Banks and NBFCs when deciding the eligibility of an applicant considers multiple factors. As a result, to provide proper help we have straightened out the home loan application eligibility criteria. And have put more focus on all the common parameters that are mandatory while applying for a home loan. Using a home loan eligibility calculator is indeed the easiest way to determine eligibility for a home loan. One can simply set the values or inputs to those fields and check the eligibility for a home loan without any difficulty. This will avail buyers in making a novel choice and assist in avoiding loan application rejections.
What is home loan eligibility?
Lenders set home loan eligibility, which is a set of requirements, to ensure loan repayment. Applicants have to fulfil the requirements of eligibility criteria to get a home loan approved in real-time. Home loan eligibility criteria include age, financial position credit, history, credit score, other financial obligations, etc. If you are not able to meet the eligibility criteria the loan application will get rejected causing a negative impact on your profile.
How to calculate home loan eligibility?
As we have already discussed, there are a variety of factors in deciding upon home loan eligibility. Here we have tried to discuss those in detail and make sure that you have your concepts cleared out before applying for one.
Eligibility criteria for a home loan
As we already know that there are various factors on which home loan eligibility criteria are based. For instance, your salary, present age, credit score, location, total work experience. To understand the criteria of home loans comprehensively the details are listed below.
- Current Age: This is the prime factor that determines home loan eligibility. The maximum loan tenure of a home loan is 30 years. Your age must be in between 21 to 65 years if you are a salaried individual or a businessman.
- Maximum Loan Term: 30 years.
- Minimum Salary: To apply for a home loan, you need to have a minimum salary of 10,000 per month.
- Financial Position: The income plays a salient role in sanctioning the loan. Your minimum business income must be within ₹2 lakh p.a.
- Credit Repayment History and CIBIL Score: A good credit score reflects a positive impact and shows creditworthiness.
- Other Financial Compulsions: This category represents any outstanding debt, credit or a regular payment, etc.
Also Read: The Real Face of Personal Loan
Home loan eligibility calculator
Once done with the criteria part you can start calculating your EMIs and the loan amount. As unnecessary burdens are a big hazard to your overall financial profile
A home loan eligibility calculator helps in determining whether you are eligible for borrowing a home loan or not. All you need to do is put in the tenure, loan amount, property location, salary/annual income and the lender will provide you with a preferable EMI amount, accordingly. By computing the amount you can easily plan your financials further and avoid chances of rejection.
Factors affecting eligibility criteria: In detail
As now we are done with the eligibility criteria and calculation part, let’s have a look at the factors which possibly affect your loan amount and approval process while applying, in detail.
Salaried and self-employed are the two categories. In general, if you are earning individually there is less risk of loan sanction.
Chartered Accountants, Doctors, Archeologists, Management consultants, Architects, Doctors, Scientists, etc. comes under this category. Bank statements and ITR documents are mandatory to submit.
- Salaried Applicant- If you are in an administration dept or at any privatised organisation (registered), you are from this category. Many banks prefer at least 1 year before completion in the current branch while applying. Do provide Form16, payslip and employer referral letter.
- Self-employed– If you are a freelancer, then you will have to provide tax papers and bank statements while applying for a home loan.
CIBIL score report:
A good credit score assists in increasing your chances to get particular loan approval. Therefore, maintaining a good credit score shows your creditworthiness to the bank. Hence, it ascertains the loan repayment.
Usually, financial institutions limit the house loan tenure to the primary applicant’s age of superannuation. The age of a borrower represents the term for a loan application. If you as a borrower are willing to pay a small EMI then you can have an extended repayment schedule. This will decrease the burden to repay a large amount and will make it easier to repay the loan without defaulting.
A housing loan eligibility calculator is a simple and easy way to determine eligibility for a home loan without any hassle. One can use it to work out a personalised quote that can meet the loan requirement. Also, make sure to abide by the criteria mentioned here and start on a seamless journey of acquiring your dream home.