Know Your Home Loan Eligibility? Calculate in an Instant!

Know Your Home Loan Eligibility? Calculate in an Instant!

Mumbai, October 19, 2022

You can now afford the house of your dreams with a home loan. Understanding the requirements for your eligibility for a housing loan ensures that the application process will go more smoothly and efficiently for you.

The parameters for home loan eligibility are the same for all banks and non-banking financial institutions (NBFCs). However, check home loan eligibility because depending on each lender's requirements, there might also be particular standards that apply.

What is Home Loan Eligibility?

Housing loan eligibility is outlined as a set of standards based on which a financial institution determines a customer's ability to obtain and repay a specific loan amount. Age, financial situation, credit history, credit score, other financial commitments, and other factors all play a role in deciding eligibility for a home loan.

Home Loan Eligibility Calculator:

You can instantly  estimate the amount of housing loan you are eligible for by the home loan eligibility calculator. The home loan eligibility calculator will make comparing and selecting the best mortgages simple. The procedure is straightforward; you only need to enter the most basic information, such as your name, age, and income.

The home loan eligibility calculator helps to check home loan eligibility based on your income and ability to make payments. Your eligibility is also affected by several other factors, including your age, financial situation, credit history, credit score, other financial obligations, etc.

You can effortlessly apply for a home loan online from the comfort of your living room once you've determined your eligibility and the size of your EMI using the calculator.

Factors That Affect Home Loan Eligibility

1.      Age Limit

When someone applies for a housing loan, this is the primary factor that lenders and financiers consider. Financial institutions typically try to keep the term of a housing loan to the primary applicant's age at retirement. This indicates that young professionals in their 20s and early 30s can easily obtain a loan term of up to 25 years. However, it can be difficult for older applicants, especially those over 50, to qualify for a longer tenure. Single applicants 70 years of age and older have frequently had home loans denied.

2.      Income

Let's divide income into salaried, professional, and self-employed. Whatever category the applicant falls under, they must have a reliable source of income. In general, lending money is more favourable if the applicant is working.

●       Salaried Individual: If employed by a government agency or a legally recognised private company, you fall under this category. Most financial institutions insist that the applicant must have worked for the current company for at least one year before applying. Almost all lenders require pay stubs, Form 16, bank statements, and an employer reference letter. Also needed are proofs from the co-applicant and the guarantor (if applicable).

●       Professionals: For those who work independently, including doctors, dentists, architects, engineers, management consultants, chartered accountants, and other occupations, ITR documents and bank statements must be submitted.

●       Self-Employed: If you run your own business or company or have additional sources of income, such as shares or rented properties? Then you fall into this category. You can apply for a home loan if you have bank statements and tax-related documents to support it.

3.      Interest Rate

The eligibility for home financing is always inversely correlated with the interest rate. Eligibility will be lower if the rate is higher and vice versa.

4.      Loan Term

Your eligibility will increase if you choose a longer term. The EMIs will also be lower and more manageable. The drawback to this, though, is that you'll end up paying more interest.

5.      Outstanding Loan(s)

Indian financial institutions always advise keeping the EMI to Income Ratio between 50 and 60 percent. This is to open a window for potential future loans or, if any, to pay off current loans. Unpaid loans, however, may seriously affect your eligibility.

6.      CIBIL Score Report

The first and largest credit information bureau in the nation, CIBIL (Credit Information Bureau India Limited), is used by financial institutions to evaluate your credit repayment history. They maintain thorough records of all information about your credit history and your interactions with creditors and lenders. A low score may significantly reduce your eligibility.

How can Home Loan Eligibility be improved?

•         By including a family member employed as a co-applicant can increase their eligibility for mortgage loans.

•         Making use of a structured repayment schedule.

•         Ensuring regular savings and investments as well as a steady income flow.

•         Providing information about your regular sources of additional income.

•         Keeping track of the components of your variable salary.

•         Taking steps to address any errors in your credit score.

•         Paying off current loans and short-term obligations

In Conclusion

Lenders check home loan eligibility based on a variety of factors, such as your credit score, repayment capacity, age, income, occupation profile, job stability, employer's profile (for salaried applicants), business turnover (for self-employed applicants), business vintage and profitability (for self-employed applicants), as well as the physical characteristics and location of the property.

Co-applicants now share equal responsibility for loan repayment. Therefore, including a co-applicant increases your loan eligibility and approval prospects. An online home loan eligibility calculator can give you peace of mind knowing all the specifics of your loan.

(Disclaimer: This is branded content. Readers are advised to exercise due diligence and discretion before entering into any correspondence, investment, purchase, business dealings or any other decision on the basis of this content.)

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