One of the eligibility criteria that determine how much loan you can avail is your net salary (in-hand salary). Your salary is crucial as it helps in forecasting your repayment capabilities.
Your income will determine the loan amount you are eligible for. Lenders will consider your take-home salary, minus certain common deductions such as gratuity, PF, ESI, etc. The take-home salary will determine the EMI amount you can afford and thus the total loan amount you can borrow.
How to calculate home loan eligibility
For instance, if your take-home salary is Rs. 25,000, you can avail as much as Rs. 18.64 lakh as a loan to purchase a home worth Rs. 40 lakh (provided you have no existing financial obligations.) But if your take home is Rs. 50,000, you can avail a loan amount of Rs. 37.28 Lakh for the same property. Subsequently, if your take-home is Rs. 75,000 you can increase your eligibility up to a loan amount of Rs. 55.93 Lakh.
Net Monthly Income (Rs) | Loan Amount (Rs) |
25,000 | 15.07 lakh |
50,000 | 37.28 lakh |
75,000 | 55.93 lakh |
1,00,000 | 64.59 lakh |
1,25,000 | 80.74 lakh |
1,50,000 | 96.89 lakh |
2,00,000 | 1.37 crore |
3,00,000 | 2.06 crore |
4,00,000 | 2.50 crore |
5,00,000 | 2.50 crore |
Home loan eligibility based on age
Age is another determining factor when it comes to loan tenure. The maximum tenure that you can avail of is up to 40 years.
You will be able to avail of a longer repaymenttenure if you are of a lower age. You can also avail of a home loan of higher value provided you have a high income.
Salaried applicants have to be between the ages of23 years to65 years to apply for a home loan. Self-employed applicants have to be within the age bracket of23 years to70 years to avail one.
**Maximum age considered at the time of loan maturity.
How to check home loan eligibility?
Individuals can easily check their home loan eligibility criteria on the official website of their preferred lending institution. Although most key requirements are usually the same, certain eligibility criteria may differ from lender to lender. These eligibility criteria are basically a set of parameters based on which a lender can assess a borrower’s creditworthiness and past repayment behaviour. It depends on several factors like credit history, age, credit score, financial obligations of an individual along with FOIR and financial status.
Another easier and quick way to determine loan eligibility is to use an online home loan eligibility calculator. One can use this calculator to work out a personalised quote that can possibly meet the loan amount requirement on favourable and affordable means.
How is home loan eligibility calculated?
The eligibility calculator functions on a mathematical formula to evaluate the eligible loan amount. This considers factors such as the loan tenure, monthly income after taxes, any current debt or loan repayments, and any additional income.
What is an eligibility calculator for a home loan?
An easier way to check home loan eligibility is by using an online calculator. The Bajaj Finserv Home Loan Eligibility Calculator instantly computes the amount that you are eligible to borrow. It helps in better financial planning and reducing the chances of application rejection. This tool also eradicates the hassle of manual calculation completely.
With Bajaj Finserv, access this online calculator whenever you need from anywhere and use it for free.
How to increase home loan eligibility?
Here are some ways to increase your home loan eligibility and improve the chances of availing a home loan.
- Improve CIBIL Score:Lending institutions tend to provide home loans at attractive interest rates to individuals who possess an ideal CIBIL Score above 750.Many things affect it, such as credit history, age, credit score, debt, fixed obligations compared to income, and the person's financial status..
- Clear existing loans:Lenders also assess loan repayment capacity by gauging an individual’s debt-to-income ratio. Hence, clearing existing loans before applying for a new one can increase home loan eligibility.
- Select a joint home loan: If an individual applies for a home loan with a co-applicant or spouse who is earning, their eligibility for the credit product will increase.
FAQs
Let's begin by looking at the major factors lenders first consider when they decide whether you qualify for a mortgage. Your income, debt, credit score, assets and property type all play major roles in getting approved for a mortgage.
How do I check my instant loan eligibility? ›
Eligibility criteria for an Instant Loan
- Age:Between 21 and 55 years.
