Corporation Bank Home Loan Eligibility

Corporation Bank is one of the oldest public sector banks in India. Its headquarters are located in Mangalore. The bank was established in 1906 and, since then, has grown to over a lot of branches across India. Corporation bank now provides a myriad of core banking services and other financial products for its customers all over its 2600 branches across India.

Purchasing your own house is a dream that many Indians have. Having your own house doesn't just hold an emotional value, it is also a symbol of financial stability. A self-owned house reduces the hassles of rent, provides income tax benefits, gives you complete freedom to decorate your house etc. With the growing market rates, it is difficult to purchase a house. Home loan solutions are provided so that people can go for their dream house paying the instalments as they find convenient.

Corporation bank provides a lot of different home loan packages for its customers. Before starting your application process, you need to make sure that you meet the bank's eligibility criteria so that your home loan application can proceed to the next step.

• The borrower can be an Indian National or a Non Residential Indian (NRI) or Person of Indian origin(PIO).
• The borrower can be a self-employed individual or a salaried employee.
• Home loan can be obtained for purposes like purchase of property, plot or reconstruction of property etc.
• The borrower?s age must be between 18 - 65 years.

Below are listed some features of a Home loan in Corporation Bank.

You will need to submit certain documents along with your Home loan application. These documents are mentioned below:

• Duly filled application form.
• Identity proof:
• Aadhar Card
• PAN Card
• Voter ID Card
• International passport
• Telephone Bill
• Electricity Bill
• Proof of Income:
• 3 months of salary statement(for salaried employees).
• Business existence certificate
• 6 months of bank statement
• 3 years of profit/loss statement
• 3 years of Income Tax returns(for self-employed individuals)
• Other documents:
• Processing fee cheque
• 2 passport sized photographs
• Property agreement
• Any other property-related documents

Home loans are high amount - high tenure loan, which is why approval depends on a lot more factors than just the eligibility. The bank should feel without a doubt, that the borrower will be able to pay the loan off successfully. If they feel the slightest of issues, they will reject the loan application. Below are some major factors that influence your home loan approval.

Credit score:

A credit score is calculated using your credit history. A credit score will denote your financial stability and strength. A high credit score is considered desirable as it means that you have a sound credit history and you have planned your finances well. A credit score is a very important factor as the bank has a way of studying your previous credits based on which they can determine your repayment capability. A credit score can be calculated by a lot of finance professionals or third party vendors like MyMoneyMantra. Corporation Bank accepts a CIBIL score of 650 or more.

Existing credit:

If you have an existing loan that you haven't paid off, it can become a negative factor in your loan application. Existing loans mean that you are already burdened with the EMI of one loan application. The bank will definitely have doubts as to whether you can handle two of them. The worry is more if you have more than one loan or credit card pending bills. It is prudent to consider paying off your previous loan and foreclosing it before applying for your home loan if you can.

Down payment:

Banks usually offer only 80-90% of the property amount for a home loan. The rest has to be arranged by the applicant themselves. Downpayment is this 10-20% of the amount that the applicant will pay as payment for booking the property. This will be a one time amount. The amount of downpayment can also have an impact on your loan application. The higher your downpayment, the lesser your loan amount, the higher your financial capability and the higher your chances of getting a home loan approved.

Experience and qualification:

Academic qualifications can reflect heavily on your loan application. Particularly so, if you are a young applicant because it can show your professional prowess. Your financial experience also counts in your eligibility. Hence, a higher professional experience can mean better financial stability. Banks require at least 2 years of financial experience to be able to approve your home loan.

No of dependents:

It is not enough that your income satisfies the eligible income criteria. The bank also verifies your liabilities and dependencies. A higher number of dependents can mean a higher strain on your finances. This means that your disposable income is lower than your actual income. Your disposable income should be enough to cover the EMI instalments comfortably.

Missed payments:

When you apply for a home loan, the bank will go through all of your previous finances and details. If you have ever missed an EMI instalment for your prior loans or credit card bills, this will be caught by the bank officials and will be a factor in your application process. A missed payment will also lower credit score, which will have an overall negative impact on your home loan application.

Even if you make sure that you satisfy all of the eligibility criteria mentioned above and you follow all the application steps successfully, there is still a chance that your application won't be accepted. The bank has the final say in a home loan disbursal and if the bank finds even the slightest chance of repayment failure, your application can be rejected. You need to ensure that your application is as solid as possible. Below are some tips to increase your home loan eligibility.

Get a financial assessment done:

A complete financial assessment is a good idea to get an overview of your finances. It will clearly show your financial investments, liabilities and give you an average figure of your disposable income using which you can determine your tenure ? interest ratio for the ideal EMI instalment. A financial assessment also advises on what incomes can you claim jn your loan application. You can get a financial assessment done through any finance professional or through third-party vendors like MyMoneyMantra.

High tenure:

The EMI amount depends on your loan amount and tenure. So, if your tenure is higher, it means a lower EMI amount. However, the rate of Interest also increases with your tenure. A lower EMI amount means a lesser monthly strain on your income. If the EMI amount is on par with your disposable income, the bank will consider it positively for your home loan approval.

Joint application:

If your spouse is also working, you can consider adding your spouse's earnings to yours through a joint application. This way, your total income increases and the repayment responsibility is shared between the two of you. This increases the chances of the bank providing home loan approval. Moreover, tax rebate can be applied for both of you which will provide for a higher tax rebate on the same loan application. You can also include your parents as co-applicants for a home loan. Friends, however, are not allowed.

Lower credit usage:

Your credit habits speak a lot about your financial prowess. A large number of credits acquired or big credit card bills are indicative of reckless spending. Frequent usage of credit card right up to the credit limit can also indicate a habit of overspending. This will reflect negatively on your home loan application. Try to lower your credit card spending to up to 20-30% of the credit limit overall.

EMI (Equated Monthly Instalment) is a term denoting the amount of money that the lender will receive from the home loan applicant as repayment against the loan that was disbursed. The EMI amount depends upon the principal amount of loan, the rate of interest and the tenure. A higher tenure often means a lower EMI amount as the total amount gets divided between the number of months. However, banks charge a higher rate of interest for higher tenure loans and this will increase the total amount of interest you will have to pay against the principal. You will have to find out the ideal tenure: interest ratio most comfortable for you long term by calculating the EMI amounts for your tenure.

EMI amount is calculated as shown below:

E = P.r.(1+r)^n/((1+r)^n-1)

Where E = EMI amount

            P = Principal loan amount

            R = rate of interest

            N = Tenure in months

As you can see from the above equation, calculating EMI amount is not an easy process, more so, if you are not a mathematically inclined person This is why there are several services in the industry that try to make this job easier for you. EMI calculators help you figure out the EMI amount will you have to pay for the required loan amount and tenure. You can also use it to figure out what tenure would be most suitable for you by checking the loan amount against different tenures to see what EMI to expect.

Benefits of the EMI calculator:

• Determine the loan tenure - Interest ratio most comfortable for you long term.
• Easy way to calculate EMI amount without doing heavy calculations yourself.
• Easy to use service which does not require special devices.
• Fast response for EMI calculation.
• Freedom to choose the plan as per the EMI amount you are most comfortable with.