based on their eligibility.

Maximum Loan Amount

The self-employed applicants can avail a home loan up to ₹35 Crores, based on their eligibility.

Eligible City

180 Cities across India.

Co-applicant

Not mandatory, but only immediate family members can apply as a co-applicant.

Employment

The self-employed applicants should have a minimum of 5 years of turnover, before they can apply for a home loan.

CIBIL

Required (750-900)

Factors that Decide an Applicant’s Eligibility for Home Loans

Every bank that offers loan will look into many criteria prior to sanctioning it. Among the long list of factors, few important ones are:

  • Employment Stability: It’s a crucial aspect for home loan consideration. Unless the applicant is salaried and employed for at least 2 years in the current profession or if the applicant is self-employed with minimum 5 years of total earnings loan will not be processed.
  • Age Criteria: The younger the applicant is there is more probability of getting loan. Most banks offer home loan for salaried employees only if they are between the age group of 20 to 60 years. However for self-employed this will change to 24 to 65 years.
  • Credit Rating: Apart from the applicant’s company’s performance, individual credit rating has a lot of importance. Good credit rating will increases the chance of getting the loan with more flexibility on loan amount, EMI, tenure and interest rates. Default payment records, fraudulent tracks, and outstanding loan, will reflect negatively on the applicant, this could lead to bank’s cancelling the loan request or will charge high rate of interest.
  • Employer: If the applicant is working with an employer who has high reputation and impressive turnover, the credibility of the applicant will respectively increase. Being a part of reputed and high turnover companies is an asset for the applicant especially when it comes to applying for home loan.
  • Financial Situation: For this factor, not just present status is considered, the past records of financial stability holds lot of value in deciding the eligibility for home loan. It is a key to success in all fields if you have good financial records, this can decide the interest rate percentage, loan amount and tenure when applying for loan.

Banks’ Methods of Calculating Home Loan Eligibility

There is no doubt, at the beginning every bank says it can offer 30 times of your net income, this makes the applicant exciting. But when loan is being processed, things change. The eligible loan amount will fall; too many other criteria will have a call on the loan amount and interest rate decision. It is advisable to be aware of how banks calculate home loan eligibility. Nothing is rocket science, it’s all merely Maths calculation and here it goes. Net income is the total of Basic salary, HRA (House rent allowance), Medical allowance, LTA (Leave travel allowance), Performance bonus, Special allowance, Conveyance allowance, PF, Food coupons, and any other allowance. But only few of these are considered when it comes to home loan net income calculation. This is the first and basic reason things change while loan is getting processed.

Banks exclude LTA and medical allowance while calculating net income. Thus the calculation is Net income minus (LTA+ medical allowances amount) = New net pay. The other expenses to be considered while purchasing a house through loan are the sources of fund for stamp duty and registration charge. It is essential to be mindful that this charge is calculated on the super built up area and not-built up area.

To put this into few simple steps:

Step 1: Bank will look into your salary slips and banks statements to calculate the income level
Step 2: It then calculates the amount that is saved, bank usually assumes 30% of your income as savings, say your income is ₹50,000, and then saving is ₹15,000.
Step 3: If there are existing loans EMIs it will be reduced from the income
Step 4: Banks do a backward calculation to understand how much loan amount can be offered according to the saving amount determined

Comparison of Home Loan Eligibility Criteria across different Banks/NBFCs

The top 3 banks that offer home loan in India are SBI, ICICI and Axis. Loan eligibility criteria for each of these providers differ according to various factors. Some of these criteria are listed below:

SBI Home Loan Eligibility Criteria

SBI offers home loan only post thorough scrutiny of the applicant’s request. It has fast approval processes with minimal and easy documentation. The list for the same is here:

Eligibility Criteria:

Criteria Salaried Self employed
Age 18 years to 70 years 21 years to 70 years
Income ₹120,000 p.a. ₹200,000 p.a.
Loan Amount Offered ₹500,000 - ₹10,000,000 ₹500,000 - ₹20,000,000
Tenure 5 years - 30 years 5 years - 30 years
Current Experience 2 years 3 years
Documentation 1) Identity & residence proof 1) Identity & residence proof
  2) Application form with photograph 2) Application form with photograph
  3) Form 16 3) Education qualifications certificate & proof of business existence
  4) Last 3 months salary slip  4) Business profile
  5) Processing fee cheque 5) Last 3 years profit/loss & balance sheet
  6)  Last 6 months bank salaried credit statements 6) Processing fee cheque
    7) Last 6 months bank statements

ICICI Home Loan Eligibility

It is possible to get home loan with just 15-20 days from this bank if you have all necessary documentation and if you meet all criteria. This bank offers competitive pricing and also maintains transparent process.

