Home Loan Eligibility Checker: Your First Step to Home Ownership - Loan Trivia


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Thursday 4 April 2024

Home Loan Eligibility Checker: Your First Step to Home Ownership

Acquiring the home of one's dreams might not always be simple. Since the real estate values increase over time, borrowers must have a strong financial cushion to make their dream homes a reality. In this situation, a home loan can be the best option because of low EMIs, and a competitive interest rate. 

But before the lender approves the requested amount, borrowers must meet their eligibility for a house loan. This article discusses how to use a home loan eligibility checker online and other factors.  

How to use a home loan eligibility calculator? 

With the help of a home loan eligibility checker, users can determine their maximum loan amount depending on a number of eligibility criteria. Here is how to do it:

Step 1: Borrowers must first input their date of birth in the date-month-year format.

Step 2: Then, using the dropdown menu, users must enter their city of residence. Based on the choices, the home loan eligibility calculator determines the loan amount that is appropriate considering the income and market price of the house to be purchased.

Step 3: Then they must enter or slide to include their monthly wage or income in 'Rupees'.

Step 4: Next, they must provide their current financial responsibilities, such as EMIs, fixed bills, etc.

Home loan eligibility criteria

Typically, applicants for a home loan must fulfil the eligibility requirements listed below: 

  • Type of Employment: Those who work for themselves or are salaried might qualify for a home loan.

  • Age requirement 

    • For employed: From 23 to 75 years 

    • For self-employed: From 25 to 70 years

  • Citizenship and Residential Status: 

    • Salaried applicants: Must be citizens of India (including NRIs). 

    • Self-employed applicants: Must be Indian residents solely.

  • Work Experience Vintage 

    • For salaried: three years or more of job experience

    • For independent employees: At least five years of experience in the current industry 

Factors affecting home loan eligibility

To be eligible for a housing loan, applicants must meet certain criteria set by lenders. Therefore, it is vital to understand the factors involved in determining home loan eligibility, which include:

  • Income

Earnings are a defining factor in one's repayment ability, protecting against potential defaults. A handsome salary allows an applicant to easily manage their EMIs, which is why lenders assess an applicant's financial status from the beginning.

  • Credit score

Credit scores provide lenders with a good indication of a borrower's creditworthiness. Typically, a CIBIL score of 750 or more is preferred because it reflects that. A lower credit score, on the other hand, indicates poor credit conduct, which reduces home loan eligibility.

  • Employment status

Salaried employees should have a minimum of two to three years of job experience in their current company to be eligible for home loans. Holding solid employment with consistent sources of income ensures lenders prompt repayment.

  • Age

Lenders typically impose an age limitation for potential borrowers. They prefer to lend to younger people because of their longer careers and financial growth, which makes repayments easier. 

Apart from these, borrowers should also know that many financial institutions offer pre-approved loans to their existing clients. These deals are valid for financial products such as property loans and home loan. Interested individuals can check their eligibility by entering their names and other information. Availing these offers hasten the application approval of borrowers. 

A home loan is a wise and sustainable approach for financing a new home without depleting the hard-earned cash. Potential borrowers should use an online home loan eligibility checker to determine their eligibility and then discuss it with their lender. 

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