In today’s world, almost everyone opts for a home loan when it comes to buying a house. Bankbazaar allows you to calculate the home loan eligibility at ease.
The steps to find out your eligibility towards a particular home loan product are mentioned below:
After completing all the steps above (as per your type of employment), follow the next steps:
Similarly, when you choose other types of employment like Student, Retired or Homemaker, you need to follow the steps displayed on the screen to calculate home loan eligibility.
When you click on ‘View FREE Offers’, you will get to know about all the home loans that you are eligible for. Compare all of them and then choose the one that is the best for you.
Chandra Patra is an employee of a leading company in India. His salary break up is mentioned below:
Let us consider that Chandra has no loans or liabilities at present and his net available income is Rs.1,03,400. However, you one must always remember that Leave Travel Allowance is not taken into consideration by the bank while calculating the salary. The medical allowance is also excluded from the calculation. This is because, these expenses are not derived by an individual with his/her salary. In this case, Chandra will only get these amounts as reimbursements, in case he spends on medical needs or travel requirements.
Thus, the bank or the lender will deduct that LTA and medical expenses from the net income. Chandra’s net income now stands at Rs.1,03,400 – Rs.(9,000 + 2,000), which is equal to Rs.92,400. Thus, the loan eligibility for Chandra Patra stands at Rs.92,400 x 60 = Rs.55,44,000 In case of a home loan, EMI is restricted to a maximum of 40% to 50% of the net income (monthly) by most banks. This suggests that you are eligible for a home loan where the equated monthly instalment is not more than 50% of your monthly income
|Age||Minimum: 18 yrs. Maximum: 70 yrs. (depending on type of employment)|
|Minimum Net Annual Income||Rs. 5 - 7 lakhs depending on type of employment, EMIs offered up to 50% of net income, on average|
|Type of Employment||Salaried, Salaried Professional, Self Employed Business, Self Employed Professional, Student, Retired, and Homemaker|
|Status of Employment||Regular: at least 1 yrs. in current job/business/profession.; at least 2 yrs. of prior employment|
|Type of Residence||Owned/ Rented|
|Status of Residence||At least 1 yr. at current place of stay|
|Credit Rating||Good rating as per recognised credit bureau|
|Type of property being purchased||Affects loan amount eligibility|
Supporting documents vary according to lender requirements:
1) Age: Age is the first and foremost factor a lender/ financier considers when one applies for a housing loan. Normally, financial institutions attempt to limit the house loan term to the primary applicant's age of superannuation. This means young professionals (20s and early 30s) can avail a loan with a term of up to 25 years with no trouble. But older applicants especially those beyond 40 can find it a tad tough to be eligible for an extended tenure. Many a time, single applicant aged 50 and above were denied home loans purely on this basis.
2) Income: Let us categorize this into salaried, professional and self-employed. Whichever category the applicant falls into, a steady and regular source of income is must. Basically, there are fewer risks in loaning money if the applicant is an earning individual.
3) Rate of Interest: Home finance eligibility is always inversely proportional to the rate of interest. If the rate is more, eligibility will be less and vice-versa.
4) Loan Term: If you opt for a longer tenure, your eligibility will improve. EMIs too will lesser and manageable. But the downside to this is, you will end paying more interest.
5) Outstanding Loan(s): Indian banks and financial institutions always recommend keeping the EMI to Income Ratio between 50 or 60 percent. This is to leave window for future loans or to pay of existing loans if any. But unsettled loans could be a great damper on your eligibility.
6) CIBIL Report: Banks also scrutinize your credit repayment history from CIBIL (Credit Information Bureau India Limited), which is country's regulator and first credit information bureau. They keep detailed records of every info regarding credit history relation between you and lenders/ creditors. A negative entry can bring down your eligibility significantly.
Eligibility is not an easy thing to assess. The banks and lenders will be considering your present liabilities, income, assets, etc. while calculating your home loan eligibility. In case the mortgage requirement is slightly higher that the eligible loan amount, some changes in the way you present yourself can help in increasing the eligibility factor. Tips to increase your eligibility for a home loan are mentioned below:
There are several factors that are considered by banks or lenders to determine if you are eligible for a loan. These factors are mentioned below:
Yes, your parents, children and spouse are considered eligible for being co-applicants for the home loan.
