Do you know your Home Loan Eligibility?
Investing in building or buying a house in India is an expensive affair. Therefore, one has to opt for a housing loan scheme to meet the substantial expenses involved. However, with the repo rate remaining at 4%, home loan interest rates are unlikely to alter. Thus, availing of required funds for building or buying a house is expected to remain affordable.
Nonetheless, a prospective homebuyer must qualify for the home loan eligibility criteria and documentation process to secure this financial product. In this regard, an eligibility calculator can be handy.
What is the Home Loan Eligibility Parameters?
Several lending institutions have set a list of eligibility criteria based on which lenders determine the creditworthiness of an applicant. These criteria evaluate the repayment capacity of a borrower on time without defaults. The parameters are-
- Applicants must be 23 to 62 years old (for salaried individuals)
- Borrowers must be 25 to 70 years old (for self-employed individuals)
- CIBIL score should be 750 and above
- Applicants must have a minimum work experience of 3 years (for salaried individuals)
- Self-employed individuals must have a business vintage of a minimum of 5 years or more
- All applicants must be residing Indian citizens
This list of criteria may vary from lender to lender.
How is home loan eligibility calculated?
The eligibility calculator works on a mathematical formula to compute the eligible loan amount. The factors that impact loan amount are loan tenor, net monthly salary, and more.
Nevertheless, reputed financiers offer online housing loan eligibility calculator to help borrowers work out customized quotes based on their repayment capacity.
How to check home loan eligibility online?
Potential borrowers will have to follow the below-mentioned step-by-step guidance to calculate their eligibility instantly-
- Visit the official website of a popular lending institution
- Navigate to the online eligibility calculator option
- Enter date of birth and city of residence
Next, one has to set a value of the following parameters on the online home loan eligibility calculator. They are-
- Net monthly income or salary
- Loan repayment tenor
- Additional income sources (if any)
- EMIs or other existing obligations
After setting these values, an estimated loan amount will appear on the screen.
Note: Prospective applicants should compare different home loan options to make an informed choice.
Renowned financial institutions extend simplified loan application options with pre-approved offers. To check pre-approved offers online, prospective applicants need to provide their names with their contact numbers.
Factors affecting home loan eligibility
There are 6 factors that affect home loan eligibility. They are-
- Credit score
Anything below 750 lowers the chances of securing home loans against affordable interest rates and flexible repayment tenor.
- Existing debt obligations
Unpaid dues affect the eligibility as well as the interest rate. Therefore, applicants should repay their existing EMIs to ensure a higher loan amount against convenient terms.
- Income capacity
Lenders evaluate the loan amount based on the net income or salary of a borrower. However, the sanctioned loan amount of a self-employed individual may differ from a salaried individual.
- Age of the applicant
Another factor that impacts applicants’ home loan eligibility is their age. For instance, securing a housing loan process before 10 years of retirement or during the early stage of a career allows speedy approvals.
- Property details and LTV ratio
Being a secured loan, lenders evaluate the location of the property before sanctioning the amount. For instance, if the property is in a metropolitan city, lenders approve loans instantly. Another factor is the LTV ratio. Lenders also consider how much down payment a borrower can make. Based on that, they determine their eligibility.
- Status of employment
Applicants associated with MNCs or reputed private or public-sector organisations are deemed more reliable than applicants with unstable jobs. Besides, if the applicant has a stable business income, lenders are likely to sanction the loan amount readily.
Borrowers can also improve their home loan eligibility by applying for the product jointly and pre-paying other obligations immediately.
Additionally, individuals can also opt for lenders extending pre-approved offers for faster loan processing. These offers streamline this application process and save time. Such offers are applicable on financial products like loans against property, home loans, etc. Intending borrowers can check their pre-approved offers by submitting their essential contact details.
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