Navigate the Path to Homeownership: Uncover your Home Loan Eligibility



Owning a home is everyone’s dream. However, being able to afford a home is not an easy task. But with home loans, banks and NBFCs have made it possible for an average salaried or self-employed individual to own a house. Since home loans are big-ticket expenses, certain flexibilities are provided to the borrower to repay their loan timely. For instance, the home loan repayment tenor extends up to 40 years.

If a person wants to apply for a home loan and experience a stress-free application process, make sure all documents are ready. Continue reading this blog to gain detailed insight into home loan eligibility.

What are the home loan eligibility criteria?

Home loan eligibility is a predefined set of criteria that financial institutions use for evaluating an applicant’s creditworthiness of repaying their loan on time. Each lender will have its own set of rules; applicants are expected to meet these criteria to experience a hassle-free loan application process. Parameters are set for age, income, bureau score, employment status and value of the property.

The home loan eligibility criteria are easy to meet and hassle-free. Both self-employed and salaried individuals can apply for home loan upon meeting these requirements. Moreover, those with better eligibility can get favourable loan terms.

How is home loan eligibility calculated?

The home loan eligibility calculator is a financial tool that allows anyone to calculate their home loan eligibility. This online tool provides an estimate of the loan amount along with the interest one has to pay. A home loan is an easy and secure way of funding the purchase of a home. Thus, knowing the eligibility allows a person to know how much loan amount they can get from a lender.

Before granting a loan, lenders must check an applicant’s repayment capacity. Accordingly, they implement all home loan eligibility parameters to ensure they are lending a sum of money that the borrower can repay. Proper use of a home loan eligibility calculator will help a person find the required loan amount they are eligible for. Upon finding the loan eligibility, one can calculate the monthly EMIs they need to pay.

How to use the home loan eligibility calculator?

The home loan eligibility calculator will show the maximum loan amount a person can avail considering various eligibility factors. Here is the step-by-step guide to using the home loan eligibility calculator:

Step 1: Enter the date of birth and selected city from the dropdown menu. This city will determine one’s home loan eligibility depending on whether it’s a metro or non-metro city.

Step 2: Enter the value for monthly salary or income

Step 3: Enter fixed expense amount, EMIs outstanding, etc.

Once completing the above home loan verification process, the home loan eligibility calculator will show the maximum home loan amount instantly.

What are the factors affecting home loan eligibility?

Here are the factors on the home loan amount and levied rate of interest:

  • Age

Borrowers have higher chances of availing high-value home loans when they have a younger age. If one avails a home loan when they are of an older age, the repayment tenor will be shorter.

  • Income and employment

If a borrower has a high income, they have the capacity to manage a high-value EMI. One’s employment profile also creates an impact on eligibility. Salaried applicants typically have a higher chance of securing a higher-value loan than self-employed applicants due to their stable income.

  • Credit score

A credit score and report reveal the loan repayment capability of a borrower. if the credit score is high, it is then considered a creditworthy profile. A higher credit score also helps to avail a higher-value loan and lower interest rates.

There are pre-approved offers that several lending institutions offer to existing customers. These offers are available with home loans and loans against property. Borrowers can check their eligibility for such offers on the lender’s official website by providing their names and other essential details.

Before applying for a home loan, one must gather all the necessary information. If a person is new to loans, consulting with a reputable financial advisor is advisable. Discuss the home loan eligibility and understand the requirements to meet. Thus, this proactive approach will help anyone make informed decisions and qualify for home loans easily.

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