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Home Loan Eligibility and Documentation for Startup Employees

Guest Author | 29 Dec, 2016  | Follow Author | Add to my Favourites 
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Startup employees and self-employed people have various options as they plan to apply for a home loan. But the process of home loan approval is quite different from that of a salaried individual. Find out the eligibility criteria and documents required by most lenders to approve home loans for self-employed professionals.


Eligibility criteria


When applying for a home loan, startup employees can get an amount anywhere between Rs. 1,00,000 and Rs. 100,00,000 as per the policies of the lender. Keep in mind that the loan amount is either 60% of the total property cost including the registration fees and the stamp duty or 60% of the property’s market value, whichever is lower. However, this percentage also varies from lender to lender. The actual loan amount is usually determined as per:

  • your age

  • repayment capability

  • assets and liabilities

  • continuity and stability of your income

  • the income of co-applicant, if any

  • number of dependents on you and

  • your saving habits and other factors


Documentation requirements


Self-employed home loan applicants have to present more documents than their salaried counterparts as a proof of their creditworthiness. The documents self-employed business owners have to submit include:

  • Know Your Customer (KYC) documents like photo ID proof, residential proof

  • Copy of Income Tax Returns for last three years

  • A copy of income duty attested by a CA

  • Balance Sheet for the last three years

  • Copy of Profit & Loss Account attested by a CA

  • Profile of your business on your company letterhead

  • Your bank statements of current, savings and O/D accounts for the last 6 months

  • VAT registration copy along with mandatory licenses like Shop and Establishment License, Registration etc.

  • Copy of Memorandum of Associations, Partnership Deed, Articles of Association, if applicable

  • A copy of Details of Contract, if applicable

Self-employed business owners have slightly different documentation required for their loans than self-employed professionals (doctors, CA, architects, lawyers, etc.), who need only the following documents.

  • KYC documents like photo ID proof, residential proof

  • Bank Statement of current and savings accounts for the past three years

  • Copy of Income Tax Returns for last three years

  • A copy of Balance Sheet for last three years, attested copy of Profit & Loss Account

  • Educational qualification certificates

  • A copy of your Professional Practice

  • Salary Certificate, applicable to professionals, i.e. doctors, with a salaried income

You should also keep in mind that original documents are also required for verification of all the copies you have to submit.


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