As a home loan is a long-term commitment of 20-30 years, lenders remain anxious while disbursing you the credit to buy a home. All your income, expenses, savings, repayment potential, credit score and others would be checked thoroughly by the lender before it okays your application. There are many who, despite boasting of a handsome income, fail to grab a loan offer either due to a poor credit score or their bank statement showing their savings to be negligible post the deduction of expenses from income each month.
A home loan eligibility calculator can, however, give you a rough idea of the finance you can expect to receive from a lender. So, know more about the calculator in this article.
How Can You Use Home Loan Eligibility Calculator?
You can find the eligibility calculator on the website of banks. All you need to do is to visit their website, go to the bank’s home loan section, then to eligibility and finally the calculator. The calculator will quote the loan amount and other details but only after you answer a few personal and professional queries. These queries can be your name, age, address, income, the name of the organization where you are currently working at, etc. You could even be asked to detail on the EMI you can be comfortable paying to the lender. After getting all these details, the calculator will run its algorithm to see how much loan you actually deserve to get.
Function of Home Loan Eligibility Calculator Outlined
You can get a brief idea of how the calculator works taking into account an example below.
Example – Ram Charan Das, a market research analyst in a reputed firm, earns ₹1,00,000 in a month. He makes a saving of ₹65,000 every month. The bank, where he intends to apply at, charges home loans at an interest rate of 8.65%-9.50% per annum. What the bank will first do is to calculate the per lakh EMI. The per lakh EMI, in Ram’s case is likely to range from 780-841, taking into account the interest rate of 8.65%-9.50% and a 30-year loan tenure. Now, the bank will use the following formula to decide your loan eligibility.
Loan Eligibility – 1,00,000 x savings/per lakh EMI
– 1,00,000 x 65,000/780 = 83,33,333 (approx.)
– 1,00,000 x 65,000/841 = 77,28,894 (approx.)
Although not exactly the same, you can get a loan somewhere around the figures shown above.
After getting aware of the function of the eligibility calculator, the next step lies in knowing the eligibility criteria set by different lenders. Let’s check the criteria of some banks below,
SBI Home Loan Eligibility Criteria
The country’s largest lender SBI has put in place a few eligibility criteria a borrower needs to meet. Check below what they are.
- A resident Indian with a minimum and maximum age of 18 and 70 years, respectively, at the time of application and loan maturity
- A stable and regular source of earning is sought
- Both salaried and self-employed can apply
HDFC Home Loan Eligibility Criteria
Giving SBI a stiff competition in the home finance space, HDFC Limited has remained a formidable force by bringing a large number of borrowers under its umbrella. For the umbrella to keep you under, you need to conform to the following parameters.
- You can make a home loan application either individually or jointly. All the proposed owners of the property are required to be co-applicants (closed family members)
- Both salaried and self-employed are eligible to apply for a loan
- The tenure to be provided is subject to your age at loan maturity, income, job profile, property’s age at loan maturity, etc.
Axis Home Loan Eligibility Criteria
Axis Bank, like SBI and HDFC, is also active in providing home loans to the eligible candidates. To become eligible, you must meet the following criteria.
- A minimum of 21 years is required at the time of loan application, while the maximum age of an applicant must not be above 60 years at the time of loan maturity.
- Both salaried and self-employed with a stable source of earning can apply