Salaried Individuals :
Eligibility criteria for salaried employees are broadly along the following lines:
- Minimum age of applicant: 21 years
- Maximum age of applicant at the time of loan maturity: 60 years
- Minimum Net Monthly Income: Rs. 12000 p.m.
Self-employed Individuals :
Broad eligibility criteria for self-employed employees:
- Minimum age of applicant: 21 years
- Maximum age of applicant at the time of loan maturity: 65 years
- Minimum Annual Income: Rs. 150000 p.a.
Loan amount :
The loan is given as a certain percentage of the property's market value (usually around 40 per cent-60 per cent). But the threshold amount too is generally defined by most lending institutions like say, minimum Rs. 25000 and maximum varies as per financial institution.
Tenure of work experience :
If you are salaried/self-employed, banks take into account the number of years you have remained in service/profession.
Repayment Capacity :
The lender evaluates your repayment capacity based on your income, savings, and debt obligations, other than household expenses.Based on this information the lender decides on the periods of loan that you are eligible, after considering your previous debts and obligations.
Document Required
Generally the documents required to processing your loan application are almost similar across all the banks; however they may differ with various banks depending upon specific requirement etc. Following documents are required by financial institutions to process the loan application:
Proof of income :
Copies of last three years income tax returns (along with copies of Computation of Income/Annual accounts, if any), Form 16/Form 16A, last three months salary slips, copies of the last 6 months statements of all the active bank accounts that reflect your salary/business income details etc.
Age proof :
Copy of the school leaving certificate/driver's licence/passport/ration card/PAN card/voter identity card etc.
Address proof :
Utilities bills, such as phone and electricity bills, need to be provided to prove that you are actually staying at your current address.
Identification of income :
Documents with your photograph. Sometimes, one document, if it contains a photograph, the current residential address, and the correct age can be the proof for all three mentioned above.
Employment details :
Copy of the school leaving certificate/driver's licence/passport/ration card/PAN card/voter identity card etc.
Address proof :
If your company is not well-known, a short summary about the nature of the company, its business lines, its main customers, its competitors, number of offices, number of employees, turnover, profit, etc. may be needed. Usually, the company profile that is available on the standard website of the company is enough.
Property papers :
The bank may require title deeds and other documents relevant to the property. This will be important as the loan can be taken only against free-hold property. Also, it can be only about 40-60 per cent of the cost of property. It is important for the bank to establish the value of the property and its legal status before the offer can be considered.
Process/Steps
Application :
You will need to fill a loan application with accurate details, personal and professional, loan requirement, details of the property intended for mortgage etc.
Documentation :
Along with the application form and the credit documents, you may have to pay a processing fee to the bank. An upfront fee could be collected to maintain your loan account records, sending income tax certificates every year, maintaining post-dated cheques, etc
Investigation :
Next comes the loan Investigation stage, the stage at which the loan process gains actual momentum. This could start with a personal discussion followed by the bank's field investigation.
Sanctioning of the loan :
Loan sanction is the next process in the series. At this stage, the bank has checked your financial credentials based on criteria such as your income, age, qualifications, experience, employer, nature of business (if self employed), etc. They work out the maximum loan eligibility, and an indicative loan amount that the bank is willing to offer.
Valuation and legal check :
Valuation and legal check on property and papers is the next stage where the focus of the bank will shift to the property that you intend to mortgage. Make sure the property papers and the relevant NOCs are in place. The bank's lawyer will check the property papers for their legality. The bank may also send an expert to visit the property. This expert could be a bank employee or an associate with a realty firm.
Disbursement :
Once the bank has ascertained all that it needs to be assured of you as a client, the property as a security, and your repayment capacity, it will disburse the loan. The bank does not enquire about the purpose for which you use the loan. Though, it stipulates that the loan should not be utilized in speculative activities.