Once you have found your dream home, having some financial backup certainly makes things easier. A Home Loan is just the perfect solution in case you do not have sufficient funds or are reluctant to splurge all your savings. Before applying for a housing loan, it is advisable to check your eligibility. Read on to learn what determines Home Loan eligibility and how you check your eligibility instantly before applying for a loan.
What are Home Loan Eligibility Criteria?
Home Loan eligibility criteria refer to a set of parameters based on which any financial institution – banks or NBFCs – evaluates the borrower’s creditworthiness to avail of a Home Loan and repay a certain loan amount. An individual’s eligibility for a housing loan depends on parameters, such as credit history and CIBIL score, age, employment status, and financial obligations.
Factors Affecting Home Loan Eligibility
An individual’s eligibility for a Home Loan is primarily determined based on the following factors:
- Applicant’s Age
This basically concerns how many years of employment you have left to be able to repay the loan amount comfortably. The younger the age, the better the chances. This is because taking a Home Loan at a young age, years before your retirement allows you faster approval and sanction on the desired amount. It further helps lower your EMIs and offers a competitive Home Loan interest rate. - Income
Lenders usually determine a specific income range based on the city you reside in to assess your eligibility for a housing loan. A stable income enhances your chances of getting approved for a Home Loan. - Employment Status
The next big factor determining Home Loan eligibility is your employment status. Working in a public or private sector company or an MNC for 3 years and over projects you as a reliable borrower. If you are self-employed and run a business with over 3 years of demonstrated income, lenders are more inclined towards sanctioning the loan on flexible terms. - Credit Score
Your credit score or CIBIL score reflects your creditworthiness based on your repayment history – the number of existing loans or credit card dues you have, the kind of debt you previously borrowed, etc. The lender can simply assess your financial credibility and repayment capability on the basis of the CIBIL score before sanctioning the loan. On a scale of 300 to 900, a score of 750+ is typically desirable. The higher the score, the more promising are your chances. - Existing Financial Obligations
This is one of the most important factors affecting your Home Loan eligibility as lenders are deeply concerned with unpaid dues. If you frequently miss or delay loan EMIs, the lender may perceive you as someone prone to defaulting on repayments.
Home Loan Eligibility Based on the Value of Property
When applying for a loan, you should know that the lender sanctions the loan amount basis the loan-to-value ratio or LTV. Simply put, LTV refers to the percentage of the property value financial institutions agree to lend you. The remaining cost is to be borne by you. Increasing the LTV raises the perceived risk of the borrower, whereas a reduced LTV ratio can result in more favourable terms, such as lower interest rates on your Home Loan. It depends on the location, age, and evaluation of the property, commercial or residential.
The table below displays the LTV ratio one is eligible for as per the property value:
Value of the Property | LTV Ratio |
---|---|
Below Rs.30 Lakh | 90% |
Rs.30-75 Lakh | 80% |
Above Rs.75 Lakh | 70% |
How Home Loan Eligibility is Calculated?
The following is an example of how Home Loan eligibility is calculated.
Let's say you are earning Rs.1,50,000 per month and have no financial obligations. If you are planning to avail of a Home Loan for 20 years at an interest rate of 8.50%* p.a. then your FOIR or Fixed Obligation to Income Ratio will be:
FOIR = Home loan eligibility = Your monthly savings / (EMI per Lakh x 1 Lakh)
EMI per Lakh for a loan tenure of 20 years at an interest rate of 8.50%* p.a. is Rs.868.
Therefore, Home Loan eligibility = (50% of 1,50,000 – 0) / (868 x 1,00,000) = Rs.86,42,313
So, with a monthly income of Rs.1,50,000, you would be eligible for a maximum loan amount of Rs.86,42,313 at an interest rate of 8.50%* p.a. for a tenure of 20 years.
Calculating Home Loan eligibility manually may cause errors. Instead, to get error-free results instantly, you can use a Home Loan Eligibility Calculator and determine the loan amount you would be eligible for.