Eligibility Criteria:

  • Aged between 21 - 65 years
  • Minimum 2 years of total work experience with regular source of income
  • Co-applicant minimum age limit is 18 years

Documents Required:

Documents Salaried Self Employed Self-Employed Non Professional

Application form with photograph duly signed

Yes

Yes

Yes

Identity, residence and age proof

Yes

Yes

Yes

Last 6 months bank statements

Yes

Yes

Yes

Last 3 months Salary-slips

Yes

Yes

Yes

Processing fee cheque

Yes

Yes

Yes

Form 16 / Income Tax Returns

Yes

Yes

Yes

Proof of business existence

   

Yes

Business profile

   

Yes

Education qualification certificate and proof of business existence

 

Yes

Yes

Last 3 years Income Tax Returns with computation of Income

 

Yes

Yes

Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account

 

Yes

Yes

Axis Bank Home Loan Eligibility

If you are looking for a bank that offers fast service with less interest rate, this is the best option. It is very transparent and flexible in its eligibility criteria.

Eligibility Criteria:

Employment Type Eligibility Criteria
Salaried Individuals Government employees or individuals in reputed companies.
Minimum Age: 24 years
Maximum Age: 60 years at the time of loan maturity
Professionals Professionals - Doctors, Engineers, Dentists, Architects, Chartered Accountants, Cost Accountants, Company Secretary, Management Consultants only
Minimum Age: 24 years
Maximum Age: 65 years at the time of loan maturity
Self Employed Individuals All tax filing individuals
Minimum Age: 24 years
Maximum Age: 65 years at the time of loan maturity

Documents Required:

Purpose Salaried Self Employed
Proof of Identity and Address Passport or Voter's ID card or Driving License or Job Card issued by NREGA or Aadhaar Card or PAN card (PAN Card only as identity proof) or any other document as acceptable to the Bank  
Proof of income Latest 3 Months salary slip showing all deductions and Form 16 IT returns for the last 2 years and computation of income for the last 2 years certified by a CA
Bank statement or Pass Book where salary or income is credited Last 6 months Last 6 months
Guarantor form Optional Optional

Bajaj Finserv Home Loan Eligibility Criteria

If you are looking for the home loan which has flexible rules when it comes to the repayment of the loan than Bajaj Finserv is the right choice for you. Bajaj Finserv offers the home loan with the advantage of part payment & fore closure. Following is the eligibility criteria for applying for the home loan through Bajaj Finserv:

Eligibility Criteria:

There are two important factors when it comes to the eligibility for Bajaj Finserv home loans. First the applicant should be in the position to repay the loan. Secondly, the credit worthiness of the applicant which can be checked through the employer of the salaried applicant & through the business stability in case of self-employed & businessmen. Following is the eligibility criteria in terms of income for a salaried applicant:

City of Residence Minimum Income (Monthly)

Thane, Delhi /NCR and Mumbai

₹60000

Chennai and Bangalore

₹45000

Pune, Ahmedabad, Hyderabad and Kolkata

₹45000

Coimbatore, Surat, Aurangabad, Vadodara, Jaipur & Nashik

₹35000

Documents Required:

  • Valid identity proof (passport/ voter’s ID/ driving license/ PAN card/ Aadhar card).
  • Valid address proof (latest utility bill/ ration card/passport).
  • Valid age proof (PAN card/Passport/ Driving License/ Voter id card/ Birth certificate/ Employee ID card /School/ college leaving certificate).
  • Valid proof of business in case of business holder applicants (PAN card/sales tax/ excise/ VAT/ service tax registration/Copy of partnership deed/ Trade license/ certificate of practice/ registration certificate issued by RBI, SEBI).

