Loan Requirements – Your Quick Guide to Getting Approved

Thinking about a home loan but not sure what paperwork or criteria you’ll face? You’re not alone. Most borrowers get stuck on the first page of the application because they don’t know what the lender really wants. This guide breaks down the must‑have documents, the typical eligibility rules, and a few insider tips to make the process smoother.

Key Documents You’ll Need

First things first – gather these items before you even log into the portal. Having them ready saves time and shows the bank you’re organized.

• Identity proof: Passport, driver’s license, or Aadhaar card.
• Address proof: Utility bill, rental agreement, or bank statement dated within the last three months.
• Income evidence: Latest salary slips (last 3 months), Form 16, and a recent bank statement showing salary credits.
• Employment verification: Offer letter or employment contract if you’re newly hired; for self‑employed, the last two years of ITR returns and profit‑and‑loss statements.
• Property papers: Sale agreement, title deed, and approved building plan for the house you’re buying.
• Credit report: Most lenders pull this automatically, but it helps to know your score ahead of time.

Missing any of these can delay approval by weeks, so double‑check before you hit submit.

Common Eligibility Criteria

Beyond paperwork, lenders look at a few core numbers to decide if you qualify.

• Age: Typically 21 to 60 years. Some banks extend the upper limit to 65 if you have a strong repayment record.
• Income ratio: Your monthly EMI should not exceed 40‑50% of your net income. This is called the debt‑to‑income (DTI) ratio.
• Credit score: A score above 750 gets you the best rates. Below 650 may still work, but expect higher interest.
• Employment stability: Most banks want at least 2‑3 years with the same employer or consistent self‑employment income.
• Loan‑to‑Value (LTV): Usually 75‑85% of the property’s market value. The more you can put down, the lower your risk and rate.

These criteria vary a bit by lender, but they’re the baseline across most Indian banks and NBFCs.

Now that you know what’s required, here are three quick tips to improve your chances:

1. Pay down existing debt: Reducing other EMIs improves your DTI and can lower the interest you’re offered.
2. Boost your credit score: Clear any overdue credit card bills, avoid new loans a month before applying, and keep utilization below 30%.
3. Show steady income: If you freelance, keep a clean record of invoices and bank deposits for at least six months.

Finally, don’t assume the first offer is the best one. Use the documents you’ve prepared to shop around, negotiate the rate, and ask for a waiver on processing fees if you have a strong profile.

With the right paperwork and a clear picture of the eligibility numbers, the loan approval process becomes far less intimidating. Keep this checklist handy, stay organized, and you’ll be moving into your new home faster than you think.