Home Loan Eligibility Calculator

Housing loans accounted for 11.7% of India's GDP in 2022, and this percentage is projected to reach 13% by 2025. Indian banks and non-banking financial corporations (NBFCs) have launched popular home loan schemes to benefit from this trend. If you wish to invest in buying domestic properties, and have the ability to pay your home loan EMIs, this is the right time to apply for a housing loan.

Before you start applying use a home loan eligibility calculatorto find out if you are qualified for a home loan.

What is home loan eligibility?

Every lender specifies certain specific criteria that the borrowers must meet to be eligible for a housing loan. It could be a potential risk for banks and NBFCs to sanction your loans, so they want to ensure that you can pay the loan back on time.

To successfully get a loan, you must confirm your eligibility before sending your home loan application to the lending institution. You can check your home loan eligibility by using a home loan eligibility calculatorto assess your eligibility.

What is a home loan eligibility calculator?

A housing loan eligibility calculator is a tool that helps you calculate home loan eligibility online. Besides determining your eligibility online, you can download an Excel format of the home loan eligibility calculator.

How does a home loan eligibility calculator work?

Lenders decide the home loan eligibility of a borrower based on their monthly income, existing obligations, credit score, and age. A home loan amount eligibility calculator uses the same factors to determine your eligibility for a home loan.

The home loan eligibility calculator will match the inputs that you will provide with the criteria specified by the lender to assess your eligibility. A home loan top-up eligibility calculator will determine your eligibility for a top-up loan. A top-up loan is like an extension of the existing home loan.

The formula for home loan eligibility calculator?

There is no specific mathematical formula to determine housing loan eligibility. A home equity loan eligibility calculatorcomparespre-decided parameters like income and age with the criteria decided by the lenders.

How to use home loan eligibility calculators?

Follow the below steps to use the home loan calculator and eligibility checker tool.

Step 1: Select your city from the drop-down list and enter your date of birth in the home loan EMI eligibility calculator.

Step 2: Enter your monthly income and existing monthly obligations like EMIs for other loans.

Step 3: Click on 'Submit'.

Soon, the calculator will provide you with an assessment regarding your qualification for the home loan that you applied for.

Benefits of using a home loan eligibility calculator?

Here are some major advantages of using a top-up home loan eligibility calculator.

Free of Cost

A top-up home loan eligibility calculator allows you to calculate your home loan eligibility online for free.

Easy to use

To use the home loan eligibility calculator, you need to enter basic details about yourself and your income to check home loan eligibility. The home loan eligibility calculator in Indiais very easy to use. You will need basic knowledge to operate a computer to calculate your eligibility.

Prevents loan rejections

Home loan applications that do not meet the eligibility criteria are likely to be rejected. Loan rejections can have a negative impact on your credit profile. If you do not meet the eligibility criteria, an instant home loan eligibility calculator can warn you in advance, avoiding a loan rejection.

How is home loan eligibility calculated?

Home loan eligibility is calculated based on a person's age, income, and existing debt obligations. The applicant's credit history, credit score, and remaining working years are also considered while checking the eligibility. Refer to the below table to get an idea of how to calculate home loan eligibility. These factors may change according to the type of loan selected and the lender. Let us have a look at how to calculate home loan eligibility for self-employedand salaried people.

Apart from the factors mentioned in the table, loan eligibility also depends on credit scores, credit history, etc.

Home loan eligibility criteria based on age

Age is an important factor that lenders consider while checking housing loan eligibility. As a general rule, the borrower's age must be between 24 and 70 years at the time of completion of the loan. For example, if you are 55 years old and apply for a loan with a tenure of 20 years, you will not pass the housing loan eligibility criteria as your age would be above 70 at completion.

How to enhance home loan eligibility?

