How to Calculate Your Home Loan Eligibility?

​Embarking on the journey to homeownership involves understanding your financial standing, particularly your eligibility for a Home Loan. Lenders assess various factors to determine the loan amount you can qualify for. Here is a guide to help you navigate this process. 

​Key Factors that Influence Home Loan Eligibility 

​The following are some of the factors that are assessed when approving your Home Loan application:  

• ​Income: Your monthly income is one of the key factors that determine your eligibility. Lenders consider your income to assess whether you can manage the EMIs comfortably. Both salaried and self-employed individuals need to provide proof of a stable income. 
• ​Fixed Obligations to Income Ratio (FOIR): This ratio indicates the portion of your income that goes towards repaying the existing debts, such as other loan EMIs or credit card payments. A lower FOIR suggests better repayment capacity, potentially increasing your eligibility.  
• ​Credit Score: A CIBIL score of 750 or above is generally preferred by lenders. This score reflects your creditworthiness and financial discipline and can increase your chances of availing of a Home Loan at a lower interest rate.  
• ​Age: Your age at the time of loan application influences the loan tenor. Younger applicants may be eligible for higher loan amounts and longer tenors, as compared to those nearing retirement.  
• ​Property to be Purchased: The property's market value and its location can influence the loan amount you can avail of. It is important to note that the property to be purchased should have clear legal titles and be free from disputes or encumbrances.  

​Eligibility Criteria of a Home Loan

​Typically, to apply for a Home Loan you need to meet the following requirements: 

​For Salaried Individuals: 

• ​Must be an Indian citizen (including NRIs) 
• ​Age should be between 23 and 67 years** 
• ​Must have a minimum of 3 years** of work experience  

​For Self-Employed Individuals:  

• ​Must be an Indian resident  
• ​Age should be between 23 and 70 years 
• ​Must have at least 3 years of business continuity  

​**The upper age limit is considered as age at the time of loan maturity. Additionally, the upper age limit for applicants is subject to change, depending on the property profile. 

​ ​Using a Home Loan Eligibility Calculator

​To estimate the loan amount you can borrow, you can use online tools such as the Home Loan Eligibility Calculator. Here are the steps to use it: 

1. ​Select the city of your residence. 
2. ​Enter or select your birth date. 
3. ​Enter or use the slider to select your net monthly income.  
4. ​Enter your monthly obligation.  

​After entering the details, the calculator will display the approximate loan amount you can avail of.  

Tips to Increase Your Home Loan Eligibility  

​Here is how you can increase your eligibility for a Home Loan:  

• ​Maintain a Healthy Credit Score: Ensure timely EMI payments, have a balanced credit exposure, and keep your credit utilisation ratio below 30% to build and maintain a good credit score. 
• ​Reduce Existing Debts: Lower your current financial obligations to improve your FOIR by paying off existing debts. 
• ​Include a Financial Co-applicant: Adding a co-applicant with a stable income and good credit score can increase your eligibility.  

​Determining your Home Loan eligibility is an important part of the homebuying journey. By assessing key factors and using a Home Loan Eligibility Calculator, you can make well-informed choices.