Owning a home in a city or town of our choosing is a dream come true for many of us, as is a rite of passage for earning individuals. However, when faced with the skyrocketing rates of real estate, it may be difficult to purchase one outright. This is where banks and lending agencies can shine a ray of hope with Home Loans.
However, before one applies for a Home Loan, one needs to assess their eligibility for receiving a home loan and the amount allowable. A Housing Loan eligibility calculator can help you assess where you stand and make the process easier. In this article, we look at how you can determine your Home Loan eligibility with the help of a Housing Loan calculator.
Home Loans Eligibility Criteria:
Every person who wishes to apply for a Housing Loan needs to clear a set of eligibility criteria set by the lending agency. While every bank has its own eligibility checkpoints, most of the metrics are predetermined by a regulatory authority. The most common eligibility testers are mentioned below for your understanding:
- The applicant’s age: to apply for a Home Loan, the applicant is required to be at least 21 years of age, and the maximum age may vary from one lending institution to another.
- Loan applicant’s income bracket: The loan applicant needs to prove that they have a steady and recurring source of income. To reduce the risk of lending, many banks and lending agencies have their minimum income criteria, which may start from Rs 25,000 per month or more and may change depending on the city where the applicant resides.
- The applicant’s creditworthiness: The banks and lending agencies thoroughly gauge the credit score of the individual applying for a Home Loan. A score of 750 and above is ideal for getting quick approval.
- Employment and economic stability: When banks and lending bodies assess a candidate for loan approval, having a stable job is a huge plus point in their checklist. If you have a job for 2-3 years, you may get a loan easily.
- Existing financial obligations and liabilities: If you have any previous liabilities, unpaid bills, ongoing loan repayments, and other financial obligations, the bank would check your ability to pay their Housing Loan back before approving your application.
Calculating Home Loan Eligibility:
Calculating your Home Loan eligibility is a critical step before applying for a Home Loan, for if you apply without checking, you stand the risk of being rejected. Most banks and Non-Banking Financial Companies (NBFCs) have an online Housing Loan calculator on their websites that can help their customers and any interested party determine their Home Loan eligibility. These calculators are programmed to take into account criteria such as the applicant’s income, age, credit score, and any existing financial obligations to provide them with an estimate of the Home Loan amount they can receive.
Using a Housing Loan calculator is relatively simple compared to making the deductions yourself. All you need to do is add the details required in their respective fields to the most accurate figure. Based on these metrics, the calculator will give you an estimate of the amount you’re eligible for and if you can get a cheap Home Loan interest rate.
A disclaimer while using these calculators would be to note that the estimate provided by the website is just an approximation per the programming. There can be a difference between the actual amount of loan a candidate is eligible for depending on the lender’s policies and your application’s strength.
How to Apply for Home Loan after Calculating Eligibility:
Once you have used the Housing Loan calculator to determine your eligibility, the next step is to apply for a Home Loan. Here are the steps involved in the process:
- Research and Compare: Research and compare different lenders and their Home Loan products. Look for factors like interest rates, processing fees, and repayment periods.
- Fill out the Home Loan Application Form: Once you have chosen a lender, fill the application form with accurate details. You’ll also need to submit documents such as identity proof, address proof, income proof, and property documents.
- Get verified by the lender: The lender will verify the documents and details provided by you. They may also conduct physical verification of the property.
- Have the loan sanctioned: If the lender is satisfied with your application, they will sanction the loan and provide you with a loan agreement.
- Loan disbursement: After you have signed the loan agreement, the lender will disburse the loan amount to the seller or developer of the property.
Documents Needed:
Once a candidate has understood their Home Loan eligibility and picked a lender, they need to fill out an application online and submit some documents to complete the process. The documents required are mentioned below and may be subject to a few more inclusions as per the respective bank.
- Identity proof (Aadhaar card, passport, voter ID card, PAN card, or driving licence)
- Address proof (Aadhaar card, passport, voter ID card, or utility bills)
- Income proof (Salary slips, bank statements, Form 16, or income tax returns)
- Property-related documents (A sale agreement, sale deed, or property documents)
- Employment-related documents (Job appointment letter, work experience certificate, or business proof)
Conclusion:
Before you start with your loan application process for the house of your dreams, every applicant needs to understand what amount they may receive. This will help in a long-term financial plan that can aid in repaying the amount borrowed in suitable instalments without hurting your budget. If you’ve not yet started hunting for a home, it may be a great step to reverse engineer your way through the process and first find out how much you can borrow first. Next, figure out the down payment you can make to finalise your new home’s budget. This will make your loan application and house-hunting process much more streamlined as compared to any other approach. So, what are you waiting for? Start comparing your loan amounts by using various banks’ Home Loan eligibility calculators to get the best deal possible!