Once you learn how to calculate home loan eligibility, you can focus on enhancing it to get a suitable loan. Here are some steps to increase the chances of your application getting accepted:

• Apply for a joint home loan with an earning family member as your co-applicant. You may use a joint home loan eligibility calculator to confirm eligibility.
• Reduce your existing financial obligations such as EMIs and credit card dues.
• Improve your credit score by taking corrective action.
• Apply for a home loan with a longer tenure to reduce the EMI amount. You must note that your interest will also increase with the duration.

Apply for a home loan and calculate your eligibility

As a home loan applicant, you must be aware of the eligibility for your home loan before you submit the application. This will help you identify possible reasons for rejection prior to your lending institution's response. It will provide you with an opportunity to improve the likelihood of getting your loan approved.

It is possible to check the home loan eligibility using a home loan eligibility calculator online. There is no need to make any payment for using this calculator.

What factors determine your home loan eligibility?

Lenders outline specific factors before approving a home loan application. Below we discuss some of the key factors that could affect your eligibility for a home loan.

Age

Home loans generally have longer durations of around 10 to 20 years. The maximum tenure of a home loan offered by Shriram Housing Finance is 25 years. Due to the longer duration, the age of the applicant becomes a crucial part of the eligibility criteria. You must be between 24 and 70 years of age at the time of completion of your loan.

Income

Lenders calculate home loan eligibility based on the salary or professional income of the applicant. They want to ensure that the borrower has the financial ability to pay the EMI amount on time. Most lenders prescribe a minimum monthly income that the applicant must have. You can use a home loan eligibility calculator as per salary to check if you fulfill the income criteria.

Fixed obligations to income ratio (FOIR)

The fixed obligations to income ratio (FOIR) is the ratio of the fixed obligations like EMIs of the borrower to their monthly income. A lower FOIR is considered favorable by the lenders.

Credit history and credit score

Lenders check the applicant's credit history and score from the Credit Information Bureau (India) Limited (CIBIL™) before approving the loan. Generally, a CIBIL™ score of 750 and above is considered favorable.

You must learn how to calculate home loan eligibility based on salary and other factors listed above to ensure that your loan gets approved.

What are the documents required for a home loan?

Applicants should keep the following documents ready after checking home loan eligibility with NBFCs and banks.

• Proof of identification such as a driver's license, Aadhar card, ration card, passport, voter's ID, etc.
• Proof of age such as the 10th class mark sheet, bank passbook, passport, or driving license as proof of age.
• Address proof documents like bank passbooks, voter's ID, ration card, passport, utility bills (less than 2 months old), and LIC policy documents can be submitted as proof of address.
• Income proof like Form 16, salary pay slip, investment proof, or income tax (IT) returns from 3 previous years may be submitted. Self-employed borrowers may have to submit a letter from their chartered account (CA) or other documents.
• Property documents such as the sale deed, tax payment receipts, and an approved copy of the building plan can be submitted to the lender.

How to improve your home loan eligibility?

Learn how to calculate eligible home loan amounts and then try to improve your eligibility for a home loan. Here are some helpful tips:

Improve your credit score

Make sure that your CIBIL™ score is above 750 before applying for a housing loan. You can improve it by paying off your current dues, paying utility bills on time, and using credit within your permissible limit.

Apply for a joint loan

Apply for a joint house loan with your spouse or another family member. However, ensure that the joint-owner is an earning applicant.

Clear existing loans

As discussed above, lenders look for a low FOIR in an application. Once you clear existing loans, your FOIR will automatically reduce.

The list of factors that determine home loan eligibility

Before you make an application, below is a checklist of factors that play a crucial role in approving your loan:

• Age of the applicant
• Income of the applicant
• Amount of existing loans in the name of the applicant
• CIBIL™ score
• Fixed Obligations to Income Ratio (FOIR)

Wrapping up

Calculate home loan eligibility within seconds using the home loan eligibility calculator by Shriram Finance. Learn how to calculate home loan eligibility in India and avoid facing loan rejections with a housing loan eligibility calculator.