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How can self-employed individuals maximize their chances of getting a home loan?

Clix June 25, 2018

Mehek is a 36-year-old freelance designer, and now, she believes it’s time to buy a house. Her income is stable and her career is booming — making her confident of handling the financial responsibilities that come with a home loan.
She has been to several banks to apply for a loan, but has been rejected by them all. Why? Only because they are wary of her self-employed status. Traditional banks and NFBCs consider self-employed individuals like Mehek a risk, believing their jobs and income levels are unstable.
It’s a bias that’s hard to shake — so it’s important for self-employed home loan applicants to strictly follow the application protocol to boost their chances. Firstly, make sure you check off the following eligibility criteria^ in advance:

These are the general eligibility conditions, though they may vary by lenders

  • You should be between 21 and 60 years of age
  • Your annual income should be above Rs.1,50,000
  • You need a minimum of 3 years of work experience in your current field

Next, make sure you collate the required documents — double-check if you’re forgetful! Here’s a list you can refer to:

  • The signed application form with a passport-size photograph
  • All documents for KYC (ID proof, address proof, and age proof)
  • A copy of the Income Tax returns for the past two years (attested by a CA)
  • A copy of the company’s Balance Sheet and the Profit & Loss account, if any (attested by a CA)
  • A brief description of the company on the Business Letterhead, if any
  • A bank statement of the past six months for Savings A/C, Current A/C, and Overdraft A/C
  • A copy of the VAT Registration and/or Shop & Establishment License, along with any other relevant documents, if any
  • A copy of the Partnership Deed, MoA, and AoA, if any
  • A copy of Form 16A and/or any Tax Deduction Certificate
  • The details of one’s contract, if required
  • A copy of Advance Tax Paid and/or any Self-Assessment Tax
  • A copy of one’s Education Qualifications and Certificates
  • A copy of one’s Professional Practice Certificate(s), if any
  • A cheque to pay the fee for processing a home loan

Once you’ve checked your eligibility and got the documents in order, there are a few other things you need to keep in mind

  • Most banks and NBFCs tend to group self-employed individuals under two brackets: Self-Employed Professionals (SEP) and Self-Employed Non-Professionals (SENP). Generally, SEPs like doctors, chartered accountants, and architects — to name a few — are favored thanks to a higher level of confidence in their profession and economic stability
  • It’s important for you to position yourself as responsible and non-risky. A larger down payment, significant savings, and a reliable CIBIL score will go a long way in improving your chances of buying that dream home

The good news is that the advent of new-age, tech-driven lenders has made it much easier for self-employed applicants to get home loans — and Clix is one such lender. Getting a home loan is now easier than ever with our streamlined application process.

So, if you’re a self-employed individual like Mehek, all you need to do is keep your documents ready, check your eligibility, and be mindful of the factors we’ve mentioned. We promise, getting a home loan won’t be all that complicated.

T&C Apply. Disbursal of the loan shall be at the sole discretion of Clix Capital Services Private Limited and it’s group companies subject to its policies and execution of such documents as may be necessary.

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