When it comes to home loan eligibility, lenders offer the loan to both salaried and self-employed individuals. Are you a self-employed individual looking to apply for a home loan? Whether you are a self-employed professional or non-professional, lenders offer home loans considering various factors. However, in some cases, the criterion of offering the loan amount is a bit different. In this article, we are going to discuss home loans for self-employed.
To begin with, self-employed individuals are the ones who offer services on their own & they are not working with any company or entity. They can be professionals, including doctors, CAs, MBAs, or engineers. Non-professional self-employed mostly include traders, contractors, daily wage labourers, and others.
Let’s look at some of the key factors that lenders look at before offering a home loan to self-employed:
- Applicant’s age: Typically, banks offer home loans to borrowers who are between the age of 21-60 years. The younger you are, the more time you get to repay the home loan.
- Income: Lenders also consider the income of the borrowers to check for the financial capability of repaying the home loan. To ascertain your earnings, the lender also assesses the ITR documents to know your overall entrepreneurial ability.
- Existing debts: Banks will also check if you have any other existing debt, such as credit card dues, personal loans, or any other liability. If your existing loan burden is less, the probability of securing a home loan is also high.
- Credit score: A good score also improves the chances of home loan approval. The rating allows the bank to understand your credit history & how you have managed your past loan liabilities.
Documents required for a home loan:
Self-employed individuals are required to furnish the following documentation:
- Identity proof
- Address proof
- Proof of income (IT returns, income statements, current account statements, others)
- Profit and loss account statements audited by CA
- Property related documents
If you are a self-employed individual, it is easy to avail of a home loan provided you have the necessary documents, and you can meet the home loan eligibility criteria mentioned by the lender. However, before applying for a home loan, you think about the following parameters:
- Comparing interest rates offered by the different lenders
- Checking the CIBIL score
- Determining the home loan eligibility
- Affordability in terms of home loan EMIs
- Choosing the right lender
- Flexibility for choosing the repayment tenure
- Additional charges applicable on the home loan
- Check for any pre-approved offers
It is easy to apply for a home loan online these days. If you are not familiar with the online process, you can visit the nearest bank branch to submit your home loan application along with the necessary documents.