Self-Employed And Want To Own A Home? Here Is Your Checklist For Getting #HomeLoan!

Owning a home for self-employed is not easy. But where there is a will, there is a way!

Home loan for the self-employed
Home loan for the self-employed

Talk with any insider from housing finance company or HFC, and you will get this information: Self-employed segment is labeled as high risk category.

The primary reason being that traditional HFCs are not able to determine the loan repayment capability of the self-employed, as this category of loan seekers have low credit penetration.

And this results in a wide gap between demand and supply, as a large portion of housing demand is generated from self-employed segment.

However, thanks to new-age and disruptive housing finance companies like PNB Housing, this is changing at a rapid pace.

Self-employed segment is now getting home loans, as the contemporary housing finance companies have devised ways to determine the financial standing of the self-employed customer through customized income eligibility program. As loan repayment capability as being the core issue is addressed, approval of home loan becomes seamless for self-employed.

Here is the checklist from a typical new-age, and flexible housing finance company, for approving home loan for self-employed:


Credit History

Before any form of loan, the credit history of the applicant is always checked. When it comes to home loan for the self-employed, credit history of the applicant forms the foundation for loan approval. Those with higher down-payment on home buying, adequate savings and good credit score have higher chance of loan approval.


If you are self-employed, then pay the credit card bills, EMIs on time, and build a stellar credit history, because only this will actually reveal your loan repayment capacity.


Your total earnings in financial year is the most important criteria for housing finance companies, when it comes to home loan approval. Whether you are a salaried person or self-employed, you will need to submit proofs of your earnings to let them asses your loan repayment capability.


If you are self-employed, then always keep your profit and loss accounts, account statements, balance sheet and ITR filings ready, which indicates your core income. Housing finance companies now evaluate the income from multiple sources, which helps them gauge true eligibility of the individual. It is advisable to do all your transactions through banking system. Rentals from property etc. will be considered as non-core income.

Property Appraisal

Ironically, this is one over-looked criteria by the self-employed, and lack of knowledge can lead to rejection by financial institution. While analysing the income and credit history of the applicant, the HFC also appraises the property which is being sought. In case there are any issues like litigation, title chain not available or proper etc., then the application of home loan can be rejected.


Choose your property wisely, and always do a due check on the history of that property. Consult real estate experts, and make sure that the property is free of any encumbrances. Best is to look for a pre-approved property which has already undergone verification. Also, few housing finance companies like PNB Housing offers property services and can help in identifying property as per your liking and budget.

Existing Loans

In case the self-employed applicant has an existing loan, the HFC will determine the EMI-to-income ratio after considering the existing loan and its installments. This is another important factor, as the installment of the home loan will be affected by the EMI-to-Income ratio of the applicant.


Try to keep the EMI-to-Income ratio between 50-60%, as anything more than that will set the alarm bells for the HFCs. It is pretty obvious: In case you are spending more than 50% of your income on an existing loan, how will you repay the new loan? Hence, choose a ratio which leaves you with enough cashflow for other expenditures.

Payment Tenure

Now, this is an interesting factor, because for self-employed people, this can change everything.

Normally, a typical HFC will set the EMIs for 20+ years for the home loan, and is generally a fixed amount. However, depending upon which HFC you choose, this can be a game-changer, especially for the self-employed.


PNB Housing has introduced a very beneficial feature for self-employed regarding the tenure of home loan.

A special customization, termed as ‘step up facility’ can be done wherein the home loan EMIs start with low amount and then increase with time as the business grows. This helps the businessmen to lessen the burden of EMIs in the initial years, and rather focus on the business to make it successful.

Govt. schemes such as Startup India, Digital India and Make in India have considerably helped to improve the image and perception of self-employed segment.  Housing finance companies are customizing their offerings to service this category in a convenient and easy fashiom.

HFCs such as PNB Housing not only provides home loan for purchasing a new home, but also for purchasing an under-construction home, resale/re-purchase of house, renovation of an existing house and even construction of home on a plot of land.

If you are a self-employed, and want to get home loan approved, then this is the best time!

Do you have any questions or enquiries regarding home loans? Do let us know right here!

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