Know How To Check Home Loan Eligibility With Eligibility Calculator

If an individual is in the market to purchase a new property, one of the most essential things they can consider making the house buying journey seamless is a home loan. While financial lenders, including housing finance companies (HFCs) and banks, are lining up to offer lucrative housing loan deals, individuals need to meet the home loan eligibility criteria to satisfy their requirements. Fret not; these days, it is much easier to assess one’s eligibility with the help of a Home Loan Eligibility Calculator. Before covering the benefits of this tool, & how to calculate home loan eligibility, first, let’s discuss the nitty-gritty of a home loan and its eligibility requirements. 

What is a Home Loan?

A home loan is a sum of money an individual borrows from a lending institution at a particular rate of interest. It must be paid back as EMI every month. The property is a security by the lending institution in case of a home loan in India.

Top Factors That Determine Housing Loan Eligibility

The fundamental criteria to meet a lender’s home loan eligibility is that a borrower must be an Indian citizen. Besides, when they are applying for a home loan in India, they should be at least 21 years of age. Most financial institutions can also set certain criteria based on which they authenticate a borrower’s eligibility for a home loan such as: 

  • Monthly Income – All the financial institutions set up minimum income criteria. If a borrower fulfils these criteria, they are more likely to secure home loan approval. The monthly income criteria often also depend on which city the borrower belongs to.
  • Credit History – All financial institutions do a thorough verification of a borrower’s credit profile, credit history, and pattern of repayment. They check if in the past, the borrower has missed the due date of EMI payment or if there are unpaid dues.
  • Current Age: Age is one of the most important factors that determine home loan eligibility. This means that when a borrower is at the early stage of his or her career or a good number of years are left before retirement, then the financial institution can approve enough easily.
  • Employment Status: A borrower’s employment status is one of the most essential factors that determine home loan approval. If the borrower is in a private or public sector company or an MNC, the financial institution determines the borrower to have a steady income. On the other hand, if the borrower has their own business, then the lender can offer some flexible terms and conditions for applying for a home loan.

A home loan EMI calculator is one of the easiest and useful ways to determine the eligibility of a home loan. While determining the eligibility, the banks consider several factors such as loan repayment tenor, monthly salary, other sources of income, EMI’s payable basic, and other basic information.

Advantages of Home Loan Eligibility Calculator

  • Convenience and Accuracy – Generally, people are prone to making errors on manual calculations; hence, a home loan eligibility calculator solves this issue and finds the result instantly with 100% accuracy.
  • Financial Planning – Checking the EMI of the Home Loan in advance can help the borrower plan his budget more efficiently.
  • Fast Calculations – With the home loan eligibility calculator, the borrower does not have to double-check the calculations which can be time taking again as the calculator can complete the task just with a single click.
  • Comparing Loan Offers – By using the home loan eligibility calculator, the borrower can compare the loan offers of different financial institutions, which will help him narrow down to his choice.
  • Personal Details Not Needed – A home loan eligibility calculator does not need any personal data of the user; hence, he or she can use it without worrying about any security issues.

Home Loan Calculator Formula

EMI Amount = [P x R x (1+R) ^N]/[(1+R) ^N-1]

Here,

P signifies the loan amount, or the amount lent to the borrower by the financial institution 

R implies the home loan interest rate set by the lender 

N implies the home loan tenor 

The principal, current home loan interest rate, and tenor are variables, which indicates that the EMI value will change when any of these are changed.

The Final Word

A home loan borrower can enhance eligibility by following the below-mentioned tips.

  • Repaying ongoing loans and maintaining CIBIL score for a home loan
  • Assuring a constant source of income, savings, and other investments
  • Rectifying the errors of the credit score
  • Accounting for a structured repayment loan
  • Applying jointly with any of the family members can also improve the eligibility of the home loan.
  • Keeping track of the variable payments of the borrower can also build up the chance of being eligible for a home loan.

Leave a Reply

Your email address will not be published.