Will you be eligible for a home loan if you already have a business loan?

Loans are instrumental in meeting immediate financing needs. This usually leads to people entering into multiple financing arrangements for a varied purpose. Home loans are some of the most sought-after financing arrangements as everyone wants to live in their own house. However, what if you already have an ongoing loan like a business loan? Will you meet the home loan eligibility criteria in terms of taking a home loan alongside a business loan? Read along to know your answers!

Home loan alongside Business loan

There are no restrictions on the number of loans you can take together. Therefore, if you have an ongoing business loan, you will still be eligible to take a home loan. However, the following things need to be taken care of while taking a home loan with an already running business loan:

• CIBIL Score: Your CIBIL score should be good enough to show that you have enough creditworthiness to repay two loans together. Your CIBIL score will depend upon your past credit performance and repayment history. If you have been regular in repaying your business loan, then getting a home loan won’t be a difficult task.
• Already Existing Liabilities: If you already have other outstanding liabilities, like outstanding credit card bills, unsecured loans, etc., then adding a home loan will bring you closer to the debt trap. Assess your existing liabilities before adding a home loan to them.
• Income: Your income proof should reflect enough income to bear two EMIs together. As your income, apart from paying a business loan also goes to meet your living expenditures, adding a fixed financial obligation in the form of home loan EMI may strain your finances. However, if your income is enough to meet all these needs together, then you can easily get a home loan.
• Go for Joint Application: A good way to get your home loan financed is to apply jointly. It may be with your spouse or parents. This enhances the repayment capabilities as banks can rely on the income of more than one person to ensure repayment.

Features of Home Loan

Let’s proceed to know more about home loans and their eligibility:

1. Home Loan Interest Rates: Being secured in nature, home loans are some of the most affordable loans. Currently, home loan interest rates start at just 6.70% per annum. The interest rates may fluctuate depending upon the CIBIL score, profile of the applicant, and property details.
2. Home Loan Eligibility: Eligibility criteria for home loans usually vary according to the lenders. However, some common parameters for availing of a home loan include:

• Age: The age of the applicant shall be between 24 years to 65 years.
• Occupation: The applicant should be either a salaried person or a self-employed individual
• CIBIL: The CIBIL score should be good. CIBIL above 700-750 will be most preferable.

[There might be certain variations in the eligibility criteria depending upon the profile of the applicant]

Home Loan EMI Calculator

A home loan creates your fixed obligation towards repayment of EMIs. Therefore, it becomes important to preplan the amount and determine your budget before applying for the same. With the home loan EMI calculator, you can determine your EMI amount by just entering the loan amount, home loan interest rates, and tenure. This will give you the exact idea of how much you will require to allocate from your monthly budget towards your home loan.

Bottom Line

Home loans are some of the most affordable financing arrangements and can be taken alongside your existing business loan. Apart from building your dream home, home loans also offer tax benefits under the Income Tax Act, 1961 by allowing you the deductions for interest and principal repayment of your home loan amount. If you are planning to buy your dream house, then start finding out all about home loans and home loan interest rates now!