How Is Home Loan Eligibility Calculated?
Home loan eligibility is calculated based on factors such as your income, employment type, credit score, existing financial obligations, and the value of the property you wish to purchase. Lenders assess your repayment capacity by considering your monthly income, debt-to-income ratio, and credit history.
For improved chances of securing a loan at competitive interest rates, maintain a credit score of at least 700 and keep your debt-to-income ratio below 30%.
Home Loan Eligibility Criteria
| Category |
Eligibility Criteria |
| Salaried Individuals |
- Employed in multinational companies, government organisations or listed public firms
- Employed in private ltd companies, closely held/unlisted firms, partnerships, or proprietorships.
|
| Self-Employed Individuals |
- Individual businessmen or sole proprietors
- Professionals such as doctors, architects, and chartered accountants
- Partnership firms, private limited companies/ closely held/ unlisted companies
|
| Home Loan Interest Rate |
Starts at 10%* per annum |
| Home Loan Tenure |
Up to 30 years* |
| Eligibility Age |
21 to 65 years (no more than 65 at the time of loan maturity) |
| CIBIL Score |
700+ |
| Maximum Loan Amount |
INR 1 crore* |
*Please note that apart from these, other factors may also be used to determine your final eligibility as per our policy and eligibility criteria at the time of loan application.
Home Loan Eligibility Documents
Your eligibility for a home loan will be verified through specific documentation to process the application towards gaining approval.
Here is a basic document list for your easy reference.
- Proof of Identity – PAN Card, Voter’s Card, Driving Licence, Employee Card
- Proof of Residence – Aadhaar Card, Latest electricity bill/piped gas bill, Ration Card, Property Tax/Water Bill
- Co-applicant Guarantor – KYC documents
- Proof of Income for Salaried Individuals – 6 months' bank statements with salary credit, Last 3 months’ [pay slips, Form 16 for 2 years
- Proof of Income for Self-Employed Individuals – 6 months’ bank statements for primary account, IT returns for the last 2 years, CA -audited financials (if applicable)
- Documents pertaining to the property you wish to purchase will also be requested
Why Use an Eligibility Calculator for Home Loan?
A free online home loan eligibility calculator in India helps you save time and effort during the loan application process. It quickly evaluates your borrowing capacity, giving you an estimate of the maximum amount you may qualify for.
This tool provides insights into your financial standing and potential improvements. For example, increasing your credit score through timely payments and reducing existing debt can enhance your loan eligibility.
After the assessment, you can also reach out to our team for guidance on the next steps.
How to Use SMFG Grihashakti’s Home Loan Eligibility Calculator
Using our housing loan eligibility checker is very easy and involves the following steps:
- Enter the value of the property you wish to purchase in the home finance eligibility calculator.
- Select whether the property is commercial or residential.
- Enter your monthly income.
- Enter your net monthly obligations. This is the sum of all EMIs you are currently paying. If you don’t have any ongoing EMIs, please enter zero.
- Select interest rate and tenure.
You will be able to see the maximum home loan amount you may be eligible for on the right side along with the monthly EMI. You can vary the interest rate and tenure in the eligibility assessment calculator to understand how these factors may impact your loan amount eligibility.
Please note that actual eligibility will be determined on the basis of several other criteria including CIBIL score, creditworthiness, repayment capacity, nature and value of property, nature of employment, etc., and SMFG Grihashakti’s policy at the time of home loan application
How to Enhance Home Loan Eligibility?
Here are some actionable steps you can take to improve your housing loan eligibility:
- Adding an earning family member as a co-applicant
- Ensuring a steady income, such as regular savings and investments
- Presenting details of additional income sources
- Maintaining a record of variable salary components
- Rectifying credit score errors
- Repaying ongoing loans and debts
Using a house loan eligibility calculator can give you a better picture of how the above-mentioned improvements affect your eligibility.
How to Improve Your Home Loan Eligibility?
Factors like advancing age or an unstable income can hinder securing the ideal home loan for your dream property. Yet, there are strategies to potentially boost your eligibility. Here are five key tips to significantly enhance your chances of qualifying for a home loan:
- Consider Applying with a Co-Applicant: Applying with a co-applicant, like a family member, can increase eligibility and share financial responsibility. The financial burden is shared and tax benefits are enjoyed by the co-applicant.
- Choose a Longer Loan Tenure: Opting for a longer tenure may result in lower EMIs, positively impacting your repayment track record and eligibility. It may put a burden on your pocket to make substantial payments.
- Repay Existing Loans: Clearing existing debts improves the Debt-to-Income Ratio, a vital factor in determining eligibility. Prepay all of your existing loans to improve your credit score and increase loan eligibility.
- Maintain a Good CIBIL Score: Maintaining a credit score of 700 or above reflects strong repayment capacity, enhancing home loan eligibility. Keep a regular check on your credit score to avoid rejection and defaulting.
- Specify Additional Income Sources: Specifying all supplementary income sources, such as rental income, contributes to an improved debt-to-income ratio, positively influencing housing loan eligibility.
How to Check Home Loan Eligibility Online?
As a prospective home loan seeker, you can conveniently determine your eligibility from the comfort of your home using digital tools such as a house loan eligibility calculator. These loan approval estimators are available on the websites of most financial institutions.
To streamline the process, start by visiting the home loan eligibility calculator page and inputting essential information, such as:
- Monthly income
- Net monthly obligations
- Market value of the property you wish to purchase/construct
- Interest rate
- Loan tenure
Evaluating the home loan eligibility criteria offered by different providers enables you to compare options effectively. This step is crucial in choosing the right housing loan, ensuring you benefit from favourable EMIs and can manage timely repayments.