Recently, Standard Chartered Bank introduced the interest-only home loan for all existing and new customers. This type of loan significantly helps lower the monthly repayment value for up to 3 years. The best thing about an interest-only home loan is that it considerably helps in boosting cash savings.
The flexible repayment facility of this loan makes it a favourable option for long-term borrowers. Initially, it significantly lowers the monthly outflow, thereby letting the borrowers make more savings. So more savings mean more liquid cash, which you can use for renovation, home improvement, or other requirements.
This article will provide a perceptive overview of who is eligible for acquiring an interest-only home loan. Keep reading until the end to know whether or not you can apply for the same.
What is the Eligibility for Obtaining an Interest-Only Home Loan?
Numerous financial institutions offer interest-only home loans to their existing and new customers. But not all are eligible to be granted the same. So, to get approved for an interest-only home loan, you need to fulfil specific eligibility criteria.
Remember that these criteria are set individually by the financial institutions so that they might vary widely. However, here is a list consisting of all the general factors for determining your eligibility for an interest-only home loan:
- You must be at least 21 years old while applying for an interest-only home loan
- It would be best if you had a stable income
- You must provide documents that work as an income proof
- You need to give the gross valuation of your property
- You must reveal the number of dependents you have
- You need to provide a document stating your existing liabilities (if any)
So irrespective of being self-employed or salaried, you are eligible for an interest-only home loan only after fulfilling these criteria. Standard Chartered Bank offers their customers the outstanding facility of house loan transfer. This option lets you transfer your existing house loan to your desired financial institution.
What are the Documents Required for Acquiring an Interest-Only Home Loan?
Once you know that you are eligible for obtaining an interest-only loan, you will apply for it. But you need to provide numerous documents to prove your validity. Remember that the requisite documents will vary according to your employment status, whether you are salaried or self-employed.
Listed here are some required documents you need to submit if you are self-employed:
- The duly filled application form for an interest-only loan
- Recent passport-size photograph
- Proof of identity including Aadhaar card, PAN card, Voter Identity card, driving licence, etc.
- Proof of business
- Financial statements for the past three years
- Statements determining profit and loss
- Income tax return certificates for the past three years
- Recent bank statements
- A cheque for the processing fee
If you are a salaried professional, you need to submit certain documents, which include:
- The duly filled interest-only loan application form
- Recent passport size photograph
- Proof of address
- Proof of identity
- Recent salary statements
- Recent bank statements
- Employer issued Form 16
- Processing fee cheque
How to Apply for an Interest-Only Home Loan?
Applying for an interest-only home loan is a straightforward procedure. You can either visit the bank’s official website or the nearest branch. You can select the desired product you wish to apply for from the lender’s website if you’re using it online.
Here is a step-by-step view of the application procedure:
- Collecting documents for loan processing
- Bank offering credit appraisal
- Verifying personal and business information
- Delivering sanction letter
- Requesting disbursal
- Collecting property documents
- Evaluating property documents
- Delivering disbursement cheque after successful verification
If you’re above the age of 21 with a stable monthly income, you can only apply for an interest-only home loan. But before applying, make sure you have all the required documents handy. And also, don’t forget to recheck and confirm whether you fulfil all the requisite criteria.