Since home loans are high-value loans, lenders do not sanction these loans quickly, unless borrowers can show their capacity to repay the loan. This capacity is evaluated by running an eligibility check. Potential borrowers must use a tool known as a home loan eligibility calculator before applying for the loan. Here’s how you can check if you are eligible for a home loan.
Steps to check your home loan eligibility
To ascertain that your home loan is sanctioned without any hassles, you first need to locate the home loan section on your chosen lender’s website. It is in this section that you will find the home loan eligibility calculator. Follow these below mentioned steps to use the calculator.
- Enter your age details in the eligibility calculator
To determine your home loan eligibility criteria, lenders ask you to enter your age details. You should ensure that you fall in the age group as required by the lender and enter the figure. Most lenders provide home loans to borrowers above the ages of 21-24 years, whereas the maximum age at the time of loan repayment should not exceed 65 years.
- Choose your employment status
Home loans are provided to both salaried individuals as well as self-employed professionals. However, the home loan eligibility criteria for both types of borrowers generally differ, especially in terms of your age and your income. Usually, salaried employees need to be at least 21 years old, whereas self-employed professionals need to be 24 years to be eligible for the loan.
- Enter your net monthly income
Lenders need to ensure that you will be able to repay your home loan EMI instalments without defaulting. They can ascertain this through your salary. Thus, in the next tab of the EMI calculator, you need to enter your net monthly income, i.e. the total take-home amount after all mandatory deductions. Most lenders today, provide home loans to individuals drawing a net monthly income of ₹25,000 to ₹40,000. However, the income eligibility criteria differ from lender to lender and city to city.
- Enter your credit score
You must now enter your credit score in the next tab of the home loan eligibility calculator. Banks are quite stringent about the credit score and don’t sanction loans to borrowers with credit scores less than 750 out of a possible 900 points. On the other hand, HFCs are lenient and may approve your loan, even if you do not have the necessary credit scores. That said; the HFCs may hike the interest rates for making concessions with your credit scores.
- Enter details of other loans you are repaying
Lenders also prefer to understand how your income and budget is planned, so that you can accommodate the home loan EMI. This is why they check if you have any other existing loans. If you do, you need to enter the percentage of sums dedicated to the repayment of those loans.
- Check your eligibility
The final step to check home loan eligibility is to click ‘enter’. The calculator instantly computes the loan amount you are eligible for based on the information provided in the various tabs.
In conclusion, home loans help you fulfil your dream of buying a property. You can apply for the loan and repay it in budget-friendly EMI over a flexible tenure. But before you send out your application, remember to use the home loan eligibility calculator to check if our loan application may be considered.
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