How to Increase Your Home Loan Eligibility?
Once you know about the factors affecting your Home Loan eligibility, you can work towards improving it by adopting a few measures before approaching the lender. Here are a few tips to increase your Home Loan eligibility:
- Clear your debts, existing loans, and credit card bills on time to avoid any defaults.
- Keep your debt-to-income ratio low, preferably below 30%.
- Aim for a higher CIBIL score, preferably over 750.
- Review your credit report regularly to look for any errors and fix them at the earliest.
- Declare other income sources, such as investment returns, dividends, and rentals.
- Add your spouse/parents as a financial co-applicant to demonstrate solid financial backup.
- Opt for a longer repayment tenure.
Be sure to use a Home Loan Eligibility Calculator to assess your eligibility before applying for a loan for your dream house.
What is a Home Loan Eligibility Calculator?
A Home Loan eligibility calculator, as the name suggests, is a customised online tool used to calculate an individual’s eligibility for a Home Loan by taking various factors into account, such as your city of residence, date of birth, monthly income, and monthly obligation. It helps you determine how much loan amount you are eligible for.
Steps to Use a Home Loan Eligibility Calculator
You can check your eligibility in a jiffy with the help of a Home Loan Eligibility Calculator. All you have to do is follow the steps mentioned below –
- Access the online calculator on our website.
- Select the city you reside in.
- Enter your date of birth.
-
Provide details about your monthly income and other obligations.
The Home Loan Eligibility Calculator will automatically display the amount best suited for you.
How to Calculate the EMI for Your Home Loan
Talking about manageable EMIs, you can estimate your monthly instalments with the help of a Home Loan EMI Calculator. The online tool is designed to provide you with an estimate on the basis of information, such as principal amount, repayment tenure, and Home Loan interest rate.
The Home Loan EMI Calculator works by the following mathematical formula:
EMI = P x R x (1+R)^N / [(1+R)^N-1],
where P = Principal; R = Rate of interest; N = loan tenure
How to Use an Online Calculator for Home Loan EMI
The steps to use an online calculator for housing loan EMI are simple. All you have to do is:
- Access the online calculator on our website.
- Enter the principal amount followed by the rate of interest and tenure (in years)
The calculator will provide an estimate of the Home Loan EMI in seconds. You can also view the total EMI and total payable amount displayed on the screen. The best part about using a Home Loan EMI Calculator is that you can experiment with various factors to arrive at a suitable EMI value at no cost.
Conclusion
While a housing loan can make for an easier, more convenient financial solution to property purchase, one has to be eligible to enjoy these benefits. Therefore, it is important to know what makes you eligible for the loan and how you can increase your chances of getting it sanctioned without hassles. One of the best ways to determine this is by using an online Home Loan Eligibility Calculator. Nevertheless, you can always discuss your Home Loan eligibility and monthly EMIs with your lender.
DISCLAIMER:
While care is taken to update the information, products, and services included in or available on our website and related platforms/websites, there may be inadvertent errors or delays in updating the information. The material contained in this website and on associated web pages, is for reference and general information purposes, and the details mentioned in the respective product/service document shall prevail in case of any inconsistency. Users should seek professional advice before acting on the basis of the information contained herein. Please take an informed decision with respect to any product or service after going through the relevant product/service document and applicable terms and conditions. Neither Bajaj Housing Finance Limited nor any of its agents/associates/affiliates shall be liable for any act or omission of the Users relying on the information contained on this website and on associated web pages. In case any inconsistencies are observed, please click on contact information.
Trending Articles

