Investing in a home is a significant financial decision that requires careful consideration. It is an exciting milestone with its fair share of challenges, particularly when you are trying to understand your borrowing and repayment capacity.
With a Home Loan eligibility calculator, you gain a better insight into your affordability by analysing key variables, such as your interest rate, credit score, property type, Loan duration, and any existing EMIs and down payments. This tool lets you quickly assess different scenarios and make informed decisions.
How to use it?
- Choose a reliable website
Start your planning by researching online for a reputed website offering a Home Loan calculator. Many banks offer these tools for free. Choose a reliable one which provides accurate results.
- Enter the required Loan amount
Determine the amount you plan to borrow from the bank. The figure should reflect your budget and the down payment you can afford. Input this amount into the calculator.
- Choose the Loan term
The Housing Loan term is the number of years you plan to repay the borrowed sum with interest. The common duration is 15 to 30 years. Consider your financial goals and select a repayment tenure aligning with your plans. Enter this term into the calculator.
- Enter your age and gender
Next, you need to input your age and gender. Your age plays a major factor in determining the loan amount as it helps you know the repayment tenure and approximate financial status. Some websites may also ask you to enter your city, as the interest rates differ between towns and metropolitan regions.
- Confirm your occupation
The bank would also want to know your income sources and whether you are a salaried or self-employed professional. You can also clarify the mode of payment.
- Mention your annual income
Fill your annual income after all PF, medical, and tax deductions. For businesspersons, the total take-home minus the expenses is considered reliable. If there is a co-applicant, mention their annual income as well. Applying for a Loan with the help of a co-applicant can enhance eligibility.
- Current monthly EMIs
Some websites also ask you to enter your ongoing payments every month, and the Loan amount differs based on that. Consider including the regular bills, such as groceries, utilities, and debt payments, including Car Loans, Student Loans, and Credit Card balances.
- Submit the details
Once entered all the necessary information, the Home Loan eligibility calculator gives you an estimated Loan amount offered by several banks. It will give you a clear picture of what you can afford. Take time to review and analyse the results, considering different scenarios if needed.
Conclusion
While the Loan calculator can provide valuable insights, it is always a good idea to consult with a professional to discuss your options and ensure you completely understand the financial implications of borrowing.