Citibank Home Loan Eligibility Criteria

Citi bank offers the home loan at very competitive interest rate. They have 24*7 customer support for the assistance of home loan. Online application option is also available.

Eligibility Criteria:

  • The age of applicant should be of at least 23 years. The maximum limit of the age is 65 years.
  • The salaried applicant should be working in a reputed private company or a government company. Minimum work experience for the salaried applicant is 2 years.
  • Last 2 years Income tax returns should be filed by the applicant.

Documents Required:

  • Proof of identity (passport/ voter’s ID/ driving license/ PAN card/ Aadhar card).
  • Proof of address (latest utility bill/ ration card/passport).
  • Proof of income (Salary slip of last 6 months, 6 months bank statement, form 16 of current year).

HDFC Bank Home Loan Eligibility Criteria

HDFC bank is a global bank with the headquarters in Mumbai. The bank has been ranked in the top 100 Most Valuable Global Brands. HDFC is trusted name amongst the customers. The bank offers variety of home loans like new home loans, resale home loans & loans for constructing the home. HDFC offers the home loan with no hidden charges.

Eligibility Criteria:

  • The minimum age of the applicant should be at least 24 years. The maximum age of the applicant can be 65 years in case of self- employed. The maximum age limit for salaried is 60 years.
  • A salaried applicant should have at least two years of work experience. A self-employed applicant should have 4 years of work experience with good turnover.
  • CIBIL score of the applicant should be above 750.

Documents Required:

Criteria Salaried Employees Self-employed Professionals

Identity Proof

Passport/ Voter’s ID/ Driving License/ PAN Card/ Aadhar Card

Passport/ Voter’s ID/ Driving License/ PAN Card/ Aadhar Card

Resident Proof

Latest Utility Bill/ Ration Card/Passport

Latest Utility Bill/ Ration Card/Passport

Income Proof

  • Salary slips of the latest three months
  • Form number 16 to validate the income
  • Income Tax Returns
  • Bank statement of the latest six months
  • Income tax returns for the last three years
  • Balance sheet of the last three years to gauge profit and loss, validated by the CA/CS
  • Current account statement of the business firm of 6 months
  • Savings account statements of all the applicants of 6 months
  • Form number 26as for income tax filing

IndusInd Bank Home Loan Eligibility Criteria

The bank is providing affordable home loan & the customer service is commendable. The repayment tenure of Indusland bank is quite wide compare to other banks & financial institutes.

Eligibility Criteria:

  • The maximum loan amount offered would not exceed 80% market value of the property
  • The applicant should be either a salaried person or a self-employed with the regular income earnings
  • A salaried applicant must have at least two years of work experience.
  • The tenure of re payment of the loan depends upon the age of applicant
  • Maximum age limit is 70 years for self-employed & 60 years for salaried person.

Documents Required:

Document Type Salaried Employees Self-employed Professionals

Application Form

Filled application form with 2 passport size photographs.

Filled application form with 2 passport size photographs.

Identity Proof

Passport/ Voter’s ID/ Driving License/ PAN Card/ Aadhar Card

Passport/ Voter’s ID/ Driving License/ PAN Card/ Aadhar Card

Resident Proof

Latest Utility Bill/ Ration Card/Passport

Latest Utility Bill/ Ration Card/Passport

Education Proof

NA

Education certificates

Income Proof

  • Salary slips of the latest three months
  • Form number 16 to validate the income
  • Income tax returns
  • Bank statement of the latest six months
  • Income tax returns for the last three years
  • Balance sheet of the last three years to gauge profit and loss, validated by the CA/CS
  • Current account statement of the business firm of 6 months
  • Savings account statements of all the applicants of 6 months
  • Form number 26as for income tax filing

Kotak Mahindra Bank Home Loan Eligibility Criteria

The process of home loan application is easy & hassle free when it comes to Kotak Mahindra bank. Approval of the loan is simple & loan amount can be disburse in 4-5 days. Online application option is also available.

