Individuals who wish to avail of housing finance must have a clear understanding of the eligibility criteria because it can directly impact the quantum of loan sanctioned to them. Regardless of your financial situation, several crucial factors such as age, work and employer profile, monthly salary, etc. prove equally important when establishing your capability in managing a Home Loan. While eligibility is directly proportional to your monthly income, it is not the only consideration.
Home Loan Amount on a Monthly Salary of Rs.50,000
How much Home Loan can I get on Rs.50,000 salary? To answer this question, let us understand what part of your income is considered for computing loan eligibility. Lenders will always check your net salary or in-hand salary in this regard. For example, if Rs.50,000 is your total or gross income, it will include your basic pay and allowances such as travel, medical allowances and the like. On this figure, your employer will make deductions like Provident Fund contributions, Tax Deducted at Source (TDS), professional tax, and more; which you then take home as your net salary.
Let us suppose, you receive Rs. 40,000 as the net salary from a gross income of Rs.50,000. This will qualify you for a housing loan up to 60 times your net monthly salary. In that case, the principal sum you can borrow will be approximately Rs.24 Lakh (60 times of Rs.40,000).
What Is the Maximum Amount of Home Loan That I am Eligible For?
The maximum amount of house loan you may be eligible for is primarily determined by the EMI that you can comfortably repay. It is always recommended that one restricts their instalments to 50% of their monthly earnings. Ideally, for someone with a salary of Rs.50,000, they can apportion up to Rs.25,000 as EMI pay-outs.
If you were to apply for a loan at 8.60%* interest rate for 40 years with no other additional income sources and zero outstanding liabilities, you could obtain a principal amount of about Rs.29 Lakh. However, the actual EMI you pay, and loan principal will vary depending on your lender’s credit risk assessment to determine the interest rates and terms they can offer you.
Using a Home Loan Eligibility Calculator will enable you to accurately assess the loan principal you could be eligible for. You can also access a Home Loan EMI Calculator to review loan viability and customise your EMI outgo. These online tools allow you to effectively plan the housing loan in accordance with your financial goals and fund availability.
Eligibility Criteria for a Home Loan
When you apply for a Home Loan, there are certain conditions that you need to fulfil called the eligibility criteria. These requirements may differ among lending institutions, but it is imperative that you meet them to qualify for the loan. They commonly include as follows:
- Applicants can be resident Indian citizens or NRIs (for salaried individuals) or Indians (resident only) self-employed citizens with credit scores above 750
- Salaried employees should be between 23 and 75 years of age, while self-employed individuals must be between 25 to 70 years old
- Individuals should be employed in the public or private sector, or a multinational firm holding at least three years of work experience
- Self-employed applicants should own a business venture with a vintage of over five years
- Applicants must have minimum earnings of Rs.25,000 per month
Factors That Influence Home Loan Eligibility
Lenders approve Home Loans after considering the below-mentioned factors:
- Credit score
- Age of applicant
- Income and work experience
- Employer and job profile
- Repayment tenor
- Existing liabilities
- Legal and technical valuation of property
How to Apply for a Home Loan on a Salary of Rs.50,000
Individuals can apply for a housing loan with an income of Rs.50,000 in a few easy steps as given here:
- Visit the lender’s official website and fill out the house loan application form
- Enter the required loan amount and all other details as asked
- Submit the application
- After initial approval, you need to provide necessary documentation for the verification process
- Once your application is approved, the lender will issue a loan sanction letter
- Soon after you sign the loan agreement, the money will be transferred to your account
How Can I Improve My Eligibility for a Home Loan on Rs.50,000 Salary?
In certain instances, applicants may find it difficult to secure loan approvals on a Rs.50,000 salary due to various reasons like irregular income, growing age and so on. Some smart tips are elucidated below that can enhance eligibility with timely repayments and good credit habits:
Apply with a Co-Applicant
Applying for a joint home loan increases your chances of obtaining a higher loan amount. It also allows you to share the financial burden whereby both applicants can derive double benefits from separate tax deductions.
Choose a Lengthy Tenor
Opting for a longer tenor reduces the payable EMIs ensuring on-time repayments within one’s monthly budget. However, the interest component adds up raising the overall cost of credit.
Maintain a Good CIBIL Score
Repay your EMIs and credit card dues on time to increase your CIBIL score. Avoid delays or defaults. Try to maintain credit scores over 750 to secure favourable credit terms.
Repay Ongoing Loans
Since financial institutions appraise loan eligibility based on the debt-to-income ratio, prepaying existing loans will improve your credit score and qualify you for a loan.
Include Additional Income Sources
Mentioning all sources of income, such as rental earnings or part-time wages will give you the appropriate debt-to-income ratio enhancing loan eligibility.
Also Read: How to Increase Home Loan Eligibility