Yes, you can avail tax benefits when you take home loan from a bank or a financial institution under Section 80C and Section 24 under the IT Act.
In case you have a poor credit score, it will be difficult for you to get a home loan. Banks or financial institutions consider your credit report to be of great value while determining your eligibility towards a loan. If you have a good score, banks will be happy to offer you a home loan with attractive rates of interest. However, with a bad score lenders will doubt your repayment capability and might not consider you to eligible for a home loan.
While applying for a Home Loan, there can be a lot of confusions with regard to your EMI Payments. However, technology has made it easier for borrowers and potential borrowers to now use the EMI calculator to accurately calculate the EMI one has to pay after availing a particular loan. By simply entering a few details about your loan tenure, loan amount, interest, etc., the EMI calculator will be able to accurately assess your EMI payments.
Read on to know more about: Click Here
While applying for a Home Loan, there can be a lot of confusions that arise with regard to your EMI Payments, tenure, eligibility, etc. However, technology has eased this process for borrowers and potential borrowers. They can to now use financial calculators to accurately calculate the EMI one has to pay, your eligibility, interest, amongst other factors. By simply entering a few details about your loan tenure, loan amount, interest, etc., financial calculators accurately assess your loan details.
Read on to know more about: Click Here
The department of law, justice and parliamentary affairs recently increased the travel allowance and housing loan limit for lawmakers in the country. This decision was made after increasing their salaries and after considering the money left to be spent in the Constituency Development Fund (CDF). According to the new rule, lawmakers and any member of his/her family can utilise travel allowance upto Rs.1.5 lakh in one financial year. Similarly, the motor car loan limit for lawmakers have also been increased to Rs.10 lakh which was Rs.5 lakh previously.
The housing loan limit has been raised to Rs.10 lakh from Rs.5 lakh. If a lawmaker does not avail a car loan, then the borrower can avail a housing loan upto Rs.20 lakh provided he provides a letter from the concerned authority. If you are planning on availing a home loan, try one of the many online home loan eligibility calculators to determine your eligibility.
4th December 2017
Since State Bank of India reduced their Marginal Cost of Lending Rates(MCLR) by 5 basis points few days ago and claimed them as the cheapest home loan providers in the country, many banks and financial institutions have been following the trend to gain the title. Bajaj Finserv, one of the leading Indian company that offer a wide range of financial services has recently announced that in their limited period offer, they are offering the lowest interest rates on home loans and home loan balance transfers.
Home buyers can now expect an interest rate of 8.30% p.a. For home loan value above Rs.30 lakh. They also stated that currently, this is the lowest interest rate on home loans offered in the country. Bajaj Finserv is also offering a very high top-up loan for home loan customers upto Rs.50 lakh which can be used for any purpose like renovation, holiday, or wedding. This offer is valid for all new and old home loan customers who are looking to avail a home loan or transfer their existing home loan from 23 November 2017 to 29 November 2017.
To check if you are eligible for a Bajaj Finserv home loan, use an online home loan eligibility calculator.
29th November 2017
NBFC Cholamandalam Investment and Finance Company under Murugappa Group’s is known for for vehicle finance business. N Srinivasan, Executive Vice-Chairman and Managing Director who was recently appointed stated in an interview that they are now focusing on building a pure home loan portfolio. The current home loan portfolio size ranges from Rs.600 to Rs.700 crore. He further stated that currently they are lending to few affordable projects and the average ticket size is between Rs.15 to Rs.20 lakhs. They are going to focus on expanding home loan segment to potential borrowers.
With over 700 branches, they are confident that they will succeed in the home loan industry. If you are planning to avail a home loan, do your research and compare various home loans before you finalize on one. You can also check your home loan eligibility using an online home loan eligibility calculator before applying for a loan. This way, you can negotiate better.
17th November 2017
State Bank of India, the leading public sector bank in the country made their home loan customers happy by reducing their interest rates by 5 basis points. Currently, their interest rate stands at 8.30% p.a. The bank also claims that this is the lowest interest rate in the market as of now. So, if you are thinking of taking a home loan, here are few smart ways that you can follow to get the best deal.
