Most home buyers seek a House Loan to buy the abode of their choice. To find the home of your choice, you may have to do some homework, and the same applies to your loan. To avail a loan for a home purchase, ensure to meet the eligibility criteria laid down by the lender.
Rather than applying for a loan and then waiting for the financial institution’s response, assessing and seeing if you are eligible for the loan is a good idea. A Home Loan eligibility calculator is a useful tool that can help you with this.
What Is A Home Loan Eligibility Calculator?
A Home Loan eligibility calculator is a handy online tool that helps you estimate your loan eligibility based on a combination of factors. These factors include your monthly income, current age, retirement age, credit history and other fixed financial obligations.
This tool is an indicator of loan affordability and repayment capacity.
What To Consider When Calculating Home Loan Eligibility?
Before you use a Home Loan eligibility calculator, consider the following aspects.
Monthly Income
Your monthly income is the most critical aspect when it comes to Housing Loan eligibility. Consider income from all sources when you compute your eligibility, as it will help you avail a bigger loan.
Consider The Tenure
The tenure of the loan can impact the Equated Monthly Instalment (EMI).
A shorter period reduces the overall loan cost but increases the EMI burden. And in this, you may have to compromise on your budget.
A longer loan tenure increases the loan cost and makes it easy for you to pay your EMIs.
The eligibility calculator can help you balance both aspects and choose the best fit.
Consider Your Monthly Outflow
Income is one aspect that determines your repayment capacity; your ability to repay the dues also hinges on your monthly expenses, including EMIs for other running loans. Your monthly EMI outflow, including the fresh loan instalment, should be less than 60% of your monthly income.
If all your loan instalments put together exceed 60%, getting a new loan could be difficult. Have an accurate estimate of your instalments before you use the calculator. If you already have a high incidence of debt, consider lowering it before you apply for a new loan.
After you factor in these aspects, use the calculator to know your exact EMI and compare offers from different lenders.
How To Calculate Your Home Loan Eligibility?
To accurately compute your Home Loan eligibility, use Housing Loan Eligibility Calculator by following the steps shown below –
- Enter your net monthly income.
- On the slider, choose the loan duration
- Enter the interest rate for the loan.
- After that, key-in details about existing EMIs.
You can change the loan duration to compare the EMIs for different durations and choose the term most suitable per your repayment capacity.
After that, you can request a call back from the housing finance company representative for a discussion about the loan eligibility, and you can get a customised quote per your requirements.
How To Increase Your Home Loan Eligibility?
You can increase your Home Loan eligibility by applying jointly with a co-applicant. The joint applicant’s income is also added to your income to calculate the loan eligibility.
Another way to increase your loan eligibility is to repay other loans, as it reduces your monthly EMI burden and increases your repayment capacity.
To Wrap Up
A Housing Loan runs for a considerable duration, meaning you have to pay EMIs for many years. With the use of an eligibility calculator, you can make an informed decision that can help you save money and choose the best deal per your repayment capacity.
So key in the details and get going!