Canara Bank Home Loan Eligibility

Canara Bank or Dewan Housing Finance Limited of is one of the leading home loan providers in India. Home loans are opted by almost everyone in today’s world. The Canara bank home loans come with great benefits and features. They are designed to meet the changing needs and requirements of the customers.

The Canara Bank home loan eligibility is based on different factors. These factors are mentioned below:

• Age
• Income
• Property value
• CIBIL score
• Fixed Obligation to Income Ratio

Canara bank home loan eligibility based on age

The age of the applicants plays a very important role in the determination of eligibility towards a home loan and the repayment capability for the loan. Lower the applicant’s age, higher is the tenure available for the repayment of the loan amount. In order to be eligible for a home loan offered by Canara Bank, the applicant must be at least 21 years old at the time of commencement of the loan. Canara Bank Housing Finance provides home loans for a maximum tenure of 30 years for both self-employed applicants and salaried applicants. The maximum loan tenure that can be availed by an applicant is mentioned below:

Canara bank home loan eligibility based on property

The entire value of the property is not financed by the home loan provider. Canara Bank Housing Finance will offer a certain percentage of the total property value as the home loan. The maximum home loan eligibility will be dependent upon the property value shown in the table below:

If a co-applicant is added, it boosts the primary applicant’s home loan eligibility. This happens as adding a co-applicant increases the repayment capability of the primary applicant. The co-applicant must have a clean CIBIL record, low obligation and good income.

All the documents associated with the property being purchased must be satisfactory and passed by the legal team of the bank.

Canara bank home loan eligibility based on net income

The net monthly income is also very important in the determination of home loan eligibility. It states how much home loan an applicant is capable of paying after taking care of other daily expenses depending on the applicant’s standard of living. For example, if the applicant’s net income per month stands at Rs.70,000, the value of the house being purchased costs Rs.50 lakh and the rate of interest stands at 8.35%, then the maximum loan amount that can be availed by the home loan applicant is going to be as follows:

The applicant may choose to repay the loans with high EMI and short tenure in order to boost the Canara Bank home loan eligibility.

• Nature of the employment – The applicant’s nature of employment will also be checked and verified by the home loan provider. It will check if you are a self-employed applicant or a salaried applicant. The home loan provider will also check the income stability and job experience of the applicant.

Canara bank home loan eligibility based on credit score

The credit behaviour of the home loan applicant and track record from the past credit card providers and lenders gets recorded in the CIBIL score. Banks and other lenders consider this report while determining the applicant’s creditworthiness. Thus, CIBIL score is extremely important in defining the applicant’s eligibility for a Canara Bank home loan. If the applicant has a high credit score, it automatically implies that the credit behaviour of the applicant has been really good. The chances of the home loan application getting approved is also very high in such cases. However, a low CIBIL score will bring down the eligibility factor of the applicant.

Some of the factors that affect the applicant’s credit score are mentioned below:

• Credit limit usage – The credit card bills and statements show the applicant’s credit behaviour. Using the entire limit of the card reflects financial stress and indiscipline on the home loan applicant’s part. This causes a negative impact on the credit score.
• Several loan applications – In case the applicant applies for a home loan in in different banks at the same time, it can cause a negative impact on the score are in turn reduce the eligibility factor of the applicant.
• Unsecured loans – The applicant must strike a balance between the unsecured loans and secured loans. A high number of unsecured loans can affect the applicant’s credit score substantially.
• Late payments – A negative impact is caused to the applicant’s credit score if he/she fails to make repayments on time.

Canara bank home loan eligibility based on fixed obligation to income ratio

Fixed Obligation to Income Ratio or FIOR is extremely important when it comes to determining the Canara Bank home loan eligibility. The lender takes all the fixed obligations of the applicant into account while defining the eligibility of the applicant. The minimum FIOR needed to be eligible for a Canara Bank home loan stands at 0.65. The home loan calculator can be used to calculate the home loan eligibility.

Documents required for Canara bank home loan application:

• Completed application forms with 2 passport size photos of the applicant
• Proof of Address (PoA)
• Proof of Identity (PoI)
• Sale Deed of the property
• Agreement for Sale
• Copy of the plan that has been approved for proposed construction/extension/addition
• Detailed cost estimate/ report from Bank's Panel of Chartered Engineer/Architect
• Salary Certificate and Form No.16 are required to be submitted by salaried individuals
• IT Returns for the past two years and Balance Sheet/P&L Account for the past three years for self-employed and businessmen
• And other documents

The APR calculator on the Canara Bank's website can be useful in determining indicative rates for the home loan. An individual can use the calculator to check the tentative EMIs based on total loan amount, the rate of interest, and tenure of the loan.