A Guide to Understand Home Loan Tenure and Age Limit


hardik, March 31, 2017

A Guide to Understand Home Loan Tenure and Age Limit


Want to avoid home loan rejection? Make sure you check these home loan age and tenure requirements of lending institutions carefully and apply only for a loan that matches your profile and budget.

Home Loan Age

Age plays an important role in determining your home loan eligibility. Different lenders may have different minimum home loan age requirements. However, you have to be at least 21 years of age to apply for a home loan.

If you have applied for a home loan after your retirement, the lender might refuse to sanction your loan since the chances of defaulting are higher due to the lack of a regular income. Most lenders consider 58 to be the retirement age from active service. So if you are older than 50, your home loan application may be rejected.

If you are applying for a joint home loan, the lender will calculate the tenure on the basis of the age of the older borrower. So, if your age is 30 and your co-applicant’s age is more than 50 years, a lender can reject your application. Your age also has a say in the tenure and EMI of your home loan. The younger your age, the higher is the tenure available to you on a home loan.

Suppose you are 38, and retire at 58, and have applied for a home loan with a tenure of 25 years. The lender might offer you a home loan with a shorter repayment period of 20 years that will end shortly before you retire, and calculate your EMI accordingly.

What is the Best Age to Take a Home Loan?

Are you looking for finance to buy your dream home and want to know the right age for home loans? The ideal age to go for a home loan is 30 to 35 years. It also helps if you are younger, because then you can also opt for an extension on your home loan tenure. If you are aged above 40, you may still get a home loan. However, in such a scenario, your home loan eligibility is reduced, and you have to show higher earnings to a lender.

Home Loan Tenure

The shorter the home loan tenure you opt for, the higher your chances of getting the loan approved. Lenders usually give the highest marks to borrowers who opt for a repayment period of up to five years. Further down the line come those borrowers who choose a home loan tenure between 10 and 15 years. Borrowers who go for a home loan term of 15 to 20 years get the lowest scores. Therefore, the next time, try to shorten your home loan tenure if approval becomes difficult.

Additional Read: First Time Home Buyer Tips

Case Study:

Gagan Menon, a web developer employed with an MNC in Hyderabad, had been on the lookout for his dream house for a long time. When he finally found the home that he really liked, he didn’t waste time in paying the booking amount. The next thing on his to-do list was to arrange finance for buying the property. He decided to apply for a home loan, thinking that he would get the funds in no time. However, the loan application procedure was not as easy as he had expected. Even after he had completed the lengthy and complicated process, to his surprise, his loan application was rejected.

The bank told Menon that his age—he was 43 years old—and the long loan tenure he had applied for made him ineligible for the home loan. He had to approach several other lenders for a home loan. After extensive paperwork and rigorous scrutiny, one lender approved his home loan application, but the amount was about 20% lower than what he had applied for. He also had to make do with a shorter loan tenure.

Like Menon, there are many people who do not know that age and loan tenure can affect home loan eligibility. While different lenders have different scoring models.

Bajaj Finserv Homes and Loans offers home loans starting from Rs.30 lakh onwards. You should be an Indian resident and a salaried individual, aged between 25 and 62 years, with a work experience of three years or more.