Before making an application for a Home Loan, you should determine your Home Loan eligibility i.e. the amount of Home Loan you are eligible for. When you know the loan amount you are eligible for, there are fewer chances of your application getting rejected.
You can calculate your Home Loan eligibility either on your own or by using an eligibility calculator available online.
What is a Home Loan Eligibility Calculator?
A Home Loan eligibility calculator is a tool that helps you in finding out the amount of loan that you are eligible to borrow. It gives you an estimate of the amount of loan that you can apply for.
It is available online on the websites of different loan providers and financial institutions.
How to Utilize a Home Loan Eligibility Calculator
While you can calculate your eligibility on your own but using a Home Loan eligibility calculator is more beneficial. You can use an eligibility calculator with the help of the following details –
1. Monthly Income – You need to provide information about your monthly income in the respective field. Your monthly income is the most important determinant of your loan eligibility. Your income decides your capacity to repay the loan and hence it decides the Home Loan amount that you can borrow. The higher the monthly disposable income, the higher will be the loan amount you will be eligible for.
2. Loan Tenor- Loan tenor is another important factor in deciding your loan eligibility. Your loan tenure is often determined by your age because some money lenders have an upper age limit for borrowers. This acts as a restriction on your loan tenure. If you apply for a loan at your young age, there are more working years available and hence you will be considered financially more stable and eligible for a higher loan.
3. Existing EMIs: Existing EMIs or debts are also taken into account by an eligibility calculator. If you have existing EMIs or unpaid debts, it reduces your credibility and in turn your Home Loan eligibility too.
4. The Rate of Interest: If you are ready to pay a higher interest rate, your eligibility for Home Loan increases because what is the cost for you is income for the money lender.
5. Income of Co-applicant: If you add an earning co-applicant in your application for a Home Loan, the co-applicant’s income will be also considered in computing the total income available for paying EMIs and hence you will have a higher Home Loan eligibility.
When you submit all these details in the respective fields of an eligibility calculator, it gives you an amount you are eligible to apply for. You can use calculators available on websites of various money lenders any time and as many times you need.
The Bottom Line
Different money lenders have different criteria for Housing Loan eligibility.
With the help of the Home Loan eligibility calculator, you can compare your Home Loan eligibility for different banks and financial institutions and then make a decision.