Eligibility Criteria

Particulars Salaried Empldoyees Self-employed Professionals

Age

21 - 60 years

21 – 65 years

Income

₹480,000 per annum

₹480,000 per annum

Repayment tenure

5 - 25 years

5 - 25 years

Work experience

2 years

3 years

Documents Required:

Document Type

Salaried Employees

Self-employed Professionals

Application Form

Filled application form with 2 passport size photographs.

Filled application form with 2 passport size photographs.

Identity Proof

Passport/ Voter’s ID/ Driving License/ PAN Card/ Aadhar Card

Passport/ Voter’s ID/ Driving License/ PAN Card/ Aadhar Card

Resident Proof

Latest Utility Bill/ Ration Card/Passport

Latest Utility Bill/ Ration Card/Passport

Income Proof

  • Salary slips of the latest three months
  • Form number 16 to validate the income
  • Income tax returns
  • Bank statement of the latest six months
  • Income tax returns for the last three years
  • Balance sheet of the last three years to gauge profit and loss, validated by the CA/CS
  • Current account statement of the business firm of 6 months
  • Savings account statements of all the applicants of 6 months
  • Form number 26as for income tax filing

PNB Housing Finance Ltd Home Loan Eligibility

PNB has the housing finance section that caters to variety of needs when it comes to home loan. The name of the brand itself is a great proof of its expertise in housing finance. PNB has many different types of loan option available when it comes to home loan like home purchase loan, home construction loan, home extension loan, home improvement loan, home loans for NRIs etc.

Eligibility Criteria:

  • The applicant should be either a salaried person or a self-employed with the regular income earnings
  • A salaried applicant must have at least two years of work experience.
  • Maximum age limit is 70 years at the time of maturity of the loan.

Documents Required:

Document Type Indian Resident NRI

Application Form

Filled application form with 2 passport size photographs.

Filled application form with 2 passport size photographs.

Identity Proof

Passport/ Voter’s ID/ Driving License/ PAN Card/ Aadhar Card

Passport/ Voter’s ID/ Driving License/ PAN Card/ Aadhar Card

Resident Proof

Latest Utility Bill/ Ration Card/Passport

Latest Utility Bill/ Ration Card/Passport

Income Proof

  • Salary slips of the latest three months
  • Form number 16 to validate the income
  • Income tax returns
  • Bank statement of the latest six months
  • Proof of shop or firm establishment (for businessmen)
  • Office address Proof (for businessmen)
  • Passport Copy
  • Work Permit copy (if applicable)
  • Last three months’ salary slips
  • Appointment letter issued by current employer
  • Last two year’s income statement testified by the employer
  • Last 6 months bank statement for regular salary

Standard Chartered Bank Home Loan Criteria

Standard chartered is a global bank with the branches in 70 different countries across the globe. If you are looking forward for low finance home loan with less processing charges than this is one if definitely for you.

Eligibility Criteria:

  • The minimum age of the applicant should be at least 21 years. The maximum age of the applicant can be 60 years.
  • An applicant must have at least two years of work experience
  • Annual salary of the salaried applicant should be at least ₹480,000. Minimum yearly earnings in case of self-employed should be at least ₹600,000.

Documents Required:

Document Type Salaried Employees Self-employed Professionals

Application Form

Filled application form with 2 passport size photographs.

Filled application form with 2 passport size photographs.

Identity Proof

Passport/ Voter’s ID/ Driving License/ PAN Card/ Aadhar Card

Passport/ Voter’s ID/ Driving License/ PAN Card/ Aadhar Card

Resident Proof

Latest Utility Bill/ Ration Card/Passport

Latest Utility Bill/ Ration Card/Passport

Income Proof

  • Salary slips of the latest three months
  • Form number 16 to validate the income
  • Income tax returns
  • Bank statement of the latest six months
  • Income tax returns for the last three years
  • Current account statement of the business firm of 6 months
  • Form number 26as for income tax filing

Tata Capital Home Loan Eligibility Criteria

TATA capital is known to provide customize home loans to their customers depending upon the need of the customers. They have number of home loans including the home loan, home construction loan, home renovation loan etc. the range of repayment tenure is as wide as 30 years.

Eligibility Criteria:

  • The applicant must be a citizen of India.
  • The minimum age of the applicant should be at least 24 years. The maximum age of the applicant can be 65 years of age.

