When you are planning to take home loan, you should first know about your home loan eligibility to determine whether you qualify for the specific loan amount as per the criteria standardized by a lending institution. The criteria for home loan eligibility are guidelines that you should fulfil in order to apply for a home loan scheme. 

If you do not meet the criteria, your loan would be rejected and your credit report will receive a negative remark. But if you use home loan eligibility calculator, you can know about the eligibility without affecting your credit score.

The eligibility calculation depends on various factors like your current age, credit score, monthly income, credit history, fixed monthly financial obligations, retirement age, etc. The home loan calculator is a free and useful tool you can find online. Then, you have to insert your personal information like loan tenor, monthly income, existing monthly obligations, etc., and a tentative loan amount will flash onto your screen. This amount is the representation of the amount you can receive as your home loan. 

How Does A Home Loan Eligibility Calculator Work?

The eligibility criteria for a home loan vary from a lender to another. But, generally, a common set of criteria includes some factors, which are – 

  • The individual applying for the loan should be self-employed or salaried.
  • The applicant must have at least Rs. 25,000 as their net monthly income. 
  • An applicant with a decent CIBIL score or credit score has increased chances of obtaining home loan approval. 
  • All Indian residents can avail the home loan. However, Persons of Indian Origin and Non-Resident Indians are eligible to acquire the loan under specific loan schemes only.
  • The FOIR (Fixed Obligation to Income Ratio) is the ratio of income and current fixed financial obligations like loan EMIs and credit card bills. This proportion should be under 50% mark, including the on-going debt and proposed loan’s EMI payments. 
  • An applicant with fixed regular income has a higher chance of the loan approval than someone with a seasonal income source. This is because regular income means timely loan payments. 
  • Another criterion is the age of the individual, which should be between 18-70 years. Lenders prefer offering a home loan to younger applicants because they have more life-years compared to an applicant in their late 40s and 50s. 
  • Lenders also consider the age and location of the property. A lender can reject the home loan application if the property’s residual age is less or property doesn’t fall within defined geographical limits. 
  • For salaried loan applicants, their 40% of gross income per month can be considered as the monthly EMI against loan. In the case of self-employed applicants, their profit earned ascertains the home loan eligibility.
  • Employment stability and status also play a crucial part in the home loan calculator process. Lenders choose to offer loans to businesspersons with running business for 3 years. For salaried professionals, the requirement is work experience for 2 years and more. 

The Bottom Line 

Before you apply for a home loan, you should use the loan calculator tool to know how much loan you can obtain based on the factors discussed above. This will give you an idea of how much loan you can receive from the lender. 



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