Remember that you can negotiate the interest rate. Most of us think that the interest rate offered by the bank is the final offer. However, that is not the truth. Please use a home loan eligibility calculator to check if you qualify to apply for a loan. Once you know the loan amount you are eligible to receive, you can go ahead and negotiate the interest rate with the bank.
Compare various home loans before applying for one. There are many websites like BankBazaar that allow you to compare various home loans. Use one of these websites and check your eligibility using an online home loan eligibility calculator. Do not be in a hurry.
14th November 2017
Pre-festive season, the market regulator SEBI (Securities and Exchange Board of India) has postponed the implementation of its bad loan directive ‘until further notice’ . This news has come up as a big relief for all the listed companies. In response to this, top-notched banks of the nation have come up with attractive home loans. In fact, they have decided to cut their interest rates.
State Bank of India, Bank of Borada and Andhara Bank are few of the public sector banks to take the initiative. Even private bank like ICICI has bought in a new home loan product. The scheme offers the benefit of 1% cashback on every EMI to every borrower, for the entire tenure of their loan.
19th October 2017
Going as per rating agency Icra, 5 housing finance companies (HFC) lend up to 78% of home loan today. The two big shots are HDFC and LIC, with each having an asset of over Rs.1 Lakh. The other three HFCs are DHFL, Indiabulls and PNB HFL, having a combined market share of 21%. While each one has an asset of Rs. 15,000 to 50,000 crore.
The housing finance market is quiet fragmented in India. Since 2015, 25 HFCs have been set up to gradually change the scenario. However, the move might increase the risk of slippages and laxity in underwriting standards. With new companies coming in HFCs share is growing at a rapid pace and it is in a position to compete with commercial banks. HFCs share that was 33% in March 2012 is 37% in March 2017, whereas commercial banks share has dropped to 63% from 67% previously.
16th October 2017
The increasing bad assets may push the National Housing Bank to cap the loan amount disbursed by the housing finance institutions in India. Chairman of NHB, Sriram Kalyanaraman stated that home loans against properties is a real threat in case of high-value loans and commercial property. The banks find it difficult to possess the house and resell it at the market price as the value of the property quotes on papers may not be the same in the market.
The banks are advised medium-sized home loan companies to be careful as they will be the first one to suffer if the market condition goes wrong. Kalyanaraman further stated that when a bank lends to an individual, the emotional attachment is high for the buyer. Thus, the borrower will make prompt payments. However, when it comes to builders and commercial properties, this emotional attachment is very low. This would make them default on their home loan easily.
4th October 2017
The current sluggish real estate market has not been impacted by the recently introduced Goods and Service Tax (GST), says Keki Mistry, VC and CEO of HDFC. Even Real Estate Regulatory Act (RERA) leaves no impact. The demand for new houses and housing credit continues to rise and is coming from all parts of the country. The average loan size stands at 26 lakh similar to the previous year. The market is doing well in big cities such as Mumbai, Bangalore and Pune, he adds. In July and August, the launch of new projects were slow due to RERA. There are many ready-to-move-in projects that cannot be interrupted as not registered under RERA. Interruptions in the housing market have no long-term effects, he further mentions.
27th September 2017
The Household Finance Committee that studies various aspects of household finance has recommended that banks use the repo rate and not the marginal cost of funds based lending rates (MCLR) while setting interest rates for home loans. According to the committee, this helps borrowers easily compare home loans of different banks.
Furthermore, the committee had said that a fixed reset period of one month must be set for floating loans. With regard to MCLR, the rates applicable on the first disbursement remains the same till the next reset date, notwithstanding any changes in the policy.
8th September 2017
Many banks have started offering great deals on loan products after the Ganesh Chaturthi. From deals on home and car loans to discount on processing fee on gold and personal loan, many banks are also offering deals on their credit cards. While under Shubh Aarambh Home Loans, Axis Bank is offering a waiver of 12 EMIs on home loans up to Rs.30 lakh, other lending institutions are offering EMI waivers at the end of 4th, 8th and 12th year of the loan tenure (applicable for first time home buyers who pay their EMIs regularly). For car loans, State Bank of India (SBI) is waiving off the complete processing fee for loans booked before 31 December 2017. SBI is also offering a significant amount of waivers on gold loan and personal loan processing fee. There are other banks such as Punjab National Bank and ICICI Bank which are also offering waivers for various loan products.
1st September 2017