One of the quick online tools that help determine whether a bank or an NBFC will grant you the funds for your dream home is the home loan eligibility calculator. This instrument is available on all the lenders’ website. Use this tool to calculate your eligibility before approaching the lender. The tool helps understand the exact you require for the loan based on your eligibility. Since it is free of cost tool, you can use it multiple times until you arrive at a comfortable EMI amount.
If you want to check home loan eligibility, you need to follow the steps while using the calculator –
Income
The eligibility includes four primary tabs, with the income being the first one. It is here you enter your monthly income. Remember, enter the figure after all the mandatory deductions such as PPF, TDS, and professional tax. You need to input your net or in-hand monthly income in the tab. This enables you to compute the payable EMIs accurately.
Interest rates
Most of the lenders mention the minimum and maximum interest rate offered against house loans. Lenders cannot sanction them below the MCLR as directed by RBI. If you use the calculator on the selected lender’s website, you will find their minimum and maximum lending rate. You may need to select it from the drop-down menu or adjust cursor on the interest rate scale. Remember, the bank offers different interest rates when you apply for the loan.
Tenure
Enter your preferred tenure for calculating the home loan eligibility criteria. Different lenders offer different tenure. Many times, it depends on the loan amount. Note, the higher the tenure, the lower the EMIs but, the higher the interest rates. This increases the overall value of the loan.
Other payable EMIs
It is the fourth and last tab in the home loan eligibility calculator. You should enter the total amount of other EMIs payable. For example, if you have an ongoing car loan as well as personal, you must enter the total amount of EMI amount in the tab. This helps the lenders know you are a responsible borrower and a portion of your salary gets deducted towards other EMIs.
Hence, before applying for the loan, make sure to check this calculator. You must remember that that thumb rule states not to exceed the EMIs beyond 40 per cent of your income.
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