One fine morning, my friend Ganesh woke up only to hear his wife’s scream over the emotional and mental trauma she and other family members were going through being a tenant. Ganesh did all his bit to pacify her but to no avail. She was adamant on having an own home and so Ganesh had no option but to honour her request.
So, he started searching a property and found one to buy. He immediately made an online application for a home loan. Even though the loan application got approved, the quantum of finance was sharply lower than what Ganesh had anticipated, keeping his home dream in the doldrums. He also feared of the backlash with her wife when she gets to know the incident. However, you can be free of that dreadful drama by switching on the home loan eligibility calculator.
It may not guarantee an entry into your dream home. But you can at least be sure of the loan amount you can receive using the calculator. This will help plan an entry to your dream home. So, what the home loan calculator does and consider can be read in this article.
Function of Home Loan Eligibility Calculator
The calculator is adept at assessing your feasibility for a loan taking into account your income, savings and repayment potential. The good thing is that you can find the calculator online, making it all the more easy for you to check your loan eligibility. Let’s take the help of an example below to get an idea of the calculator.
Example – Ramesh Bansal is a senior software engineer in a mid-sized firm. He earns ₹1 lakh and saves around ₹60,000 a month. So, what the calculator does initially is to compute per lakh EMI based on interest rate and tenure. The calculation of the EMI is followed by the computation of the maximum loan amount. Let’s calculate per lakh EMI based on the following variables.
Loan Amount – ₹1 Lakh
Interest Rate – 8.50% (Assumed)
Tenure – 30 Years
Per Lakh EMI – ₹769
Maximum Loan Amount = 1,00,000 x savings/per lakh EMI
= 1,00,000 x 60,000/769 = ₹78.02 lakh (Approx.)
Loan to Value Ratio
The extent of home finance is limited to 70%-90% of the property cost. So loans up to ₹30 lakh invariably see a 90% finance. Anything above ₹30-75 lakh will see 80% finance on an average. And when the loan amount exceeds ₹75 lakh, the extent of finance reduces to 75%.
Home Loan Eligibility SBI
Everybody’s favourite bank for a home loan would be State Bank of India SBI! With an extensive network of branches that total to over 25,000 in India, SBI has become the mass favourite. The public lender has, however, put forth a list of conditions one must meet to get a home loan. Wanna know the conditions? Take a look below.
- Both salaried and self-employed can be eligible for a home loan, though conditions for them can differ.
- Salaried must be a minimum of 18 years at the time of loan application. On the other hand, a self-employed should be at least 21 years while applying for a loan.
- The age of both the salaried and self-employed must not exceed 70 years at the time of proposed loan maturity.
- The minimum income requirement is ₹1.8 lakh a year
- The work experience for a salaried should be a minimum of 2 years. In contrast, self-employed must have been in the business for at least 3 years.
Axis Bank Home Loan Eligibility Calculator
Axis Bank has also specified a list of conditions an applicant must meet to get a home loan. Ready to hear those? Here they come!
- Salaried must have a minimum age of 21 years and should not be above 60 years or superannuation whichever is earlier at the time of loan maturity. If you look at the case of self-employed, they must be at least 21 years old at the time of application. Their maximum age should not exceed 65 years at the proposed loan maturity.
- Though the bank has not specified minimum income for a home loan, you should earn reasonably higher to pay off the proposed EMIs.
I hope you have understood the function of home loan eligibility calculator by now. Keep using it to assess your eligibility for a big ticket purchase. Don’t apply for a home loan in a hurry as it’s the matter of 20-30 years of repayment. Anything in a haste can bring troubles.
So, choose a property that you are not only eligible to buy on a loan but also find it easy to repay the installments which are going to be the case later on.