Things to Consider Before You Apply for a Home Loan

Buying property is a huge step, and many have to wait for years before they can buy their first home. This is often because individuals believe that getting a home loan is a cumbersome process. However, with assistance from the right source, it can be simple and convenient to receive a loan—be it for personal or investment purposes.  

To ensure a smooth sanction, it’s necessary to put an effective strategy in place by weighing every option and taking all factors into play. This article discusses everything one needs to consider before they apply for Home Loan


This is one of the most important factors to consider when looking for loans. While purchasing property with a high value, buyers often opt for large loan amounts. However, a large loan also means higher EMI rates which may be unfeasible for many. No loan should affect the day-to-day expenses of an individual nor come in the way of any emergency expenditure. Therefore, buyers must ensure that they can afford not only the house but also the loan. 

Financial standing 

The financial standing of a person directly impacts their chances of getting the loan amount they wish for. It is also a measure of one’s creditworthiness—a standard used by lenders to determine whether an individual is a high-risk or a low-risk borrower. A good way to calculate the financial standing of a person is by checking their credit score. Credit scores are a display of how responsibly an individual handles their finances. A higher score indicates good creditworthiness, and a poor score indicates low creditworthiness. Therefore, depending on where an individual stands in terms of finances, they can apply for Home Loan. 

Appropriate EMI and Tenure 

Many financial institutions and banks provide flexible EMI options for individuals to choose from according to their convenience. Online EMI calculators can help in calculating EMIs, and borrowers can determine the amount they are most comfortable with based on the results. To ensure that monthly EMI payments are feasible, it’s recommended not to choose an EMI that is more than 45% percent of an individual’s income. 


EMI rates and tenure correlate to one another. A shorter tenure signifies a higher housing loan interest rate, and a longer tenure signifies a lesser EMI amount. While the latter may seem like a good option, it’s important to note that longer tenures ultimately lead to a higher repayment due to the accumulation of interests. Moreover, opting for shorter tenures also makes borrowers eligible for availing desirable interest rates. Therefore, individuals should set their budgets by following these factors. 


Eligibility plays a vital factor in the process of receiving a loan. The criteria usually vary from lender to lender, with most banks drawing the monthly mark at a housing loan interest rate of 50% of an individual’s income. Factors such as debts and pending loans also adversely affect eligibility. Most lenders examine the financial records of an individual before granting a loan, and it’s, therefore, advisable to keep records updated and pay off pending debts before applying for a home loan. 


Since home loans are usually quite hefty, there are a lot of documents that need to be provided to become eligible for them. Not being appropriately prepared can lead to rejection and disappointment, and therefore it’s important to keep the following documents in hand before applying for a loan:

  • A fully filed Income Tax Returns record of recent years 
  • PAN card
  • Aadhar card
  • Bank statement displaying income and expenses of the past year
  • 3 recent salary records for salaried employees
  • A signed application form with a passport size photograph of the borrower

A home loan is a serious affair, and individuals must consider every step carefully before making their decision. While the procedure may seem tedious, with help from the right lender, getting approval for a home loan can become a cakewalk. 

With its vast range of benefits, PNB Housing makes home loans highly accessible and convenient for all. Not only does it offer loans for various purposes such as home purchase loans, home construction loans, plot loans, and more, but it also comes equipped with a team of experts and diverse options for repayment. PNB Housing makes the process completely effortless, and individuals can enjoy their dream home without lifting a finger.