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How to Calculate Home Loan Eligibility In a Few Steps

home loan

One of the major decisions in one’s life is purchasing a home. However, this means that the buyer needs to make a substantial investment. Many aspiring homebuyers choose to opt for a housing loan to buy a dream home. If a buyer is availing of a home loan to fund the purchase of a house, then they should do a comprehensive research. It is vital to know the most appropriate lender, home loan interest rates, and calculate home loan eligibility. Different lenders have specific benchmarks regarding the approval and disbursement of loans. 

Home Loan Eligibility Criteria to Avail a Housing Loan in India

Home loan is available for salaried, professionals, and self-employed individuals in India. However, the parameters are slightly different for each category. 

  • Salaried Individuals: This includes individuals who are in permanent service with the government or other reputed companies. Applicants must be more than 23 years of age at the time of commencement of the loan. Also, it should be till the age of 62 years or superannuation, whichever comes first at the time of maturity of the loan.
  • Professionals: Professionals like engineers, doctors, architects, cost accountants, chartered accountants, and management consultants can avail of home loans. Applicants need to be more than 21 years of age at the time of home loan commencement. Also, it should be till the age of 65 years or less at the time of maturity of the home loan. 
  • Self-employed Individuals: Any individual who files income tax returns may apply for a home loan in India. Applicants should be more than 25 years of age at the time of home loan commencement. Also, it should be till the age of 70 years or less at the time of maturity of the home loan. 
Age requirement for salaried borrowers23 to 62
Age requirement for self-employed borrowers25 to 70
CIBIL scoreMinimum 750
Work experience for salaried borrowersMinimum three years
Business continuityMinimum five years
Minimum salaryRs 25,000
NationalityResidential Indian

Factors That Determine Home Loan Eligibility

  • Age: Home loan eligibility relies on age. The ability of a young home loan applicant to pay back a loan would be different from that of a retired or middle-aged person. The home loan sanction is also made considering how many years of employment are left until retirement.
  • Employment Status: The borrower’s employment status is as important as their income. If the borrower is employed at a reputed enterprise or is a self-employed individual, then the lender is more likely to offer a sanction to them than to the one with an unstable job.
  • Credit score: The history of the credit profile and current credit score gives clarity to the lending institution. It allows understanding the borrower’s repayment capabilities. 

The lowest housing loan interest rate 

For salaried individuals:

TypeRepo rate ­+ SpreadEffective Rate of Interest
Floating RateRepo rate +2.75% to Repo rate + 3.10%6.75% – 7.10% p.a.
Fixed RateAll loan amounts12%

For Professionals and self-employed individuals: 

TypeRepo rate + SpreadEffective Rate of Interest
Floating RateRepo rate + 2.90% to Repo rate + 3.20%6.90% – 7.20% p.a.
Fixed RateAll loan amounts12%

Home Loan Eligibility Calculator 

A home loan calculator makes the task of checking if one is eligible for a home loan a hassle-free task. It also helps calculate the equated monthly installments (EMIs). This calculator helps to know the monthly outflow concerning the home loan taken by giving an appropriate figure. 

There are two ways to calculate the amount of EMI. One is by using a home loan calculator. 

Second, they can use a formula to calculate the EMI on a home loan. The mathematical formula for the same is:



  • P represents the principal or the amount of the loan.
  • N represents the number of installments.
  • R represents the rate of interest.

Reasons to Calculate Home Loan Eligibility

  • By calculating home loan eligibility, a borrower known if they can afford such a commitment in the long term
  • It helps decide on the most appropriate loan amount, lowest housing loan interest rate, and tenor
  • It provides the flexibility to increase or decrease the loan amount to check the most comfortable EMI outflow before availing of a home loan
  • It prepares the borrower and helps plan their finances ahead of time

It is, thus, advisable to use a home loan eligibility calculator before availing of a home loan. 

Concluding Thoughts

Buying a home is a big-ticket purchase and, of course, a big decision. Hence, it is prudent to take time to check their home loan eligibility and weigh available options. A borrower must educate themselves about the market, purchase requirements, and overall process so that they know what to expect from a home loan.

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