All You Need to Know About Getting Home Loans for Start-up Employees
Availing a home loan was one of the most difficult tasks for start-up employees or entrepreneurs as compared to their fixed salaried counterparts. But with the recent growth in the number of start-ups across the country, lending institutions have come up with full-scale benefits for start-up employees applying for home loans. However, as a start-up employee trying to avail a home loan, you have to go through a different process from that of an employed individual.
Ensure All Your Business Records are Clean
When lending to entrepreneurs, lenders follow stringent policies, which include demanding a proof of business records of at least three years along with ITR files to check the stability of your income. That’s why you should ensure that all your business records are squeaky clean if you wish to get your home loan approved. A proper documentation of your business means you are at a low risk of defaulting.
The eligibility criteria for self-employed home loan applicants in a broad sense includes a gross annual income of Rs 1,00,000 or above, age between 23 to 58 years as well as three years of continuous business operations.
The documents that are required by lenders to check your eligibility and creditworthiness include, but are not limited to:
- Balance sheet, Profit & Loss Account for the last three years
- Income statement with income Tax Returns for the last three years
- Copy of advance tax payments, if applicable
- A copy of Registration Certificate of the establishment
- Bank statements for last six months of all your current and savings accounts
- Copy of Registration Certificate for deduction of profession tax, if applicable
- ID proof, age proof, address proof
- Copies of investments such as FD certificates, shares, other fixed assets
While these documents are required by all lenders, some may also ask for other documents like copies of previous loans or LIC policies, etc. Your home loan amount is based on your repayment capacity, which will be determined by the lender and your EMI is calculated as per loan amount, rate of interest and the repayment period.
To get the home loan approved, you must have a steady income from your business. Along with that, a proof of your inclination to repay the loan will also make a good impression on the lender, which in return increases the likelihood of your loan getting approved and at good rate of interests. With good record keeping of your business, you can avail home loans at great interest rates.