[N][T][T][N][T]
Registration of Home Loan Agreement Explained2025-09-10 | 4 min

[N][T][T][N][T]
Practical Tips to Improve Your Home Loan Eligibility2025-09-09 | 3 min

[N][T][T][N][T]
Applying for a Home Loan When Your Salary is Paid in Cash2025-09-09 | 5 min

[N][T][T][N][T]
Rs.90 Lakh Home Loan EMI – A Complete Guide for Homebuyers2025-09-08 | 5 min

[N][T][T][N][T]
Decoding the Right Home Loan Amount for Your Dream Home2025-09-08 | 5 min

[N][T][T][N][T]
What is the Ideal Home Loan Tenure?2025-09-05 | 3 min

cibil Cibil
[N][T][T][N][T]
Impact Of a Co-Applicant’s CIBIL Score On Your Home Loan Application2023-01-20 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Stamp Duty and Registration Charges in Tamil Nadu2025-05-08 | 6 min

home+loan Home Loan
[N][T][T][N][T]
Exploring Square Feet to Centimetre Conversion for Interior Design and Construction2025-03-27 | 2 min

[N][T][T][N][T]
Difference Between Pledge vs. Hypothecation vs. Mortgage2025-09-01 | 4 min

[N][T][T][N][T]
What Does it Mean to Pledge Your Property for a Home Loan?2025-09-01 | 4 min

[N][T][T][N][T]
How to Manage Your Home Loan When Interest Rates Change2025-08-29 | 3 min

[N][T][T][N][T]
Understanding Home Loan Pre-Closure2025-08-29 | 6 min

[N][T][T][N][T]
Factors That Influence Top-up Loan Interest Rates2025-08-29 | 5 min

home+loan Home Loan
[N][T][T][N][T]
How to Pick the Best Home Loan Tenure that Suits Your Budget2023-06-29 | 5 min

home+loan Home Loan
[N][T][T][N][T]
6 Ways to Reduce Your Home Loan Interest2024-03-20 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Home Loan Settlement: What You Need to Know2025-03-13 | 2 min

cibil Cibil
[N][T][T][N][T]
Easy Ways to Maintain a Good Business Credit Score2024-01-10 | 5 min

[N][T][T][N][T]
Plot Loan vs. Home Loan – Understanding the Difference2025-08-18 | 5 min

[N][T][T][N][T]
Home Loan for a Resale Property – Your Complete Guide2025-08-18 | 6 min

[N][T][T][N][T]
Home Loan Basics – A Friendly Guide for First-Time Buyers2025-08-14 | 3 min

[N][T][T][N][T]
Land Loan vs. Home Loan – Understanding the Key Differences2025-08-14 | 2 min

[N][T][T][N][T]
Salary Certificate for Home Loan – Your Complete Guide2025-08-14 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Things to Avoid When Switching Your Home Loan2025-04-02 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Home Loan Transfers: Unlocking Better Rates and Terms2025-05-07 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Understanding Property Valuation for Home Loans in India2025-03-13 | 2 min

[N][T][T][N][T]
NRI vs. Indian Resident Home Loans2025-03-13 | 2 min

home+loan Home Loan
[N][T][T][N][T]
New Home Loan Subsidy Scheme: A Simple Guide for First-Time Homebuyers2025-04-14 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Home Construction Loan Application Guide2025-03-18 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Eligibility Guide for PMAY Urban 2.0: Credit Linked Subsidy Scheme (CLSS) Explained2025-01-13 | 2 min

home+loan Home Loan
[N][T][T][N][T]
How Your Bank Account Statement Affects Your Home Loan Eligibility2025-03-19 | 4 min

[N][T][T][N][T]
Common Mistakes First-Time Homebuyers Should Avoid2025-08-12 | 4 min

[N][T][T][N][T]
Home Loan for Self-Employed: Things to Consider2025-08-08 | 3 min

[N][T][T][N][T]
Understanding Terminology Related to Loan Against Property2025-08-08 | 3 min

[N][T][T][N][T]
Loan-to-Value Ratio – Why It Matters More Than You Think2025-07-31 | 4 min

[N][T][T][N][T]
How to Use a Home Loan for a Home Office Setup?2025-07-30 | 3 min

[N][T][T][N][T]
The Importance of an Encumbrance-Free Title in Home Buying2025-07-30 | 4 min

[N][T][T][N][T]
Smart Ways to Improve Your Home Loan Eligibility2025-07-29 | 2 min

tax Tax
[N][T][T][N][T]
How to Reduce the Loan Against Property Interest Rate?2023-12-11 | 3 min

[N][T][T][N][T]
How Your Profession Affects Your Home Loan Eligibility2025-07-28 | 5 min

[N][T][T][N][T]
Choosing the Right Home Loan Tenure2025-07-28 | 3 min

home+loan Home Loan
[N][T][T][N][T]
How to Know the Survey Number of Land in India2025-04-01 | 2 min

home+loan Home Loan
[N][T][T][N][T]
BBMP: Full Form, History, and Role in Bangalore’s Governance2025-03-20 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Ways to Check RERA Registration Status of Real Estate Projects2025-03-20 | 2 min

[N][T][T][N][T]
Understanding the Effects of Missed EMI on Your Home Loan2025-07-25 | 3 min

[N][T][T][N][T]
Home Loan Tax Benefit for Self-Occupied and Let-Out Property2025-07-23 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Buying a Home: Understanding the 'No EMI till Possession' Scheme2025-03-19 | 2 min