- Salary:Minimum in-hand salary of ₹18,000 in Metro cities and ₹15,000 in Non-metro cities.
- Residence:You must be a resident of India.
KYC documents like Aadhaar Card, PAN Card and Passport along with proof of age and signature are required for availing a Home Loan. Salaried applicants should provide Salary slips and Bank statements while Self-employed individuals need to submit Business stability proof and a Business profile.
How to calculate eligibility for home loan in Excel sheet? ›
How to Calculate How Much You Can Borrow Using Excel
- Enter the monthly interest rate, in decimal format, in cell A1. ...
- Enter the number of payments in cell A2. ...
- Enter the maximum amount you could comfortably afford paying each month in cell A3. ...
- Enter "=PV(A1,A2,A3)" in cell A4 to calculate the maximum amount of the loan.
Lenders look at your income, employment history, savings and monthly debt payments, and other financial obligations to make sure you have the means to comfortably take on a mortgage.
What disqualifies a home loan? ›
Reasons your mortgage application may be denied include a dip in your credit score, increased debt, paperwork errors, a low home appraisal and unverified cash deposits.
How do I calculate how much loan I can get? ›
Your net income will determine the EMI you will be able to pay while meeting your monthly expenditures. Most banks/ lenders decide the loan amount up to 60 times one's monthly salary. So, if you earn your monthly salary is Rs 25,000, you can get a loan amount of Rs 15 lakh approximately.
What is the quickest way to get approved for a loan? ›
Some of the easiest loans to get approved for if you have bad credit include payday loans, no-credit-check loans, and pawnshop loans. Before you apply for an emergency loan to obtain funds quickly, make sure you read the fine print so you know exactly what your costs will be.
How do I make sure my loan is approved? ›
In this article:
- Check Your Credit Score.
- Calculate How Much You Need to Borrow.
- Calculate an Estimated Monthly Payment.
- Get Prequalified With Multiple Lenders.
- Compare All Loan Terms.
- Choose a Lender and Apply.
- Review the Offer and Accept the Loan.
What do lenders generally require? Lenders usually require the PITI (principle, interest, taxes, and insurance), or your housing expenses, to be less than or equal to 25% to 28% of monthly gross income. Lenders call this the “front-end” ratio.
In India, the bare minimum down payment for home loans usually starts at 10% of the property's value. However, this can vary based on the factors mentioned above. Some lenders may require you to make a down payment of up to 20% or even 25% of the property value.
How do I calculate my mortgage eligibility? ›
Lenders look at two ratios when determining how much mortgage you qualify for:
- Gross Debt Service ratio (GDS) — total monthly housing costs shouldn't be more than 39% of your gross household income.
- Total Debt Service ratio (TDS) — total debt load shouldn't be more than 44% of your gross household income.
In determining an applicant's maximum loan amount, lenders consider debt-to-income ratio, credit score, credit history, and financial profile. Government-sponsored, unsecured, and secured loans have different requirements; however, most lenders generally seek borrowers with debt-to-income ratios of 36% or less.
How to calculate maximum borrowing amount? ›
Generally speaking, your borrowing power is calculated as your net income minus your expenses. Your expenses can be impacted by things like the number of dependents in your family, any current home or personal loan repayments and other financial commitments such as private health insurance.
What factors determine loan eligibility? ›
Lenders look at factors like your credit score, income, debt-to-income (DTI) ratio, and collateral to determine your eligibility for a personal loan.
What 4 factors affect the amount of a person's mortgage payment? ›
What Factors Affect Mortgage Payments?
- down payment.
- loan size.
- interest rate – fixed or adjustable.
- repayment term – how long.
- payment schedule – how often.
Mortgage lenders consider factors like a strong credit report, steady income and employment, a savings buffer, an adequate down payment and the ideal loan type.
What determines how much of a home loan I can get? ›
Lenders look at a debt-to-income (DTI) ratio when they consider your application for a mortgage loan. A DTI ratio is your monthly expenses compared to your monthly gross income. Lenders consider monthly housing expenses as a percentage of income and total monthly debt as a percentage of income.
