Home loan eligibility calculator is an online tool that gives you an estimate of the amount you can borrow under a home loan scheme. Before applying for home loan, knowing the amount you are eligible for helps in planning your finances better and in improving your chances of loan approval, in case of any problem. The calculator provides the results instantly on the basis of your income and repayment capacity, which is assessed after using details like your monthly income, fixed monthly obligations, age, etc. However, the final decision of approving the loan request lies with the bank after considering factors like your credit sore, financial position, etc.
What is Home Loan Eligibility?
By knowing your home loan eligibility, you get to know whether you will be able to get a certain loan amount as per a set of criteria standardised by the lending institution. Failing to meet the eligibility criteria leads to loan rejection and a negative mark on your credit report. To avoid unnecessary hard enquiries and ensure loan approval, customers must check their home loan eligibility before applying for the loan.
What is Home Loan Eligibility Criteria?
Home loan eligibility criteria are the guidelines that a customer must fulfil to apply for a home loan scheme. These factors vary across lenders and also depend on the loan scheme. A common set of housing loan criteria is given below:
|Home Loan Eligibility Criteria|
|Nationality||Indian Residents, Non Indian Residents (NRIs) and Person of Indian Origin (PIOs)|
|Credit Score||550 – 900|
|Age Limit||Minimum – 18 years|
Maximum – 70 years
|Total Work Experience||At least 2 years of work experience is required|
|Business Continuity||At least 3 years of business continuity is required|
|Minimum Salary||Atleast Rs. 25,000 per month, may vary across lenders|
|Loan-to-Value (LTV) Ratio||Up to 90% of property’s value|
- Any salaried or self-employed individual can apply for home loan
- All Indian residents are eligible to avail home loan. Non-Indian Residents (NRIs) and Person of Indian Origin (PIO) are also eligible for certain home loan schemes
- Applicants with good credit score or CIBIL score have higher chances of getting home loan approval
- The Fixed Obligation to Income Ratio (FOIR) is the proportion of your income and existing fixed financial obligations, such as credit card bills and loan EMIs. This ratio should be below 40-50% (after considering the proposed loan’s EMI and other on-going debt payments)
- Your age is also a factor to be considered while assessing the home loan application. To be eligible for availing home loan, your minimum and maximum age should be 18 years and 70 years, respectively. Lenders prefer giving home loan (with tenure of up to 30 years) to younger loan applicants as they have more work-life years compared to someone in their 40s or 50s
- Regular income ensures timely loan payments. Therefore, an applicant with regular income also has higher chances of loan approval than an applicant with seasonal source of income. Your net monthly income should be equal or more than Rs. 25,000 to be eligible for home loan
- Lenders also consider the location and the age of the property. They may reject your loan application if the residual age of property is less or the property does not fall under defined geographical limits
- Your employment status and stability also helps in getting home loan approval. Lenders prefer giving out loans to working individuals with at least 2 years of work experience. And if you have a business, it should be running for at least 3 years
- If you are a salaried professionals, about 40% of your monthly gross income can be considered as your monthly EMI against the loan
- For self-employed individuals, profit earned by you majorly determines the home loan value you are eligible for
Now, that you know the Housing Loan Eligibility Criteria, check out the documents required for home loan.