How much Loan am I eligible for?

To be eligible to a home loan depends upon a few factors like your monthly income, credit score, credit history, your age at the time of getting the loan, retirement age and other financial obligations etc. Applying for a home loan might not seem to be a difficult task, but getting it sanctioned is surely tricky. Housing loan eligibility is mainly dependent on your income and repayment capability.

The following affect the housing loan eligibility criteria-

1. Higher CIBIL score will enable loan at lower rates of interest. Try to keep it above 700.
2. Higher income gives a more stable impression and hence more will be the chance of getting a loan. The lender needs to be sure about the timely payment of EMIs. In case of majority of banks, the minimum salary/income requirement to apply for a loan is Rs.25,000 per month.
3. If income is high, the duration of the loan can be curtailed. Both present and future income of the applicant has a significant impact on determining the loan amount as well as other factors. If you have a sustainable income base, the lender will be convinced to allow the repayment of the same earlier than the tenure of loan.
4. The prior record of loans that you availed of gives a better confidence to the lending institution or bank. Any default on your part to pay financial obligations could impair your credit score. It affects all future loan eligibility.
5. The age of the applicant is important as maximum loan term is capped at 30 years. Age limit ranges from 18 to 70 years depending upon the bank/financial institution you choose, for both salaried and self-employed individuals.

How to increase the home loan eligibility criteria?

• Ensure a stable income, regular savings and investment pattern.
• Add an earning family member as a co-applicant.
• Repayment of ongoing loans and other financial obligations on a regular basis.
• Keep a track of your variable salary components.
• Take care of defaults affecting your credit score.
• Provide the details of your additional income.
• Availing of a structured repayment plan.

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Krishna Rath is a SEBI Registered Investment Adviser, and since 2015 has been educating netizens on investments and insurance. Krishna is a fee only SEBI RIA and is Odisha's first SEBI RIA. With background in IT, Krishna is changing the advisory space with new innovations in AdvisoryTech.

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