To qualify for a home loan, every applicant must first meet the lender-specific eligibility criteria. A home loan eligibility criteria are the set of guidelines a lender provide to check if the prospective applicant is capable of repaying the loan amount or not. If an applicant fails to meet these criteria, a lender might cancel the loan application, which will negatively impact the CIBIL score.
Thus, most lenders advise prospective borrowers to use a home loan eligibility calculator beforehand, as this calculator is the most comprehensive way to compute home loan eligibility.
What is a home loan eligibility calculator?
A home loan eligibility calculator is an online tool that shows how much amount a prospective borrower can avail from the financial institution based on their location, date of birth, monthly income and current financial obligations.
For example, an applicant from Mumbai, born on 10th January 1985, with a monthly income of Rs.60,000 and a monthly obligation/EMI of Rs.25,000 can avail a maximum loan amount of Rs.20,25,748.
How to calculate home loan eligibility?
A home loan eligibility calculator has 4 variables, location, date of birth, monthly income, and monthly obligation/EMI. Although a simple and easy online tool, the steps to use it are as follows –
Step 1: Select the city of residence.
Step 2: Enter the date of birth of the applicant.
Step 3: Enter the monthly income or adjust the given bar to select the earning.
Step 4: Provide all financial obligations or current EMIs.
The calculator will compute and give results instantly.
Benefits of using home loan eligibility calculator –
- This calculator provides a precise loan amount a prospective borrower can avail.
- Borrowers can alter the parameters to avail the maximum loan amount.
- Opting for an eligibility calculator can save time significantly as the eligibility.
- As this tool is available extensively, applicants can use it anywhere, anytime, without any cost.
Prospective borrowers can also check the home loan part-prepayment calculator for ease of financial calculations. This calculator provides an insight into the part-prepayment amount based on three primary factors –
- Outstanding amount –
This is the remaining amount from the availed home loan a borrower has to pay.
- Tenor –
A home loan tenor is the time frame of the availed home loan. For example, a beneficiary has availed a home loan for 20 years; then their tenor will be 20 years or 240 months.
- Rate of interest –
The rate of interest is the cost of borrowing and is calculated as a percentage value on the loaned amount.
Home loan eligibility criteria
To avail a home loan successfully, meeting the lender-specific eligibilities is mandatory. Though the parameters vary with lenders, the common ones are:
- Applicants must be residing citizens of India.
- They should be between 23 – 70 years of age.
- Candidates must have 750 or above CIBIL score for a home loan.
- They should have work experience of at least 3 to 5 years.
To qualify for a home loan, candidates also need to produce certain documents apart from meeting these eligibilities.
Documents required for a home loan
1. KYC documents
- Passport
- Voter ID card
- Aadhaar card
- Driving license
2. Last 2 months’ salary slips
3. Employee ID card
4. Last 3 to 6 months, bank account statements
5. Self-employed applicants need to prove a business vintage of 5 years.
Availing a home loan from a reputed lender comes with lots of perks. As the current policy rates set by the Reserve Bank of India are on the lower side, most lenders disburse a home loan at competitive interest rates. Additionally, borrowers can enjoy tax benefits under Section 80 C, 24 and 80 EE of the Income Tax law. Besides this, a borrower can choose a home loan balance transfer with leading financial institutions to get maximum financial benefits.
Selected financial institutions also extend pre-approved offers that simplify and expedite loan processing. Such offers are available on a range of financial products like loans against property, home loans, etc. Enter your name and contact number to check your pre-approved offer online.
Thus, before settling for a housing loan, it is best to check the home loan eligibility criteria of the chosen lender. Also, opting for the home loan eligibility calculator can significantly ease the process.