0
0
Financial institutions will decide whether to give you a home loan or not by calculating your creditworthiness depending on different housing loan eligibility criteria. So, if you are planning to avail a home loan, you can also calculate it yourself using an online calculator. The score will depend on your financial position, age, credit history, debt obligation and others. Here below are the details of how to calculate home loan eligibility and the factors influencing this eligibility in brief!
How to calculate home loan eligibility?
You can check home loan eligibility in just a few clicks using an online calculator. Not only this, but you can also make the process error-free by avoiding manual calculations. Additionally, it allows you to know whether you are eligible for a home loan or not by feeding in just a few parameters. If not, you can also plan how to enhance your chances of approving your application. The general process is as below:
Step 1: You will have to provide your date of birth in DD/MM/YYYY format.
Step 2: Next, the application will ask for your residing details.
Step 3: Provide your salary details in the appropriate format.
Step 4: If you have any other source of income, provide that too.
Step 5: Lastly, feed in EMI details if you are paying any.
Using this information, the online housing loan eligibility calculator will evaluate the home loan amount you are eligible for. So, make sure the data you provide in the columns are 100% accurate. Now let’s look into the factors affecting eligibility criteria in brief.
6 factors that affect housing loan eligibility
A financial institution calculates your eligibility to figure out if you can pay off a home loan in full or not by considering some factors.
Look into the following points to know about these 6 factors to affect your home loan eligibility:
- Age: The age limit for salaried individuals should range between 23 and 62 years. However, it is between 25 and 70 years for self-employed ones.
- Income: The minimum salary requirement to avail a home loan is Rs.25,000.
- CIBIL score: Most financial institutions require a CIBIL score of 750 or above. So, if you have a score below this limit, you may have to pay a high-interest rate and margin.
- Debt obligations: The extent of your debt obligation will also affect the sanction amount of your housing loan. This means the less is your debt obligation, the more your chances of getting your loan approved.
- Employment status: Your employment status is another factor determining your eligibility. Financial institutions require a minimum of 3 years of work experience for salaried individuals and 5-year business history for self-employed people.
- Property details & LTV ratio: Lastly, for getting financial institutions’ approval, you will have to provide the property valuation details. Remember, the institutes will only fund you 75% to 90% of the total house value. So, you must calculate the eligibility accordingly.
How to improve your home loan eligibility?
If, after calculating, you find your score is low enough to get your application rejected, work on the following home loan eligibility criteria to improve it yourself:
- Paying off your current debt obligations: Institutes will look into how much debt you owe to judge your capability of paying back the loan amount. So, you must try to pay off any debts you have, like credit card bills and others, before applying.
- Extending your loan tenor: Maximising your home loan repayment tenor is another way to improve your eligibility. This will reduce your monthly EMI amount, increasing your capability to repay the loan.
- Adding co-applicant: If you have a lower possibility for approval, you can increase it by adding a co-applicant to your application. It can be your spouse or parent with good financial condition.
After you improve your chances of home loan approval by following the above suggestions you can apply for a housing loan. For this purpose, you may have to visit the site of NBFCs offering such services. To make the process even more convenient and hassle-free, you can also opt for a pre-approved offer by NBFCs on home loans or loans against property, etc. However, you must provide valid credentials to check your pre-approved loan offer.
If you are an individual looking to apply for a home loan, these are some important housing loan eligibility details to look into. So, make sure you do not miss out on any section for effortless approval.
