The first important thing to consider when applying for a home loan is eligibility. Banks consider various factors like repayment tenure, income, current obligations, etc., to decide whether you qualify for a home loan.
When the applicant is not eligible for a home loan, the process becomes stressful for them. To avoid the chances of a stressful process or any rejection, it is suggested to use the home loan eligibility calculator.
It is an online tool that helps you determine home loan eligibility. Keep reading the article to get complete information about the home loan eligibility calculator.
What is a home loan eligibility calculator?
As the name suggests, the home loan eligibility calculator is a tool that helps you to evaluate home loan eligibility. To use the eligibility calculator, you have to input the basic information, including repayment tenure, monthly income, income details, current obligations, etc.
Once you enter the basic details, the home loan eligibility calculator will give you an idea of the amount you are eligible for.
Factors that affect the home loan eligibility
Here is the list of factors that affects home loan eligibility. If you decide to take a home loan, you should be aware of the factors.
Age is an important factor considered by the lender to approve the loan application. If you are 25-30 years old and want a home loan, you can get a loan for up to 30 years. The extended repayment tenure will provide you with a smaller EMI and higher eligibility, making it easier for you to repay the loan amount without default.
- Net income
Your repayment ability and current income are taken into account while deciding your eligibility for a home loan. The home loan eligibility calculator determines your eligibility based on your net income.
- Credit score
A credit score is another important factor that decides whether you are eligible for a home loan. If your credit score is more than 650, you are eligible to get a home loan at the best interest rates and make the chances of loan approval quickly.
- Type of employment
Employment is another important consideration by the lender to decide your eligibility for a home loan by using a home loan eligibility calculator. If you are self-employed or fill out the ITR, it can increase your chances of getting approved for a higher loan amount.
- The ratio of Loan to value
The ratio of Loan to value is the property value percentage from where you will get financial assistance through a lender. Usually, the banks may fund up to 90% of the property’s market value as assessed by them.
- Property Location and type
The property type and location are considered while deciding the home loan eligibility. Lenders or banks provide better interest rates to borrowers who want to buy approved property situated in the prime area than those who buy unapproved property.
A home loan is a big and important decision, so you can not take it lightly. You must be aware of the eligibility before applying for the Loan.