Home Loan Eligibility Calculator

Factors Affecting Home Loan Eligibility in Banks

Tips to increase eligibility

• Apply with a co-applicant: You can boost your eligibility by adding an earning spouse or your parents as a co-applicant. Taking a joint loan with the co-applicant increases your income and eligibility to borrow more money. Suppose, your monthly income is Rs. 30,000 and the loan amount you are eligible for is Rs. 15 Lakh, If you add your spouse as co-applicant, earning Rs. 20,000 per month, can increase your eligibility to Rs. 25 Lakh. So, it is advised add a co-applicant, wherever possible, to improve your eligibility.
• Clear your existing debts: If you have running loans and you are paying other EMIs because of which your loan amount eligibility is low, you may want to prepay some of your existing debts to improve your eligibility. Say, your monthly income Rs. 35,000 per month and you have a credit card outstanding of Rs. 10,000. In this case, your eligibility decreases as your FOIR is calculated on your income left after paying obligations. So, pay your credit card dues and then apply for a fresh loan for higher loan amount
• Increase loan tenure: Apply for a tenure which is maximum to your age. If you apply for housing loan for 30 years, it will enhance your eligibility as the EMIs go down. In this case, however, you will end up paying more interest by the end of the tenure. In contrast, if you take loan for 10 years tenure, you might be eligible for a lower loan amount.
• Complete market research: One must do complete market research as the home loan interest rates keeps on fluctuating. Fixed rates remain same during the tenure and floating rates change with change in MCLR or base rates. It is important to study the changes in home loan rate of various banks in response to MCLR to understand the responsiveness of banks to market rate changes.
• Other income source: Higher income enhances your eligibility. If you are earning income through other sources such as rent, then don't forget to mention the income with complete proof as it can increase your eligibility for a high loan amount.

Illustration – Mr. A, 30 years old, wants to purchase a home whose property value is Rs. 60 Lakh, His net income is Rs. 50,000 per month and he has no other fixed obligations. Banks will calculate Mr. A’s loan amount eligibility based on his age, net income and his fixed expenses as a % of his net income. Based on the loan amount Mr. A is eligible for, he will be offered home loan rate corresponding to the slab he falls in and that will be used to calculate his EMI. In Mr A’s case, he will get the following results for various banks on a home loan calculator.

• As you can see in the above table, loan amount eligibility differs for different banks. Hence, it is extremely important to compare the eligibility terms and interest rates of different banks before choosing the bank to borrow from.
• Banks offering highest eligibility of Rs. 4,670,659 are SBI, ICICI Bank, Axis Bank, IDBI Bank, Indiabulls.
• Minimum eligibility of Rs. 3,592,814 is offered by HDFC.
• EMI amount ranges from Rs. 27,245 to Rs. 39,472 at different interest rates offered by banks.

Home Loan Eligibility of All Banks