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Home Loan Eligibility Calculator
A Home Loan, in this day and age, is the need of the hour. Because of the rising property prices in the country, owning a home is next to impossible without any external financial help.
Now that the idea of taking up a Home Loan is decided, the next step to do is determine whether you are eligible for a Home Loan, and what is the maximum amount you can obtain from the Bank.
That’s when Fincity’s Home Loan Eligibility Calculator can come to the rescue; it can calculate, and provide an individual, exactly how much Loan Amount they are eligible for and what the monthly payment structure might look like just by taking a few basic details as input.
What does Home Loan Eligibility mean?
Home loan eligibility is basically a set of conditions based on which a financial institution analyzes and determines the credit-worthiness of a customer to avail and then repay a particular amount of loan. The eligibility of a Home loan depends on a variety of factors such as age, financial position, credit history, credit score, other financial obligations etc.
Calculation of Home Loan Eligibility
Primarily, the eligibility for a Home Loan is derived on 2 basic criteria – the applicant’s monthly income and their repayment capacity. But there are a few other factors that come in play in deciding whether the applicant is eligible for a Home Loan or not.
Here are few conditions that a borrower needs to meet to get an HDFC Home Loan:
HDFC Home Loan Eligibility Criteria
Improve Home Loan Eligibility
The home loan eligibility of an individual can be enhanced by
Factors Impacting Home Loan Eligibility
Your eligibility for a Home Loan is influenced by a certain number of factors decided by the lender. Here are the key ones:
Credit Score:
This is an important factor that determines your eligibility for a Home Loan. A good credit score reflects disciplined credit behavior in the past while a bad credit score reflects that you have not been responsible with past debts. Make it a point to pay your bills and EMIs regularly to have a higher chance of Home loan approval. 700 and above is considered a good score.
Income:
This indicates your repayment capacity and is taken into account by the lender. A higher income is likely to get you a lower interest rate and even a higher loan amount.
Debt-to-Income:
A lender looks into your Debt-to-Income ratio, i.e., the ratio of your cumulative debt to your total income. A lower debt translates to a higher repayment capacity and is preferred by the bank. To be eligible for a Home Loan, the DTI ratio of a borrower should not cross 50%.
Age:
A higher number of service years remaining means more time to earn and repay the loan. Therefore, lenders prefer a younger borrower over someone who is close to retiring. Even if an older borrower gets a Home Loan, they will be eligible for a shorter tenure.
Business or Job Stability:
Applicants having a stable job with a regular source of income are considered good candidates for a Home Loan. Continuous work experience with a regular income indicates that the borrower can make timely EMI payments.
Employer and Profession Type:
Lenders prefer to offer Home Loans to applicants working with a reputed organization over borrowers employed with a smaller company. Also, salaried borrowers are likely to get a Home Loan more easily than self-employed individuals. This is due to their stable monthly income.
Property Characteristics:
When you apply for a Home Loan, they will assess certain features of the property such as its age, title and location. If it’s outside the bank’s listed locations, is too old or is under dispute, the bank is likely to reject your Home Loan application.
How to Use the HDFC Home Loan EMI Calculator by Fincity?
You can calculate your home loan EMI almost instantly using the Home Loan Calculator. It is precise and easy to use for anyone. This calculator for Home Loan EMI might require just a few key home loan details from the user to display results.
Here’s an easy guide on how to use the home loan EMI calculator:
Step 1:
Input the loan amount you wish to borrow.
Step 2:
Input the applicable interest rate for the home loan.
Step 3:
Input the tenure over which you will be able to repay your home loan.
As soon as you complete the above steps, your home loan eligibility will be displayed along with other details such as total amount you can avail and also the monthly EMI payable.
Documents Required for a Home Loan
To be eligible for an HDFC Home Loan, your application needs to be supported by the right documents. Co-ordinate with the lender to make sure you submit all the necessary documents. Below is a basic list of Home Loan documents required by the bank.
1. KYC Documents: ID & Address Proof (Any One Required)
2. Income Documents
For Salaried Individuals
For Self Employed Professionals
For Self Employed Non-Professionals
3. Property Documents
Home Loan – Definition
A home loan is where you can borrow money needed by you to buy a home from banks like HDFC Bank. Usually, the loaned amount will be an approximate 80% – 90% of the value of the home. They will charge you an interest percent for the loan amount which the you will have to pay along with principal borrowed in a monthly EMI form.
The money borrowed for home loans is high, therefore the EMI each month will also be high. To help customers get an estimate of how much EMI they will pay for any interest rate, tenure and loan amount HDFC Bank provides home loan EMI calculator.
The property is mortgaged to the lender as a security till the loan is fully repaid.
EMI Calculation Formula
Generally, the EMI for a Home Loan is calculated using the given formula:
E = P * r * (1+r) ^ n / ([(1 + r) ^ n] – 1)
In the formula mentioned above,
E = Equated Installment
This is the total obligations required to pay per month
P = Amount of Loan
This can be anywhere between Rs.15,00,000 to Rs.5,00,00,000
r = Rate of Interest
This means the interest rate per month. For Axis Bank, this ranges from 6.9% to 8.30%
n = tenure in months
Usually, the tenure for a home loan ranges from 15 years to 30 years.
For Axis Bank Home Loans, the tenure ranges from 60 months all the way up to 360 months or 30 years.
Home Loan EMI can be calculated using an online Housing Loan Calculator which takes into account many factors like loan amount, interest rate, and the tenure or duration for which you are planning to avail the loan.
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