Documents Required:

Document Type Salaried Employees Self-employed Professionals

Application Form

Filled application form with 2 passport size photographs.

Filled application form with 2 passport size photographs.

Identity Proof

Passport/ Voter’s ID/ Driving License/ PAN Card/ Aadhar Card

Passport/ Voter’s ID/ Driving License/ PAN Card/ Aadhar Card

Resident Proof

Latest Utility Bill/ Ration Card/Passport

Latest Utility Bill/ Ration Card/Passport

Education Proof

NA

Education certificates

Income Proof

  • Salary slips of the latest three months
  • Form number 16 to validate the income
  • Income tax returns
  • Bank statement of the latest six months
  • Income tax returns for the last three years
  • Balance sheet of the last three years to gauge profit and loss, validated by the CA/CS
  • Form number 26as for income tax filing

Ways to Improve Housing Loan Eligibility

  • Identify credit score reductions reason, it could be because of credit card late payments or loan EMIs defaults, etc. Defaulting and late payment is the core factor for bad credit scores thus it is essential that every individual should maintain a good track record.
  • Never default payments in future. Make all payments on time and keep sufficient balance in your bank account for ECS transactions.
  • Continuous rejection of Credit cards and personal loans will lead to drop in the CIBIL scoring, at these situations give it a break. This will help in gradually increasing the credit worthiness of the individual.

Apart from these, having good relationship with the bank manager is an add-on. Every branch manager has discretionary rights to alter loan requirements. Strive to maintain a good financial track record, to enjoy home loan benefits.

Can siblings take joint Home Loans in India?

Yes, siblings are allowed to take joint loan from any bank for home loan. And with the help of this both can avail tax benefits under Income Tax Act section 80C. However, here are some of the points to be kept in mind while taking a joint loan with a sibling.

  1. Joint home loan means both will be the owner of the property thus both has rights on the property however if the sibling is just a borrowers then he/she has the right of liability. A sibling can be a co-owner of the property only if you share the liability of the property as co-borrowers, else banks will not consider you as a co-owner. Loan liability and co-ownership percentage can be altered as per each applicant’s requirements.
  2. In case if siblings are taking a home loan, usually banks will approve the loan amount upto 10 years of tenure. This is the maximum tenure that is offered if siblings are the applicants.
  3. Under section 24 (interest repayment) and 80C (principal repayment) both the applicants have the right to claim tax benefits on their home loan.
  4. If you have an option to apply for a joint loan, this option is the best if you are in need of huge amount. As the income and CIBIL scoring of both together will be considered by the bank, thus huge amount will be approved. This way you can be the owner of huge property.
  5. Pre-EMI option is available even if it is a joint loan. This means both the applicants/ borrowers just have to pay the interest on the loan amount as a pre-EMI until the possession of the property. This works in cases when the property is still under construction, the applicant have the benefit of avoiding the actual benefit until the construction is completed and possession of the property is taken.
  6. Do a complete research on the joint home loan for siblings as not every bank will allow this. In cases of disputes bank will have to suffer any delayed payments or failure to pay.

Can a Home Loan be transferred completely to a co-borrower?

The number of people, who are availing the advantages of the home loan, is increasing day by day rapidly. Many home loan borrowers are now preferring to go for a joint home loan options due to various benefits such as the benefit to avail higher loan amount, income tax benefits and many more to name a few. A co borrower is the person that shares the ownership of the home loan in an asset with you or group or individual. The factors such as credit rating and CIBIL scores are being taken in to the consideration as far as home loan joint application is concerned.

However, there are certain eligibility rules and conditions that have to be satisfied that can be mentioned as follows.

  • The joint home loan can be availed maximum by six people and minimum by two people.
  • The co-borrower may or may not be the co-owner of the said property; however banks or lenders shall prefer that a co-borrower should be the co-owner of the property.
  • The joint home loan repayment is the collective responsibility of the main borrower as well as co-borrower(s). Each of them is equally liable as far as repayment is concerned.
  • If the home loan borrowers are married, then the same seems to be a perfect arrangement to the home loan lenders or providers. The couple is having the liberty to decide that which one of them wants to be the co-borrower and which one of them wants to be the co-owner.
  • If the applicants of the home loan are the son and father duo, or unmarried daughter and father or mother and unmarried daughter or mother and son, then bank or lenders shall prefer that son or daughter should be the primary owner of the property.
  • In the case of two brothers applying for the same, the lender or bank insist that they should be the co-owner of the property.
  • Unmarried couple living together or friends claiming for the joint home loan are usually not allowed for the same.

