Last Updated on January 4, 2023 by Tabraiz
When it comes to applying for a home loan, individuals must be familiar with various details. One such important aspect is to know the total credit amount you are eligible for. It can be easily assessed using a home loan eligibility calculator. Read on to know how to calculate home loan eligibility.
Steps to calculate home loan eligibility
Various financiers feature a housing loan eligibility calculator on their portals. At first, individuals need to lock in on a suitable financial institution that extends funds based in alignment with their needs. Next, they have to follow the steps mentioned below:
Step 1: Visit the official website of your preferred lender.
Step 2: Enter the date of birth and city of residence in the relevant box.
Step 3: Now, individuals need to provide certain data, including net monthly salary, loan repayment tenor, other sources of income, interest rate, EMI, and other loan obligation details.
Step 4: Click on the “Check Eligibility” button. The result will be shown subsequently.
Note that the results, i.e. loan amount figures, shown in the calculator are indicative and can differ from the actual loan amount. Further, lenders may require individuals to fulfil additional eligibility requirements, which also play a crucial role in deciding the loan amount.
Hence, applicants need to know the home loan eligibility criteria to ensure a hassle-free loan approval process. However, as lenders usually set different eligibility criteria based on occupation, borrowers must be aware of these details before applying.
Below is discussed the home loan eligibility criteria for both salaried and self-employed individuals.
Home loan eligibility parameters for salaried applicants
- Salaried applicants must be a citizen residing in India.
- The age of the individual must be between 23 and 62.
- Such applicants must have work experience of a minimum of 3 years.
- They must have a minimum monthly net income of Rs. 25000, differing city-wise.
- The credit score of salaried applicants must be 750 or above.
Home loan eligibility parameters for self-employed applicants
- They must be an Indian resident.
- Their age must range between 25 and 70 years.
- Self-employed individuals must have business experience of at least 4 years.
- Self-employed doctors and chartered accountants must have a minimum of 3 years of experience.
- CIBIL score must be 750 or above.
Please note the eligibility criteria mentioned above criteria are indicative and can vary from one lender to another.
Apart from learning about the eligibility criteria, individuals must know the factors that highly impact housing loan eligibility. These include:
A credit score reflects an applicant’s creditworthiness. Thus, it plays a crucial role in deciding the loan amount. Here, a credit score of 750 or above increases the chance of loan approval.
Moreover, reputed housing finance companies provide high-value home loan to individuals with a high credit score at competitive rates and other benefits.
Some housing finance companies extend pre-approved offers to their existing customer as well. These offers, available on various credits like a home loan and a loan against property, make the loan application process seamless and hassle-free. Individuals can check their pre-approved offer by entering their name and contact details.
The age of the applicant is a key factor in deciding the loan amount and repayment tenor. A younger applicant can easily opt for a longer tenor than an individual nearing retirement. Thus, individuals need to provide their age details while using a home loan eligibility calculator.
Lenders check the debt to income ratio of an applicant to measure their ability to repay the borrowed sum. A lower debt-to-income ratio indicates higher disposable income, which increases the chances of repaying the loan amount timely without any default.
Apart from these, other factors like property details and employment or business stability highly affect home loan eligibility. Equipped with the knowledge of using a homes loan eligibility calculator and essential eligibility parameters, individuals can now easily apply for a loan and buy their dream home.