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Home Loan Eligibility Calculator: Check Housing Loan Eligibility

Home Loan Eligibility Calculator: Check Housing Loan Eligibility

Purchasing a dream home is not always a simple task. Sometimes your financial situation prevents you from dreaming big. The Home Loan Calculator is a quick and easy way to determine your loan eligibility. So, what exactly is a Home loan eligibility calculator? The Home Loan Eligibility Calculator is a simple device that can quickly calculate your home loan eligibility.

Always plan your purchases after you have a better understanding of your expenses. Make informed decisions and stay one step ahead by using the home loan eligibility calculator. Once your home loan eligibility has been determined, you can increase your eligibility with careful planning.

Let’s Understand Home Loan Eligibility

Home loan eligibility is a value that a borrower must meet before applying for a home loan. These values differ for each bank and non-banking financial institution and are used to assess borrowers' ability to repay their home loans on time and without default.

Before applying for a home loan, you should be aware of the entire Home Loan eligibility criteria and documents required.

Home Loan Eligibility based on Salary:

One of the primary eligibility factors is your net (in-hand) salary. It computes the loan amount based on your net salary. As a result, your salary is crucial in forecasting your repayment potential. The lenders will look at your gross salary minus a few common deductions such as gratuity, PF, ESI, and so on. The EMI amount you can afford is determined by your take-home pay.

For example, if your take-home salary is Rs. 25,000, you can borrow up to Rs.18.64 lakh for a home worth Rs. 40 lakhs (provided you have no existing financial obligations). If your take-home salary is Rs. 50,000, you can borrow up to Rs.37.28 Lakh for an equivalent property. As a result, if your take-home pay is Rs. 75,000, you will be eligible for a loan of Rs. 55.93 Lakh.

What is Home Loan Eligibility Calculator?

The home loan eligibility calculator is an online tool that determines the amount of home loan that can be obtained. Before applying for a home loan, you should always be aware of your eligibility. The loan eligibility calculator provides instant results after calculating details such as fixed income, obligations, age, and so on. Before approving a home loan, lending institutions consider a variety of other factors such as credit score, financial position, and so on.

How to Calculate:

Several parameters may differ from one lender to the next. A few banks have different parameters to fill out as well. In the calculator, enter the following values:

  • Your current location
  • Date of birth or age
  • Choose your net monthly income.
  • Choose another source of income.
  • Choose the loan term that works best for you.

Some banks may request information about the current EMIs you are currently servicing.

How This Calculator Works:

The calculator is based on a mathematical formula that calculates the eligible loan amount based on a couple of predefined parameters. These considerations include gross monthly income, loan term, existing monthly obligations, and so on. When you enter the necessary information, the calculator returns results instantly.

Factors Affecting Loan Eligibility:

  • Your age - This determines the loan's tenure, which in turn determines your EMI. For a given loan amount and interest rate, the longer the tenure, the lower the EMI, and vice versa.
  • The nature and size of your income - Your monthly income will determine how much of an EMI commitment you can take on. This can determine how much of a surplus you generate after meeting your other financial obligations to repay your loan via EMI.
  • Your prior loan commitments - Your prior financial commitments affect your eligibility because they are deducted as a regular monthly outflow from your existing income, after which some of the EMI set for home loan repayment is calculated.
  • Your credit report - Your credit report assists the lender in determining your repayment health score on other commitments, which becomes a critical criterion for loan approval or rejection.
  • Regulatory guidelines - The NHB has also set limits on the maximum loan amount as a percentage of the house price. This limit varies slightly depending on the cost of the property, with lower-cost homes qualifying for a higher limit and vice versa.

How Can You Increase Your Home Loan Eligibility?

  • Applying jointly: If you include either your earning spouse or a co-applicant in your loan application, your loan eligibility may improve significantly. This is common because the income of the joint applicant will be considered when determining loan eligibility. However, keep in mind that the factors discussed above would also apply to the joint applicant.
  • By repaying other loans: If you have other EMIs to pay, you should consider closing them immediately by pre-paying so that you have a larger surplus to channel towards your home loan EMI. This increases your eligibility.

We hope that this quick primer on eligibility has helped you understand the fundamentals of eligibility. Please use the loan eligibility calculator below as simply as possible to get started on your search for your dream home.

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