Home loan co-borrower and co-applicant is one and the same thing if we take a larger picture in the consideration because the person is sharing equal responsibility as far as the repayment is concerned. Hence, in special cases, the lender may consider to transfer the loan completely to a co-borrower. However, there can be some disadvantage in being a co-borrower in certain cases that can be discussed as follows.

  1. Conflict between Wife and Husband: - If husband and wife, any one of them is a co-borrower and both of them are paying the EMIs for the home loan, and because of the conflict, any one of them stops paying the EMI then the other borrower faces the problem.
  2. In case of death of Prime borrower or co-borrower:- In case if the prime borrower or co-borrower meets death, then the rest of the amount that has to be paid by the borrower, who is alive. It becomes the person’s responsibility to repay the amount and that can create a burden for the person.
  3. WILL beneficiary can be different: - if husband and wife are the borrowers of a home loan and the husband decides to inherit property to the parents or siblings and not to wife or let’s say he decides to equally distribute the property between parents and wife, the if a wife is not co-owner but just a co-applicant then it can create a huge trouble for her.
  4. Default Case: - in the case of default, the home loan applicant assets can be at risk be it co-borrower of borrower.

To avoid such cases, It is very essential that the home loan applicants are having separate legal liability agreement that has all the terms and conditions mentioned. The agreement should have stated and classified the liability of each and every party that is involved. The parties involved should execute the same on the legal stamp paper and should notarize it. Banks promote the co-borrowing as the same reduces the risk in terms of repayment of the loan. The bank can also insist in terms of getting the insurance as far as protection of repayment is concerned. It is essential for the borrower and co-borrower that they safeguard the loved ones by properly following terms & conditions as the future is quite uncertain and one should be ready to encounter any situation.

Ways to Improve Housing Loan Eligibility

  • Identify credit score reductions reason, it could be because of credit card late payments or loan EMIs defaults, etc. Defaulting and late payment is the core factor for bad credit scores thus it is essential that every individual should maintain a good track record.
  • Never default payments in future. Make all payments on time and keep sufficient balance in your bank account for ECS transactions.
  • Continuous rejection of Credit cards and personal loans will lead to drop in the CIBIL scoring, at these situations give it a break. This will help in gradually increasing the credit worthiness of the individual.

Apart from these, having good relationship with the bank manager is an add-on. Every branch manager has discretionary rights to alter loan requirements. Strive to maintain a good financial track record, to enjoy home loan benefits.

Can siblings take joint Home Loans in India?

Yes, siblings are allowed to take joint loan from any bank for home loan. And with the help of this both can avail tax benefits under Income Tax Act section 80C. However, here are some of the points to be kept in mind while taking a joint loan with a sibling.

  1. Joint home loan means both will be the owner of the property thus both has rights on the property however if the sibling is just a borrowers then he/she has the right of liability. A sibling can be a co-owner of the property only if you share the liability of the property as co-borrowers, else banks will not consider you as a co-owner. Loan liability and co-ownership percentage can be altered as per each applicant’s requirements.
  2. In case if siblings are taking a home loan, usually banks will approve the loan amount upto 10 years of tenure. This is the maximum tenure that is offered if siblings are the applicants.
  3. Under section 24 (interest repayment) and 80C (principal repayment) both the applicants have the right to claim tax benefits on their home loan.
  4. If you have an option to apply for a joint loan, this option is the best if you are in need of huge amount. As the income and CIBIL scoring of both together will be considered by the bank, thus huge amount will be approved. This way you can be the owner of huge property.
  5. Pre-EMI option is available even if it is a joint loan. This means both the applicants/ borrowers just have to pay the interest on the loan amount as a pre-EMI until the possession of the property. This works in cases when the property is still under construction, the applicant have the benefit of avoiding the actual benefit until the construction is completed and possession of the property is taken.
  6. Do a complete research on the joint home loan for siblings as not every bank will allow this. In cases of disputes bank will have to suffer any delayed payments or failure to pay.

