LIC Housing Finance Home Loan Eligibility

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: 

• The applicant may be a resident of India or a Non-Resident Indian to avail of a home loan.
• The minimum age of the home loan applicant is 21 years.
• The maximum age of the home loan applicant is 70 years at the time of maturity of the loan.
• The individual should have a monthly income of at least Rs.25000 in order to apply for LIC Home Loans. 
• The applicant should have a credit score of at least 600 in order to be eligible for a home loan.

When the customer fulfils the eligibility criteria for these loans, they enjoy a host of benefits: 

• A better interest rate: When the applicant fulfils the LIC home loan eligibility criteria, he or she can also get lower interest rates. The higher the eligibility of the customer, the lower the interest rate.
• Higher repayment tenure: Eligibility criteria like the age of the customer determine the repayment tenure that they can get. Younger customers get a higher repayment. One advantage of LIC Home Loans is that they also offer loans to pensioners who can extend the repayment tenure until they are 80 years old.
• Higher slab for loan amount: Factors like the monthly income and the value of the property can influence the loan amount that is sanctioned to the borrower. If they have a higher repayment capacity, they get a higher loan amount. If the property value is higher, the loan amount sanctioned is also higher because it gives the lender a better mortgage or security against the loan.

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: 

• Salaried applicants are all individuals who are working for government organizations and private companies or corporations. 
• In the case of self-employed individuals, the applicant should have work experience of at least 3 years in their industry. The business should have earned profits over the last 2 years at least. 
• Families that fall in the income bracket between Rs.3 Lakhs and Rs.18 Lakhs can get a housing loan under the Pradhan Mantri Awas Yojana. 
• Pensioners are also eligible to get home loans. They can enjoy a repayment tenure that extends until they are 80 years of age. 

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: 

• In order to be eligible for a LIC Home loan, the applicant should be at least 21 years old. 
• For older customers, the maximum tenure can be 30 years or until the candidate is 60 years of age, whichever comes earlier. 
• For salaried individuals, the repayment tenure can be extended until their retirement age. 
• There are special loans like LIC Griha Suvidha that allow an extension of the loan term for individuals who are close to their retirement age. 
• Pensioners have the option of extending their repayment tenure until they are 80 years of age. 
• When a pensioner applies for a loan with a younger co-applicant, the maximum loan tenure offered is 30 years. 
• For NRI customers, the age limit is the same as it is for resident Indian customers. However, the maximum tenure offered to salaried individuals is 30 years and for self-employed individuals, it is 20 years. 

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: 

• The borrower has the ability to decide the risk factor associated with lending money to a particular borrower.
• The borrower can calculate the margin that he or she needs to pay in order to avail the loan.
• The LTV ensures that the lender does not sanction a loan amount that is higher than the value of the property.
• The interest rate provided for any loan is determined by this important LIC Home Loan Eligibility Criteria. 
• The eligibility of the individual for the loan can also be improved by taking into consideration other properties that he or she owns.

In the case of LIC Home Loans, The LTV offered is as follows:

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: 

• Loan and credit repayments: This is the most important factor when deciding the credit score of an individual. When you make repayments towards any existing credit on time, you become a credible borrower. For individuals who make full repayments before the final due date, the credit score increases steadily. 
• Usage of available credit limit: Individuals who use their credit limit wisely are likely to have a higher credit score. When you use all your credit limit or make use of credit cards to regularly withdraw cash, it depicts poor financial health. As a result, you get a lower credit score. 
• Secured versus Unsecured loans: If you have fewer unsecured loans and a higher number of secured loans, you will enjoy a higher credit score. If you have too many unsecured loans like personal loans, it showcases an urgent need for funds. This reduces your CIBIL score considerably. 
• Loan applications sent out: This is one of the most important reasons why it is necessary to conduct a LIC home loan eligibility check before you apply for a loan. If you send out multiple applications in a short time span, it shows financial stress. In case you have any rejection it reflects poorly in your credit report. So, make sure that you only apply for loans where you have maximum chances of getting approval. 

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: 

• A concession is offered to women with respect to the rate of interest
• In case of PMAY Loans that are applied for jointly, the woman should be a co-owner of the property.
• In case of sole loans offered under the PMAY loans, the house should be registered in the name of the female head of the household.

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 

• These loans are provided for resident Indians as well as Non-Resident Indians. 
• Salaried individuals working in public and government organizations are eligible for these loans. 
• Self-employed individuals with a minimum experience of 3 years in their industry can get a home loan. 

Griha Suvidha Loans

• Salaried employees who get at least 70% of their salary through any banking channel can get a loan.
• For salaried individuals who are paid in cash, the maximum income is Rs.30000 for a single borrower and Rs.40000 for joint applicants. 
• For salaried individuals without any pension, an extension of 10 years above their retirement age is provided. 
• The maximum age of these individuals at the time of applying for the loan is 50 years 
• Self-employed individuals can get an extension of a home loan up to 75 years of age. 

Pradhan Mantri Awas Yojna 

• Every adult member in the family who is earning is considered to be a unique household. 
• In the case of LIG or EWG, the house should be in the name of the primary female member of the household or in the name of the husband and wife in case of a joint application. 
• Married couples can get the house together with joint ownership or sole ownership as long as they fall within the income eligibility criteria. 
• No beneficiary family should have a pucca house in their name or in the name of their family members in any part of India. 
• They should not have availed of any other housing scheme offered by the Government of India. 

Griha Varishta Home Loans for Pensioners 

• The borrower should be a pensioner retired from a nationalised bank, PSU, state government, or central government. They should draw their pension under the Defined Benefit Pension Scheme. 
• The applicant should not be over 65 years of age as on their last date of birth. 
• In case the income of younger co-applicants is taken into consideration, the repayment tenure offered is 30 years. 

Home Loans For NRIs 

• This home loan is available to all salaried individuals who have the status of an NRI or a PIO. 
• The applicant should have a CIBIL score of at least 600. 

Plot Loans 

• The plot should be purchased from the Government or other Development Authorities and should have an approved layout. 
• You can get up to 75% of the value of the property
• The maximum tenure of the loan is 15 years. 
• A maximum of 60% of the loan amount sanctioned can be used for the plot and the balance must be used to construct the house in case of a composite plot and construction loan. 

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.