DBS Bank Home Loan Eligibility

The DBS Bank headquartered in Singapore is a multinational banking and financial services corporation. It was established in the year 1968. DBS Bank operates in India through 18 branches across the country with the headquarters in Mumbai. The bank has been the leader in the digitization of banking services and products.

The bank offers various personal, corporate and retail products and services and their home loan is the best choice for the first time home buyers and for the ones who want to give a facelift to their existing homes.

There are a set of conditions stipulated by lenders to qualify for the Home Loan. The eligibility criteria for Home Loan by DBS Bank are:

Salient features of DBS Bank Home Loan are:

The list of documents required for Home Loan by DBS Bank is as detailed below:

The following are the factors affecting the DBS Bank Home Loan Eligibility.

Age:  The loan eligibility mainly depends on the age of the borrower even though the repayment capacity and the value of the property have a major role in deciding the eligibility. The lender will be confident of prompt recovery of the loan if the applicant is in the prime of his career and has a long period of service left. This ensures a longer period of regular income.  You will also get a longer repayment tenure and the EMI will be much lower and affordable even for a higher amount.

On the contrary, if you apply for your loan when you are close to your retirement, then the tenure available for repayment will be lower and the monetary burden will be higher as the EMI will be higher. In such instances, delayed payment of EMI or missing of  payment will be foreseen and the lender will be skeptical while deciding the loan eligibility.

Credit Score: A credit score is a mirror of your financial discipline and creditworthiness. It is good to avail small loans for short tenures to create a credit score. If in the future you are planning a heavy investment by availing a loan, the primary requirement is to create a credits score. In the absence of a credit score, the lenders will not be able to assess your repayment pattern.

A good credit score is the first requirement as the lenders expect that all the loans given turn out go be good assets. This can happen only when the loan is given to a customer who has good financial discipline and they are sure that the repayments are made promptly.

Current loans: If you are availing loans for short durations with an aim to create a credit history, then it is fine. But if you are a habitual borrower and at some point in time are not able to cope up with the monetary burden and end up delaying the EMIs and having unpaid dues, then your creditworthiness will go down drastically.

Banks will not encourage a proposal from a customer who is already overburdened with the existing commitments. If you have to be eligible for a home loan of a considerably good volume, then manage your loans and try to keep the existing commitments as low as possible before applying for a home loan.

Income: The home loan eligibility is directly dependant on the income and repayment capacity of the applicant. If the applicant has a good income and the existing commitments are minimal, then the possibility of being sanctioned with a higher loan amount is bright.

Property and LTV Ratio: The property created out of the loan is the security against which the loan will be sanctioned. This means that in the event of the loan going bad despite all recovery measures, the only recourse the bank will have is to liquidate the property and set off the outstanding loan balance with the proceeds.

Over a period of time, if the EMIs are not paid regularly, the outstanding loan amount will be much higher than the originally availed amount. The bank will be able to recover the outstanding loan amount only if the value of the property has appreciated during the course of time since the major investment for the property would have been made by availing the home loan.

Hence if you choose a property in a location where the appreciation in the value of the property is good, the banks will easily sanction the loan as the risk attached to such a proposal will be low.

Employment: The banks trust you better as far as the recovery of the loan is concerned if you are a confirmed employee of Government Organisation/PSUs/MNCs or reputed Public/Private Company since there is an assured income. The eligibility to a great extent depends on your employment status as well.

The following are some of the tips to increase the home loan eligibility:

• A debt to income ratio is stipulated by the lenders to assess the residual income available for your regular sustenance after providing for all your commitments including the proposed commitment by way of home loan EMI. If you are planning to build/purchase a house, the investment will be huge and the quantum of the loan required also will be high.

If you have to be eligible  for a higher quantum you will have to cut down on the existing commitments by pre-paying some of the loans. The higher residual amount available out of the monthly income to provide for the home loan EMI, the higher will be the eligible amount.

• The minimum credit score required to qualify for DBS Bank Home Loan is 650. If your score is higher than the minimum required you will be a preferred candidate for the loan. Before applying for the home loan, check your credit score. If it is below the desired level check how you can improve the same. If there are any entries which you feel does not pertain to you, then get the same rectified. A good score will not only improve your eligibility but will also fetch you additional benefits like better rate of interest, flexible repayment terms etc.
• It is advisable to make the decision of owning a house in the early stages of your career. This will give you the advantage of opting for a longer repayment tenure. With a longer repayment tenure, the EMI will be affordable and this will reduce the burden on your monthly income. You can also opt for a step-up EMI, wherever there is such a provision. In the step-up EMI facility, the EMI will be kept low initially and will increase in stages as and when your career graph and the income improve. By doing so, the repayment tenure will come down eventually.
• If you have identified a property which is heavily priced and you feel that you may not be able to get funding to that extent with your income alone, you can enhance the eligibility by availing the loan in joint names with close family members who have a regular and stable income. You will be permitted to avail the loan with 4 joint borrowers.
• Preference is given to existing customers when it comes to borrowing since the credibility of the borrower can be assessed with the past record. If you are an existing customer with good standing, you can leverage this to your advantage for negotiating for a better rate of interest, repayment terms and waiver/concession in other charges. If you have the intention of owning a home some time in life and have identified the lender, then open an account well in advance before applying for the loan..
• Investment in a property is a major decision in one's life and so should not be done in haste. The quantum of a home loan will be huge and even a small difference in the rate of interest will go a long way reducing the cost of the loan. You take your time and do thorough shopping before you decide the lender. You can take the assistance of loan aggregators like MyMoneyMantra who not only provide you a list of home loan deals to choose from but will also give their valuable advice on how to strike the best deal.

Availing a home loan is not as simple as just filling an application and accept the outcome. Investment in a property is a substantial one and you will need to know the month-on-month financial commitment that follows and the terms and conditions that are attached etc.

If you have to be aware of some of the essential elements before applying for a home loan, you will have to use an EMI calculator for that.

• Using an EMI calculator you will be aware of the loan amount you will be eligible for and you can look for a property to suit the budget instead of going overboard and landing in financial stress.
• You will be able to check the various home loan deals and can choose the one that best suits your budget.
• You will get to know in advance the additional month-on-month commitment with the home loan and can be prepared for it. You can also contemplate on doing away with some of the expenses beforehand to accommodate the new commitment.
• By knowing the eligible loan amount before applying for the loan, you will be filling the exact amount which will improve the chances of approval of the loan.