LIC Housing Finance home loans can be taken for both purchases of built-up property or construction on pre-owned land. Indian residents and NRIs who are salaried or self-employed, age between 21-70 years and enjoy a regular income inflow are eligible for LIC home loans. Check your LIC Home Loan eligibility to avail LIC home loan at competitive rates.
LIC offers home loans for the construction of a new property as well as the purchase of properties that are ready to move in. One of the most important features of these loans is that they offer the simplest eligibility criteria.
These eligibility criteria are useful in determining if a customer is capable of making regular repayments towards the LIC Home Loan that they have availed. These loans are offered to both self-employed and salaried individuals. While the individual home loan products have some specific eligibility criteria, there are some general ones that are applicable to most loan schemes:
When the customer fulfils the eligibility criteria for these loans, they enjoy a host of benefits:
The income of the applicant affects their eligibility criteria the most. The LIC Home Loan Eligibility based on salary does not take into account only the income that the applicant gets in hand every month. It also takes into account the other mandatory expenses each month and the amount that the applicant is left with to make payments towards the EMI.
LIC offers home loans to both salaried and self-employed individuals. The required monthly income to be eligible for these loans is Rs.25000. However, there are some important points to remember when it comes to the eligibility of the customer based on the income generated each month:
Age is an important criterion in determining the repayment tenure that you are eligible for. The younger the candidate, the longer the repayment tenure. That said, LIC also offers home loans to pensioners who can get a sizeable loan amount for home purchase or construction despite being older.
With respect to age, there are some important criteria and factors that are taken into consideration, as mentioned below:
With home loans, lenders consider the Loan to Value ratio. This means that the loan amount that is offered is based on the value of the property. However, when calculating the LTV, the value of the property is decided by a LIC evaluator. This amount can be different from the actual market value of the property.
The LTV is a very important factor because it provides a lot of valuable information to the lender and the borrower as mentioned below:
In the case of LIC Home Loans, The LTV offered is as follows:
|0-Rs.30 Lakhs||90% of the value of the property|
|30 Lakhs - Rs.75 Lakhs||80% of the value of the property|
|75 lakhs and above||75% of the value of the property|
Every time you make any financial transaction, be it applying for a loan or repaying existing credits, a detailed report is sent to the Credit Bureau of India. Based on the financial health and discipline of the individual, a credit score is provided. The higher this credit score or CIBIL score, the more reliable the borrower is according to any lender.
There are many factors that help the credit bureau decide the CIBIL score of an individual:
All banking and finance organizations have a minimum CIBIL score requirement in order to consider the individual eligible for a loan. In the case of a LIC Home Loan, the minimum CIBIL score required is 600.
LIC Home loan Eligibility For Women remains the same as it is for other applicants. However, women applicants enjoy a few benefits as mentioned below:
The minimum and maximum age limit and the income criteria for home loan eligibility remain the same for women.
It is very important to carry out a LIC Home Loan Eligibility Check before you finalise any loan product. This is because each product has some specific eligibility criteria. Here is a list of LIC Home Loan products and the eligibility criteria for each one:
LIC Housing Loans
Griha Suvidha Loans
Pradhan Mantri Awas Yojna
Griha Varishta Home Loans for Pensioners
Home Loans For NRIs
The Fixed Obligation Income Ratio or the FOIR tells the lender if the borrower has enough funds remaining each month to make payments towards the EMI for the home loan. The Fixed Obligation Income Ratio is calculated as a percentage. The formula used is as follows:
(The Total expenses per month/ The Total income each month) x 100
The expenses each month that are calculated are the mandatory monthly outgoings. This includes your EMIs towards any existing loans, rent, PF, and other expenses that you cannot avoid.
For LIC Home Loans, the FOIR expected is 65%. This means that the expenses that you incur each month should not be more than 65% of your total salary. This means that you have 35% of the salary remaining each month. This amount should be higher than or equal to the EMI calculated towards your loan. This ensures that you do not feel any burden each month when making repayments towards the loan.
Home Loan Eligibility by Banks
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Although the eligibility criteria differ from one loan product to another, the primary LIC Home Loan Eligibility Criteria are as follows:
LIC home loans give you a repayment tenure of up to 30 years. So, the longer the repayment tenure, the lesser the EMI per month. However, when you opt for a longer repayment tenure, the outgoing towards your interest also increases. So, it is recommended that you choose the lowest possible repayment tenure according to the EMI that is most affordable to you. Of course, there are other factors like your age at the time of application and your employment status that are taken into account when deciding the actual repayment tenure that you are eligible for
If you do not qualify for a LIC Home Loan, there are many options available to you to increase your chances of getting approval. For e.g - you can show more income sources, improve your CIBIL score, reduce your liabilities, and make timely repayments.
When you add a co-applicant for your LIC housing loan, there are two ways in which your eligibility increases:
Your credit card repayments affect your CIBIL score the most. If you can ensure that your credit cards do not have any outstanding dues, you can also increase your credit score. Try to make full repayments instead of only paying the minimum balance towards your credit cards, It also helps to repay your credit card outstanding before the actual due date. For best results, try to minimise the use of your credit cards and keep the outstanding limited each month so that you can make the repayments easily.
Yes. LIC home loans are available for NRIs. This includes individuals who currently reside and work overseas but want to invest in a property in India.
When you have too many loans, your credit score drops. This reduces your eligibility for a home loan as well. If possible make prepayments on your loans or foreclose as many loans as possible to reduce your liabilities. If you decide to reduce the loans that you currently have, focus on the unsecured loans. These are loans that do not require any assets or mortgage to be pledged against them. When you reduce your liabilities, you increase your credibility as a borrower. As a result, you become a low-risk borrower who is likely to repay the loans according to the terms mentioned in the sanction letter.
When you have more income sources, it shows that your repayment capacity is better. Normally a fixed income like the salary is taken into consideration when your eligibility for a home loan is calculated. However, if you have other income sources like rent or returns from any investment, make sure you show that to the lender. This helps improve your chances of not only getting approval on the loan but also getting a higher loan amount sanctioned.
LIC checks the documents provided along with your home loan application to evaluate your eligibility. Your credit report is also taken into consideration for this. Customers can check if they are eligible for a particular product using an online Eligibility checker that is available on the LIC website.
There are some options available to help you increase your LIC home loan eligibility:
FOIR is short for Fixed Obligation Income Ratio. This is the ratio of the income against mandatory expenses that you have each month. These expenses include your rent, EMIs towards other loans, living expenses, education fees, and others. After deducting these expenses, the income that remains should be sufficient to pay your EMI each month. At LIC the FOIR needed to qualify for a home loan is 65%. This means that all the mandatory expenses per month should not be more than 65% of your income.
Age is the first qualifying factor for home loans as it determines the repayment tenure that you can get for your loan. If the repayment tenure is shorter, then the EMI is higher. This reduces the repayment capacity of customers. Therefore, there is a maximum age of the customer that is fixed for the end of the loan tenure. This ensures that the loan does not become a liability for the bank or the members of the family in the future.
Younger applicants can also enjoy lower interest rates as their repayment capacity is better.
It is highly recommended that you check your eligibility before applying for a loan to avoid rejection. You can get in touch with LIC customer care to get details of the eligibility for a home loan. All the factors are also listed on their website.
Alternatively, you can use an eligibility calculator online where you only have to provide a few details and important documents to check if you qualify for a LIC Home Loan.
Ensuring eligibility before you apply for a loan also makes sure that your Credit score does not get affected because of the rejection of your application.
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