Home Loan Guidelines for Salaried and Self-employed Individual

Buying a house is now just a loan away. A home loan gives you the opportunity to buy your dream house today and pay for the same on an instalment basis in the future. It does not matter whether you are a salaried or self-employed individual, as the procedure for applying and obtaining a loan is the same for both. The only difference lies in the documents that you will be required to submit to the loan provider.

Financial institutions receive many home loan applications every day. However, not all individuals have the will and capability to settle the loan. This is why lenders prefer conducting a strong background check of all the applicants before sanctioning a loan.Your eligibility for qualifying for a house loan largely depends on your annual earnings and credit ratings issued by financial institutions. Loan providers assess your ability to repay the loan by analyzing your earnings while your willingness to settle the loan can be confirmed by taking a glance at your credit ratings (or CIBIL score).

• A duly filled loan application form
• Photocopy of documents that confirm your identity (driving license, PAN card, Aadhaar card, voter ID card, etc.)
• Photocopy of documents that confirm your residential address (telephone bills, electricity bills, ration card, etc.)
• Your passport size pictures
• Photocopy of your updated bank passbook or statements

If you are a salaried individual, then you must submit the documents mentioned below while applying for a home loan :

• An updated income tax return form
• Pay slips for the last 3 months
• Updated bank statements or passbook for the last 6 months
• Updated statements of your salary account
• If your period of employment in your current company is less than 12 months, then you will also need to submit your employment letter

If you are self-employed, then you will be required to submit documents that prove your company’s financial credibility. Let’s take a look at the documents required in the case of self-employed home loans :

• The company’s audited income statements
• The company’s audited balance sheets
• Income tax returns for the last 3 assessment years
• A photocopy of the Memorandum of Association, Partnership Deed (in case you own a partnership firm), and Articles of Association (only if applicable)
• The company’s current account statements for the last 6 months
• Your own savings account statements for the last 6 months
• A photocopy of the VAT registration
• A photocopy of your educational qualification

The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.