Using Home Loan Eligibility Calculator: How to Determine What You Are Eligible For

home loan eligibility calculator

BASIC TEAM

6 mins reading

Last updated on 19th January 2024

Buying a home is a significant financial decision that requires careful planning and consideration. It's an exciting milestone, but it also comes with its fair share of challenges, particularly when it comes to understanding what you can afford to borrow. However, with the help of a home loan eligibility calculator, you can gain a better insight of your affordability by analyzing several key variables. In this blog, we will provide you with a step-by-step guide on how to determine what loan amount you can avail to purchase your dream house.

Table of Contents

What is Home Loan Eligibility Calculator?

A home loan eligibility calculator is a powerful online tool that allows you to determine housing loan eligibility in India based on various factors such as your credit score, interest rate, property type, loan duration, any existing EMI and down payment. It takes into account these variables and provides you with an approximate breakdown of what your monthly payments would be. By using a home loan amount eligibility calculator, you can quickly assess different scenarios and make informed decisions. You can also use monthly emi for home loan calculator to accurately calculate your per month installments for home loan. 

Suggested read: Enhance Your Home Loan Eligibility

How to Use Home Loan Eligibility Calculator in India?

Step 1: Choose a reliable website 

Start by researching online for a reputed home loan calculator website. Many financial advisory websites offer these tools for free. Choose a reliable one that provides accurate results.

Step 2: Enter your required loan amount

Determine the amount you plan to borrow from a lender. This figure should reflect your budget and the down payment you can afford. Input this amount into the calculator.

Step 3: Choose the loan term 

The loan term refers to the number of years you plan to repay the mortgage. The common duration is 15, 20, or 30 years. Consider your financial goals and select a loan term that aligns with your plans. Put this term into the calculator.

Suggested read: Home Loan for Self-Employed Eligibility

Step 4: Enter your age and gender 

The next step is to input your age and gender. Age plays a major factor in determining the loan amount as it helps in knowing the repayment years. Some websites may also ask about gender and city.

Step 5: Confirm your occupation

The lender would also like to know your source of income; whether you are a salaried or self-employed professional, and what is the mode of payment.  

Step 6: Mention your annual/monthly income

The next field to fill is your annual income after all PF, medical & tax deductions. In the case of a businessperson, the total take-home minus the expenses is considered as reliable income. If there is a co-applicant, mention his/her annual income too. Applying for a home loan with a co-applicant helps enhance your home loan eligibility.

Step 7: Current monthly EMI/obligation

Some websites also ask for your ongoing payments every month & the loan amount differs based on that. Consider your regular bills, such as utilities, groceries, and debt payments including car loans, student loans, and credit card balances.

Step 8: Submit

Once you have entered all the necessary information, the calculator will give you an estimated loan amount offered by a number of reputed banks and housing finance companies. This figure will give you a clear picture of what you can afford. Take the time to review and analyze the results, considering different scenarios if needed.

Step 9: Refine your calculations

If the estimated monthly payment is too high or you believe that you can pay more, consider adjusting the loan amount, loan term, or down payment to find a more manageable payment. Use the calculator to experiment with different scenarios until you find the most suitable option.

Step 10: Consult a mortgage professional

While a home loan calculator can provide valuable insights, it's always a good idea to consult with a mortgage professional to discuss your options and ensure you have a complete understanding of the financial implications.

Buying a home is a significant financial commitment, and determining what you can afford is a crucial step in the process. A home loan calculator simplifies this task. By carefully evaluating the above factors, you can make an informed decision and choose a mortgage plan that aligns with your financial situation and goals. So, before you embark on your homebuying journey, take advantage of the valuable insights provided by a home loan calculator and ensure a more confident and stress-free decision-making process.

FAQs About Home Loan Eligibility Calculator

The ideal rate of interest varies from bank to bank and mainly depends on factors like type of property, customer’s credit score and occupation. It usually starts from 8.50% and can go up to 15% per annum in ideal scenarios. 

A co-applicant is any family member bound by marriage or blood including your spouse, father, son, unmarried daughter, and brother & sister (conditions apply). Distant relatives and friends cannot be co-applicant. 

Longer the loan duration, more the interest amount you pay. So if you can repay quickly, you save upon the interest amount.

There are several government-run and private banks along with government-approved housing finance companies that offer best housing loans in India at reasonable rates. You can check their home loan eligibility with various banks to crack the best deal.

Published on 12th June 2023