How to Calculate your Home Loan Eligibility?

Home Loan Eligibility
Home Loan Eligibility

In recent times, the introduction of digital tools has helped to streamline an individual’s credit application process to quite an extent. From calculate your home loan eligibility and one’s EMIs to learning about the amount he/she is eligible to avail, individuals can make use of online calculators to facilitate an easy loan application process at the very outset.

In this regard, a housing loan eligibility calculator is one of the most conducive calculators vastly used by individuals to gauge the housing credit amount they are eligible to borrow before applying for a home loan.

Calculate Your Home loan Eligibility By Make Use Of A Calculator

Calculate Your Home loan Eligibility By Make Use Of A Calculator
Home loan eligibility calculator

An individual’s eligibility decides his/her creditworthiness to avail a home loan and repays it within a stipulated tenor. The home loan eligibility calculator determines an applicant’s eligibility based on his/her age, monthly income, rate of interest, and other existing debts. 

After calculating their eligibility, you can also calculate your home loan eligibility by using an EMI calculator to understand the monthly liability they will need to bear against the sanctioned home loan.

Calculate your home loan eligibility online

Prospective borrowers can follow the steps below to calculate their home loan eligibility –

  • Calculate your home loan eligibility online by a calculator, enter the date of birth and city
  • Input the loan tenor 
  • Enter the monthly salary and any other income 
  • Input other EMIs, if any, 

A home loan calculator will compute the amount that you can borrow.

Factors affecting home loan eligibility

Factors affecting home loan eligibility 
Factors affecting home loan eligibility

It is essential to calculate your home loan eligibility criteria to make the entire home loan process easier and quicker. 

 

  • Applicant’s age-

 

The age of an applicant decides what the tenor of a loan will be. As home loans are secured long-term loans stretching up to 30 years, many lenders take the age of retirement as the maximum limit. A longer tenor equals lower EMI and vice-versa. 

 

  • Credit Score or CIBIL score –

 

It is one of the most crucial factors in determining whether a borrower is eligible for a home loan or not. A credit score above 750 is ideal for home loan approval, considering other criteria are fulfilled. A credit score below 750 is deemed poor and may even lead to the rejection of a home loan. 

It not only decides the approval or rejection of a home loan application but a good credit score also determines the EMIs.

  • Debt-to-income ratio – 

Calculate your home loan eligibility depends on an individual’s present financial liabilities concerning his/her salary. The percentage of current financial liabilities should never exceed 50% of that his/her income. A higher debt-to-income ratio denotes that a significant portion of the salary will be used to meet the existing loans that increase the chance of default repayments. In such a scenario, lenders may reject the home loan application.

 

  • Employment nature and stability –  

 

Many lenders specify the employment tenor for salaried individuals to at least 2 years of the total working experience to be eligible for a home loan process. Likewise, for self-employed individuals, the business should at least be 3 years old. 

 

  • Property details –

 

The chosen property’s age and location are other criteria for approving or rejecting a home loan. The loan can be canceled if a property is not under the lender’s defined geographical limits. 

 

  • Loan to value and property value –

 

According to the RBI’s guidelines, the LTV ratio for a home loan eligibility cannot be more than 90% of the property value. This implies that a borrower will have to make a certain amount of down payment to purchase the home. 

In this regard, you can also calculate your home loan eligibility by make use of an EMI calculator to compute how much their monthly installments will be to settle the amount they avail under this advance.

Home loan borrowers can also look for pre-approved offers provided by reputed non-banking housing finance companies to expedite the home loan application process. Such offers are available on several financial products such as home loans, loans against property, and more. One can check their pre-approved offer by inputting their name and contact information.

Almost every lender or non-banking financial institution offers to calculate your home loan eligibility by make use of a calculator. Home loan applicants must compare multiple lenders before making any final decision. 

 

Pooja Sharma

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