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✓ Home Loan from ₹5 Lakhs To ₹5 Cr ✓ Multiple Lending Partners ✓ Attractive Interest Rates

Even if you are a self-employed individual, you can get a home loan as easily as salaried individuals. In fact, lenders of today even have home loan offerings that are specially tailor-made for self-employed individuals. This article will take a look at the specifics of such home loan credit offerings, such as the home loan eligibility criteria, home loan application process, the documents required for home loan, and the tax benefits of a home loan for the self-employed.

Compare Interest Rates on Home Loan for Self-Employed from various Lending Partners

The interest rates at which the lending partners of Bajaj MARKETS are willing to give home loans to the self-employed are as follows:

Bank Name

Starting Interest Rate (p.a.)

Bajaj Housing Finance Home Loan

8.00% p.a. onwards

UBI Home Loan

6.90% onwards

ICICI Bank Home Loan

7.20% p.a. onwards

PNB Housing Finance Home Loan

7.35% onwards

HFFC Home Loan

12% onwards

 

Can you get a House Loan if you are Self-Employed?

Self-employed individuals are eligible to apply for home loans, which you can either do in your own individual capacity or with a co-applicant. Although every proposed owner of the property that you are picking up a home loan for will mandatorily have to be a co-applicant of the home loan, not all of your co-applicants have to be the future co-owners of your home. It is highly advisable that you make a family member a co-applicant as long as they meet the eligibility criteria.

Home Loan Eligibility for Self-Employed

Here is the home loan eligibility criteria that you will need to satisfy if you want a loan for self-employed individuals:

  • Applicant’s Income and Repayment Capacity: In order to prove that you can repay the loan, you will have to submit your income tax returns (ITR) for the past three years. Additionally, you will have to furnish the audited profit and loss (P & L) statements of your business of the past two years.

  • Applicant’s Profile: The lending institution will assess the application of your home loan on the basis of a handful of parameters such as:

  • Your age: The younger you are, the better are your chances of securing a home loan as the same will translate into a favourable risk profile for you in the books of the lender. If you are in your 40s or 50s, you may be considered to be an individual with a high risk profile.

  • Educational background: Some lenders may also look at your educational background and qualifications.

  • Number of dependents: The number of dependents that you have may also be taken into consideration. A high number of dependents would mean that you have to take care of a lot of expenses on a monthly basis. Therefore, if you have many dependents, the official representing the lender may become sceptical about your loan repayment capability.

  • Financial Profile: Your loan repayment ability is determined on the basis of your overall financial condition. The lender will assess your current outstanding debts such as your pending credit card dues, your personal loans, or any other home loan that you may be repaying currently, among others. If your existing debt is low, there is a good chance that you will successfully get a house loan.

  • Entrepreneurial ability: As you are self-employed, your income generation ability will be reviewed and scrutinised. While doing so, the lender will look at the overall profitability of your venture as well as the number of years you have been running the business successfully. If you also furnish the documents concerning the risks associated with running your business, it may just help you in availing the loan amount. All these elements will be ascertained from your audited financial statements and income tax returns (ITR). Hence, you must ensure that your accounting books and tax returns are up-to-date.

Home Loan Documents for Self-Employed

Below mentioned is the list of Home Loan Documents required for Self Employed Individuals:

  • An Identity Proof such as a copy of your your Passport, your Voter Card or Aadhaar Card Copy

  • Residence Proof such as your Passport, your Voter Card, your Aadhaar Card and Bank Account Statements

  • Income Proof such as your IT Returns, your PAN Card or your TAN Card, among others which essentially indicate that enough funds are coming in on a monthly basis for a home loan

  • Certified financials such as the Profit and Loss statements and Balance Sheets

  • A copy of the purchase agreement of your property

Home Loans for Self-Employed FAQs

✔️Can self-employed individuals be eligible for home loans?

Yes; even self-employed individuals can just as easily apply for a home loan. Make sure that you meet the eligibility criteria and have the necessary documents in place before starting the application process.

✔️Can self-employed individuals get any tax benefits for taking home loans?

Yes, you can get tax benefits for home loans which you have picked as a self-employed person under Sections 80C, 80EE, and 24 of the Income Tax Act of 1961.

✔️Can self-employed people have salaried individuals as co-applicants?

Self-employed people can co-apply for a home loan with people who are drawing salaries from reputable companies. However, both you and your co-applicant(s) must satisfy the eligibility criteria set by the future lender.

✔️What factors do banks consider before approving home loans for self-employed people?

The key factors that are taken into consideration while processing a home loan for self-employed people are:

  • Your repayment capacity and income

  • Your credit score

  • Your age

  • Your educational qualification(s)

  • Your overall financial status

  • Your ability to generate profits through the venture(s)

  • The number of years that you have been running a business successfully

✔️ What is the maximum home loan repayment tenure that self-employed individuals get?

If you are a self-employed individual, you can pay off your home loans over the course of 30 years. However, your actual tenure will depend on factors such as your income, age, and overall repayment capability.

✔️Are there any prepayment charges on the home loan for the self-employed?

Prepayment charges on the home loan will depend on the lender that you are borrowing from and the type of home loan that you avail. Some lenders will not impose any prepayment charges on you if you repay the amount ahead of schedule. However, other lenders can charge a certain amount for prepayment.