Calculate Eligibility for A Home Loan Based on Salary

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Buying or constructing a home is a major step and is perhaps one of the most vital financial decisions. The easy accessibility of home loans makes it viable for individuals to make their dreams of owning a house successful. 

In order to ensure hassle-free and rewarding borrowing, individuals must be well acquainted with the ins and outs of this credit option. First of all one must be well aware of the eligibility norms. Loan borrowers must check home loan eligibility and documentation to receive approval hassle-free.

How is Home Loan Eligibility Calculated Based on One’s Salary?

With the availability of a house loan eligibility calculator, it has become convenient for borrowers to get a measure of the loan amount they can opt for. In the case of salaried individuals, the loan amount they qualify to borrow depends largely on their salary. A stable and higher income status will hint towards the sanction of a lump sum loan amount. 

Borrowers’ eligibility also depends on their age, credit score and other financial obligation. However, lenders consider only the borrower’s in-hand salary after deducting the PF, ESI, gratuity etc. Even the travel and medical allowance are excluded while evaluating salary.

Salaried individuals can gauge their housing loan eligibility by following the steps mentioned below:

  • Visit preferred lender’s official website and click on home loan eligibility calculator.
  • Provide details related to birth date and city of residence. They will also have to mention the PIN code.
  • Proceed by entering net monthly salary, repayment tenor, additional sources of earnings and information related to EMI of other existing loans. Then, click on ‘Submit’ tab.

Borrowers can now view the loan principal that they are eligible to borrow. Furthermore, they can also check all home loan offers. 

Eligibility Criteria for Availing A Home Loan

Home loan eligibility criteria circle mainly around borrowers’ age and income status and differ for salaried and self-employed applicants.

Here are the eligibility parameters that all salaried individuals must adhere to while availing of a home loan:

  • Applicants must be Indian.
  • Salaried individuals must cater to the approximate age group of 23 to 67 years.
  • He or she should have five years of minimum work experience. 

Borrowers must also keep a healthy CIBIL score of 750 and above. It will help them receive quick loan approvals and fetch competitive loan terms. 

Apart from knowing the eligibility criteria, borrowers must also be aware of the list of documents needed for a home loan.

Factors influencing home loan eligibility

The factors that impact home loan eligibility are as follows:

  • Age

Borrower’s age is a significant determiner that affects home loan eligibility. Lenders will limit the repayment tenor to individuals who are nearing the age of retirement. Hence, older applicants will find it difficult to opt for an extended home loan repayment term.

  • Property details

Lenders consider property location and the availability of amenities before approving a loan amount. In case of legal issues, they will reject the borrower’s loan application. In this context, borrowers must know other important reasons why lenders may reject home loan applications. 

Furthermore, parameters like loan-to-value, debt-to-income ratio, income stability, credit score etc., affect home loan eligibility.

Besides gauging eligibility, borrowers must check out the pre-approved offers extended by leading financial institutions. These offers accelerate the home loan application process and are available on housing loans, loans against property etc. Intending borrowers can check their pre-approved offers by submitting their names and contact details.

Home loan eligibility criteria vary from lender to lender and are set to determine borrower’s past financial behaviour and credit worthiness. Hence, it is imperative for borrowers to check home loan eligibility norms of respective lenders before opting for the credit option.

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