Following the reduction of repo and reverse repo rate, the interest rate applicable on housing loans reduced notably. Resultantly, the demand for this financial product has gone up as well. A recent study suggested that financiers across India has reported a 6% to 14% growth in their home loan portfolio in the first quarter of FY2022.
Therefore, borrowers who are planning to apply for this credit instrument must check the required eligibility criteria to avoid facing any rejection. In this regard, a home loan eligibility calculator can play a part.
What is a home loan eligibility calculator?
It is an online device that allows prospective borrowers to check their home loan eligibility. Here, individuals need to enter details like date of birth, city of residence, monthly income, loan amount and tenor, etc., to find out the loan amount one can avail.
Using these online calculators to check home loan eligibility is not a hassle. With its friendly user interface and fast and accurate results, borrowers can get the required results in no time.
Here is a step-by-step guide on how to use this online device –
Step 1: Visit the lender’s official website
Step 2: Navigate to the home loan eligibility calculator
Step 3: Enter date of birth and city of residence on the given fields
Step 4: Set values for parameters such as-
- Net monthly salary or income
- Loan repayment tenor
- Additional sources of monthly income
- Other financial obligations like existing EMIs
The correct home loan amount one is eligible to opt for will appear on the screen.
Besides knowing how to use this online device, individuals should also learn about the home loan eligibility parameters before applying.
- For salaried applicants: 23 to 62 years
- For self-employed applicants: 25 to 70 years
Credit score: 750 or above
- For salaried individuals must be of at least 3 years
- For self-employed individuals minimum 5 years
Citizenship: Applicants should be a residing citizen of India
These parameters, however alter from one lender to another, so refer to financier-specific criteria and abide by those. Now, some factors can affect home loan eligibility. Keep reading to know about them.
3 factors affecting housing loan eligibility
To avoid home loan approval delays, steer clear of the following factors.
- Low credit score
Credit score is a 3 digit score that determines the creditworthiness of a borrower. It keeps a record of existing loan details, credit card dues, type of debt taken and other information. Therefore, anything below 750 lowers the chances of approval and increases interest rates.
- Unpaid dues
A long list of debts and loans does not affect home loan eligibility, but the repayment pattern does. Failing to repay EMIs frequently on time and on top of that, several unpaid dues can significantly bring down the chances of loan approval.
- Employment status
The chances of quick approval depend on the employment status of an applicant. For instance, if a salaried applicant is employed to a public or private firm or in an MNC, he/she seems to be a reliable borrower. Similarly, for self-employed individuals running a stable business improves the chances.
Furthermore, leading financiers extend pre-approved offers on financial products like housing loans, loans against property etc., to simplify and accelerate the application process. Individuals can check their pre-approved offers by submitting their names and contact information.
Individuals opting for joint home loans can also use a home loan eligibility calculator to confirm the loan amount of their co-applicants. This way, they get an opportunity to work on their shortfalls to improve the chances of loan approval. Also, individuals should keep the documents needed for a home loan handy to avoid any delays.