Applying for a Home Loan is one of the most important financial decisions many people make. Hence, knowing how much Loan you are eligible for is essential. Without this information, you risk applying for an amount that could be rejected, delayed, or financially burden you. Tools such as the Loan Against Property eligibility calculator can help you calculate your eligibility before you apply. Let us understand in detail how to calculate your eligibility for a Home Loan.
How do lenders calculate Loan eligibility?
Although each lender may follow slightly different procedures, most base their eligibility calculations on the following core factors:
- Age
Most lenders approve Loan applications only for applicants who are in the age group of 21 to 65 years.
- Income source
It doesn't matter if you are a salaried professional or a business owner. Both are eligible to apply for a Home Loan.
- Credit scores
Credit score is one of the primary aspects lenders check when determining your Home Loan eligibility. Individuals with a credit score of 700 or higher are the best qualified to obtain a Home Loan.
- Loan tenure
A longer tenure reduces the EMI burden, thereby improving your eligibility. However, total interest outgo increases with longer tenures.
- Monthly income
A salaried employee working in cities such as Mumbai or Delhi is expected to earn around Rs. 25,000 per month, and those working in non-metro towns should have a minimum monthly income of Rs. 20,000. Self-employed professionals should meet the minimum yearly income criteria.
Using the Loan Against Property Eligibility Calculator
The Home Loan eligibility calculator is available for free on every financial lender's official website. A calculator gets you a quick estimate of the maximum Loan you may be eligible for based entirely on the information you provide.
- Property market value
Enter the current market value of the property you want to mortgage. The calculator will take this into account when applying the Loan-to-Value ratio.
- Type of property
Select whether the property you wish to purchase is commercial or residential.
- Choose property occupancy
Specify whether the property is self-occupied, rented, or vacant, as this may affect Home Loan eligibility in some cases.
- Enter your net monthly income
This is your income after taxes and deductions. The higher the income, the greater your ability to repay EMIs.
- Existing Monthly EMI
If you are already repaying other Loans, enter the total amount. This helps assess your existing obligations.
- Select Loan tenure
Choose the number of years over which you would like to repay the Loan. Longer tenures reduce EMI but increase interest payable.
- Choose the interest rate
You can adjust the interest rate slider or use the default rate shown in the calculator.
Conclusion
Applying for a Home Loan is easier and more transparent when you know your eligibility beforehand. With tools like the Loan Against Property Eligibility Calculator offered by lenders, you can quickly estimate how much you can borrow and understand your monthly obligations.
