Amidst reduced property prices on account of cuts stamp duty charges, launch of several Government-backed schemes, housing loan market grew significantly. Especially, tier-2 and tier-3 cities saw the highest growth of around 10.9% and 13.3%, respectively. Flip side of development is home loan segment has become riskier for finance companies as default rate increased, from young borrowers.
There is sharp rise in loan application rejections, and to curb such issues, individuals need to meet eligibility parameters first. Lenders generally mention a list of necessary parameters beforehand so that applicants can assess their eligibility based on those factors. In regard, individuals can use financial tools like eligibility calculator that requires just necessary inputs to provide accurate result.
Steps to use a home loan eligibility calculator
Availing a home loan is a long-term commitment, mainly due to the large amount and hefty interest charges associated with them. Therefore, it is essential to check your repayment capacity and other related aspects to avoid any complications.
With easy access to internet facilities, assessing housing loan eligibility has become quite simpler than before. Follow the steps mentioned below to complete the process:
1: Visit the official website of your preferred lender and click on the ‘online housing loan eligibility calculator’.
2: You will have to enter your city of residence and date of birth in the respective fields.
3: Next, you will find certain parameters like net monthly salary, other sources of monthly income, loan tenor, and EMIs of existing loans or other financial obligations. Provide right inputs (keep ‘other income sources’ section blank, if you do not have any), click on ‘check your eligibility’.
You can further adjust these inputs on the home loan eligibility calculator to adjust tenor and loan amount as per your repayment capability. Once it shows the maximum eligibility, you can go ahead and apply for a home loan. Note that your home loan eligibility is determined by some specific factors that influence your home loan EMIs.
Factors affecting your home loan eligibility
Following are some factors that influence both your loan eligibility and EMIs in the long run:
- CIBIL score: The numerical expression represents a borrower’s creditworthiness. A high credit score of 750 and above plays a vital role in getting prompt approval from the lender. Based on your repayment track record, the number of defaults for payments, dues, and the credit score keeps changing and influences the current home loan interest rate.
- Age: Lenders generally evaluate the repayment structure based on how many years are left for you as a professional or salaried individual. If you opt for high-value loan just fewyears before retirement, process does not become seamless if applied earlier.
- Employment Status: Similar to other parameters, your employment status plays an equally important role in determining your home loan eligibility. Keeping nature and size of your income in mind, financial institutions determine how much EMI burden will suitable for you. With the help of a home loan eligibility calculator, you can facilitate the assessments manage your financial liabilities better.
- Debt obligations: Unpaid dues inevitably become a concern for financial institutions when applying for a sizeable amount on top of your existing loans. In such scenario, lenders keep tabs on your repayment behavior, Fixed Obligations to Income Ratio etc., before approving loan.
Make sure to keep all documents required for home loan so process does not get too time-consuming for you. Based on these aspects, lenders also provide certain pre-approved offers on different financial products like home loans, lap etc. To get better deals on your loan, you should check your pre-approved offer by submitting your name and contact details.
Secured nature of home loan ensures affordable interest rates and makes easier for borrowers to manage financial liabilities. Ensure faster processing, better to use eligibility calculator and see if you ready for such financial commitments.