Determine Your Housing Loan Eligibility With Just A Few Clicks

Availing of a housing loan is a major financial decision. It’s one of the most important steps to help you own your dream home. Before you do that, you need to be aware of certain financial factors to prepare for this investment. 

One such factor is your home loan eligibility. It’s easy to determine your eligibility using a home loan eligibility calculator – kotak. But several factors impact your eligibility. Knowing about them will help you to plan better. You can even improve your eligibility if the need arises.

Read on to learn how to check your home loan eligibility and the factors that can impact it. But first, let’s understand what loan eligibility is.

What Is Home Loan Eligibility?

Home loan eligibility refers to the criteria lenders use to determine a loan applicant’s creditworthiness. In other words, they use these criteria to analyse the borrower’s repayment capability. 

Once you know your eligibility, you can estimate the amount you can avail of as a home loan. 

How To Calculate Home Loan Eligibility

You can use an online housing loan eligibility calculator to calculate your home loan eligibility. Once you access the online calculator, you will have to fill in certain details. These can include your net monthly income, loan tenure, rate of interest, etc.

Based on your data, the calculator will make calculations and provide you with the loan amount. This amount will be your home loan eligibility.

Factors That Can Affect Your Home Loan Eligibility

Banks and financial institutions determine the home loan eligibility of a loan applicant based on certain factors. These factors may vary from one lender to another.

Some of the major factors that can impact your loan eligibility are as follows:

  • Age

Your age is one of the top aspects considered by lenders to calculate your eligibility. It helps to determine the tenure of the home loan. 

It, in turn, decides your home loan EMI. The shorter the loan tenure, the higher the EMI and vice versa.

  • Credit Score

Lenders’ credit score is essential in judging your ability to repay the loan. For this, they usually consider your CIBIL score. 

A lender may reject your loan application if you have a low CIBIL score. Some lenders may offer you the loan at a higher interest rate.

  • Income

Lenders consider your monthly income to determine the EMI commitment you can take on. In this regard, they even consider your source of income and how stable it is. To get a clearer picture of your potential EMI commitments based on your income, you can use tools like the home loan EMI calculator – Kotak, which provides accurate estimates tailored to your financial situation.

  • Other Loan Commitments

If you have any existing loan, it can impact the eligibility for your home loan. Usually, lenders consider your existing EMI amount part of your monthly outflow. They deduct this amount and then determine your EMI from the remaining amount.

  • Debt-To-Income Ratio 

The debt-to-income ratio is a measure of your repayment capacity. Lenders calculate this ratio as a percentage by dividing your net monthly debt payments by your net monthly income.

How To Increase Your Home Loan Eligibility?

If your home loan eligibility is lower than your requirement, it may prevent you from getting the right loan. However, you can improve your eligibility to get the desired amount as a loan.

Here are a few ways to improve your home loan eligibility:

  • Apply With A Co-Applicant

You can apply for a joint home loan. Make your earning spouse or another family member a co-applicant for the loan. It will enable your lender to consider the income of your co-applicant, leading to an increase in your loan eligibility. 

  • Repay Existing Loans

If you have an existing loan for which you are paying EMI, repay it. It is best to close your existing loan before you submit the documents required for a home loan.

Bottom Line

Having a clear idea about your home loan eligibility is important. It will help you to know the amount you can expect as a loan. You can consider improving your eligibility if this amount is lower than your need. So, calculate your loan eligibility using one of the online home loan eligibility calculators.

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