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How to Calculate Your Home Loan Eligibility? Tips for a Successful Housing Loan Application

Understanding your home loan eligibility is crucial for a successful housing loan application. This guide explores key factors affecting eligibility, essential tips for improvement, and highlights why Bajaj Housing Finance Home Loan is a popular choice.

HT Brand Studio
Published28 Oct 2024, 06:04 PM IST
Guide to Calculate Your Home Loan Eligibility with Bajaj Housing Finance Home Loan
Guide to Calculate Your Home Loan Eligibility with Bajaj Housing Finance Home Loan

Purchasing your dream home is a significant milestone but navigating through the home loan application process can be daunting. One of the most crucial aspects of applying for a housing loan is determining your home loan eligibility. Understanding this concept can increase your chances of securing a loan on favourable terms. Let us explore how you can calculate your eligibility and the features of Bajaj Housing Finance Home Loan that make it a great option.

What is home loan eligibility?

Your home loan eligibility refers to the maximum loan amount you can borrow based on your financial profile, including your income, existing liabilities, age, employment status, and credit score. Lenders use this to assess your capacity to repay the housing loan.

Knowing your eligibility beforehand helps you set realistic expectations and streamline your application process. Let’s explore some essential tips for calculating your home loan eligibility and making a successful loan application.

1. Assess your monthly income

One of the primary factors determining your home loan eligibility is your monthly income. Lenders typically consider your income to ensure you can repay the EMIs comfortably. Here’s a general rule: Your total EMIs should ideally not exceed 40-50% of your net monthly income.

Tip: Include all regular sources of income, such as salary, business profits, rental income, and any additional earnings.

2. Calculate the tenure of your loan

The tenure of a housing loan can significantly impact your eligibility. Longer loan tenures reduce the EMI amount, increasing your eligibility for a larger loan amount. However, this comes with higher interest over time, so choose your tenure wisely.

Tip: Use an online home loan eligibility calculator to estimate how different tenures affect your eligibility.

3. Evaluate your existing liabilities

Lenders look at your existing financial obligations like credit card bills, other loans, or EMIs. High existing liabilities can reduce your home loan eligibility as lenders might consider you a high-risk borrower.

Tip: Try to clear off minor debts before applying for a housing loan to boost your eligibility.

4. Maintain a high credit score

A good credit score (typically 725 and above) is essential for improving your home loan eligibility. It reflects your creditworthiness and payment history. A low credit score can lead to lower eligibility and higher interest rates.

Tip: Regularly check your credit score and resolve discrepancies, if any.

5. Account for age and employment stability

Lenders prefer younger applicants with stable jobs, as they have a longer working life and steady income. If you are older, the loan tenure might be restricted, reducing your home loan eligibility. Self-employed individuals may need to provide more substantial proof of their income and business stability.

Tip: If you’re nearing retirement, consider co-applying for the loan with a younger family member to improve your eligibility.

6. Consider the loan-to-value (LTV) ratio

The LTV ratio is the percentage of the property value that the lender is willing to finance through a home loan. Generally, lenders offer around 75-90% of the property value as a housing loan. If your savings can cover the remaining portion, it positively impacts your eligibility.

Tip: Having substantial savings for a down payment can make a difference in your eligibility and loan approval.

How to calculate your home loan eligibility?

Here’s a step-by-step guide to calculate your eligibility:

  1. Determine your net monthly income (consider all regular income sources).
  2. Subtract monthly obligations like other EMIs or regular financial commitments.
  3. Use a home loan eligibility calculator available to estimate the maximum loan amount you can avail of based on the above factors.

Using the home loan eligibility calculator for Bajaj Housing Finance Home Loan is easy. Simply input your city of residence, date of birth, monthly income, and monthly obligations, and you will see the home loan amount you are eligible for.

How Bajaj Housing Finance Home Loan can help you?

When choosing a lender, it’s crucial to consider various factors like interest rates, flexible repayment options, and value-added services. Bajaj Housing Finance Home Loan offers attractive interest rates, high loan amounts, and flexible repayment options tailored to your needs. Here’s why you should explore a housing loan from Bajaj Housing Finance:

  • Competitive interest rates: With competitive interest rates starting at just 8.50% p.a., you can save substantially on the overall loan cost.
  • Flexible repayment options: You can choose a tenure that suits your financial capacity, ensuring manageable EMIs.
  • Quick approval: Experience hassle-free documentation and quick loan approval, within just 48 hours* of application, for a seamless journey towards your dream home.

Conclusion

Understanding your home loan eligibility is the first step towards a successful housing loan application. By following these tips and using the tools at your disposal, you can set realistic expectations and increase your chances of securing a loan.

If you’re considering a home loan, don’t forget to explore Bajaj Housing Finance Home Loan for its customer-centric approach, competitive rates, and flexible options. 

Explore Bajaj Housing Finance Home Loan today and move one step closer to owning your dream home.

*Terms and conditions apply

Disclaimer: This article is a paid publication and does not have journalistic/editorial involvement of Hindustan Times. Hindustan Times does not endorse/subscribe to the content(s) of the article/advertisement and/or view(s) expressed herein. Hindustan Times shall not in any manner, be responsible and/or liable in any manner whatsoever for all that is stated in the article and/or also with regard to the view(s), opinion(s), announcement(s), declaration(s), affirmation(s) etc., stated/featured in the same. The article does not constitute financial advice.

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First Published:28 Oct 2024, 06:04 PM IST
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