Can a Home Loan be transferred completely to a co-borrower?

The number of people, who are availing the advantages of the home loan, is increasing day by day rapidly. Many home loan borrowers are now preferring to go for a joint home loan options due to various benefits such as the benefit to avail higher loan amount, income tax benefits and many more to name a few. A co borrower is the person that shares the ownership of the home loan in an asset with you or group or individual. The factors such as credit rating and CIBIL scores are being taken in to the consideration as far as home loan joint application is concerned.

However, there are certain eligibility rules and conditions that have to be satisfied that can be mentioned as follows.

  • The joint home loan can be availed maximum by six people and minimum by two people.
  • The co-borrower may or may not be the co-owner of the said property; however banks or lenders shall prefer that a co-borrower should be the co-owner of the property.
  • The joint home loan repayment is the collective responsibility of the main borrower as well as co-borrower(s). Each of them is equally liable as far as repayment is concerned.
  • If the home loan borrowers are married, then the same seems to be a perfect arrangement to the home loan lenders or providers. The couple is having the liberty to decide that which one of them wants to be the co-borrower and which one of them wants to be the co-owner.
  • If the applicants of the home loan are the son and father duo, or unmarried daughter and father or mother and unmarried daughter or mother and son, then bank or lenders shall prefer that son or daughter should be the primary owner of the property.
  • In the case of two brothers applying for the same, the lender or bank insist that they should be the co-owner of the property.
  • Unmarried couple living together or friends claiming for the joint home loan are usually not allowed for the same.

Home loan co-borrower and co-applicant is one and the same thing if we take a larger picture in the consideration because the person is sharing equal responsibility as far as the repayment is concerned. Hence, in special cases, the lender may consider to transfer the loan completely to a co-borrower. However, there can be some disadvantage in being a co-borrower in certain cases that can be discussed as follows.

  1. Conflict between Wife and Husband: - If husband and wife, any one of them is a co-borrower and both of them are paying the EMIs for the home loan, and because of the conflict, any one of them stops paying the EMI then the other borrower faces the problem.
  2. In case of death of Prime borrower or co-borrower:- In case if the prime borrower or co-borrower meets death, then the rest of the amount that has to be paid by the borrower, who is alive. It becomes the person’s responsibility to repay the amount and that can create a burden for the person.
  3. WILL beneficiary can be different: - if husband and wife are the borrowers of a home loan and the husband decides to inherit property to the parents or siblings and not to wife or let’s say he decides to equally distribute the property between parents and wife, the if a wife is not co-owner but just a co-applicant then it can create a huge trouble for her.
  4. Default Case: - in the case of default, the home loan applicant assets can be at risk be it co-borrower of borrower.

To avoid such cases, It is very essential that the home loan applicants are having separate legal liability agreement that has all the terms and conditions mentioned. The agreement should have stated and classified the liability of each and every party that is involved. The parties involved should execute the same on the legal stamp paper and should notarize it. Banks promote the co-borrowing as the same reduces the risk in terms of repayment of the loan. The bank can also insist in terms of getting the insurance as far as protection of repayment is concerned. It is essential for the borrower and co-borrower that they safeguard the loved ones by properly following terms & conditions as the future is quite uncertain and one should be ready to encounter any situation.

ReviewsView All

Prakhar Singh

5 / 5

HDFC required very less documents physical documents for my home loan in Delhi. The interest rate charged was 8.65% per annum and I had to pay ₹10,000 as processing fees. Overall a good experience.
Vipra Singh

5 / 5

The executive assigned for my home loan by HDFC was not good, he provided me wrong information about the product so, that I can purchase it and he can get his commission. Apart from the executive, everything went well.
Anirudh Chawla

5 / 5

DHFL charged me comparatively less rate for my home loan. Executives were good and polite they also provided me information about the processing and regarding government scheme too. Because of them, I was able to avail the PMAY government scheme which made my home loan cheaper.
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