[N][T][T][N][T]
Home Loan Disbursement Process – What Borrowers Should Know2025-07-23 | 4 min

cibil Cibil
[N][T][T][N][T]
Here Is How a Bounced Cheque Can Affect Your CIBIL Score2023-06-06 | 5 min

home+loan Home Loan
[N][T][T][N][T]
A Guide to Applying for DTCP Approval for Patta Land Online2025-01-13 | 6 min

[N][T][T][N][T]
Should You Get Pre-Qualified for a Home Loan Before Buying?2025-07-15 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Stamp Duty in Bihar: Key Documents and Fees Simplified2025-01-16 | 2 min

[N][T][T][N][T]
What is FSI and Why It Matters When Buying Property in India2025-07-11 | 4 min

[N][T][T][N][T]
Is Switching Your Home Loan Lender Midway a Smart Move?2025-07-15 | 4 min

[N][T][T][N][T]
FSI vs. FAR: Understanding the Difference and Why It Matters2025-07-11 | 2 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Bhu Bharati Telangana: Your Guide to Seamless Land Record Management2025-07-11 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Exploring the Impact of Credit Applications on Your CIBIL Score2025-07-08 | 5 min

[N][T][T][N][T]
Understanding the ECN Number in Your CIBIL Report2025-07-08 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
What Is Refinancing a Mortgage and How Does It Work for Property Owners?2025-06-17 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Understanding FMB Sketch Online in Tamil Nadu: A Comprehensive Guide2025-04-14 | 3 min

home+loan Home Loan
[N][T][T][N][T]
CIBIL Score Rules – What Every Home‐Loan Applicant Should Know2025-07-08 | 4 min

home+loan Home Loan
[N][T][T][N][T]
Understanding eNACH Mandates: Meaning, Benefits, and How it Works2025-04-03 | 3 min

[N][T][T][N][T]
Mutation of Property: Meaning, Process, and Importance2025-03-20 | 5 min

home+loan Home Loan
[N][T][T][N][T]
Stamp Duty and Property Registration Charges in Kerala: A Comprehensive Guide2025-04-11 | 2 min

home+loan Home Loan
[N][T][T][N][T]
MCGM Property Tax Mumbai: Online Payment, Calculation, and Exemptions Explained2025-04-14 | 2 min

home+loan Home Loan
[N][T][T][N][T]
Credit Scores and Loan Against Property – What Borrowers Should Know2025-07-07 | 4 min

home+loan Home Loan
[N][T][T][N][T]
What is Patta Chitta and How to Apply for it Online?2025-04-01 | 2 min

loan+against+property Loan Against Property
[N][T][T][N][T]
A Guide to Viewing Jharkhand Land Records Online via JharBhoomi Portal2025-04-01 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Commencement Certificate: Meaning, Role, Requirement and Importance2025-03-06 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
A Guide to Kaveri Online Services Portal for Property Registration in Karnataka2025-04-01 | 3 min

home+loan Home Loan
[N][T][T][N][T]
BanglarBhumi West Bengal Land Records2025-03-04 | 3 min

[N][T][T][N][T]
Removing Credit Enquiries from CIBIL – What You Should Know2025-07-04 | 6 min

[N][T][T][N][T]
4 Steps to Avoid Identity Theft and Credit Fraud2025-07-03 | 4 min

[N][T][T][N][T]
What is a Good CIBIL Score Range and Why Does It Matter?2025-07-03 | 7 min

home+loan Home Loan
[N][T][T][N][T]
How a ‘Settled’ Status Can Affect Your CIBIL Score and Your Home Loan Chances2025-07-03 | 6 min

[N][T][T][N][T]
Understanding the Concept of Freehold Property in India2025-07-02 | 3 min

home+loan Home Loan
[N][T][T][N][T]
Knowing When It's Time to Upgrade Your Home2025-07-02 | 2 min

home+loan Home Loan
[N][T][T][N][T]
House Rent Allowance Under Section 10(13A) of the Income Tax Act2025-03-05 | 3 min

loan+against+property Loan Against Property
[N][T][T][N][T]
Understanding GWMC Property Tax: Payment Methods, Calculation, and Benefits2025-03-13 | 3 min

[N][T][T][N][T]
How Home Loan Rates Are Determined – What You Should Know2025-06-26 | 5 min

[N][T][T][N][T]
Key Benefits of Availing of a Home Loan2025-06-26 | 4 min

[N][T][T][N][T]
How to Use a Prepayment Calculator Effectively?2025-06-26 | 6 min

[N][T][T][N][T]
What is Fractional Homeownership?