Home Loan Eligibility

Check maximum loan amount • Income-based eligibility

Home Loan Eligibility

Loan
%
Years

Eligibility Breakdown

About Home Loan Eligibility

Home loan eligibility is the maximum loan amount a bank will sanction based on your income, existing obligations, credit score, age, and property value. Banks use FOIR (Fixed Obligation to Income Ratio) to determine this.

Factors Affecting Eligibility:

  • Monthly income (higher = more eligible)
  • Existing loan EMIs (lower = more eligible)
  • Credit score (750+ preferred)
  • Age (younger = longer tenure options)
  • Employment stability (2+ years preferred)

How Eligibility is Calculated

Eligibility Formula:

Eligible Loan = (Income × FOIR% - Existing EMI) × Multiplier

FOIR: 50-60% (salaried), 40-50% (self-employed)

Multiplier: Depends on tenure & rate (~100-120)

Example: ₹1L income, 50% FOIR, ₹10K existing EMI

= (₹1L ×50% - ₹10K) × 111 = ₹44.4L eligible

Key Insights

💰 FOIR Optimization

Closing a ₹15K personal loan EMI can increase home loan eligibility by ₹15-18 lakhs! Always clear smaller loans before applying.

👥 Co-Applicant Power

Adding spouse earning ₹50K can boost eligibility from ₹50L to ₹80L - a 60% increase! Both can claim tax benefits too.

📊 Credit Score Impact

Improving score from 700 to 750 can increase eligibility by 10-15% AND reduce interest rate by 0.5-1%. Worth the effort!

Did You Know?

🏦 Bank Variations

Different banks have different FOIR limits! HDFC may offer 50%, while SBI offers 60%. Apply to 2-3 banks to find best eligibility.

📈 Loan-to-Value Ratio

Banks sanction max 75-90% of property value. For ₹1Cr property, max loan is ₹75-90L. Rest needs down payment. Calculate both property % and income-based limits.

🎯 Hidden Income

Rental income, freelance earnings, investments can boost eligibility by 15-20% if properly documented with IT returns!

Frequently Asked Questions About Home Loan Eligibility

Eligibility = (Monthly Income × FOIR - Existing EMIs) × Loan Multiplier. FOIR (Fixed Obligation to Income Ratio) is typically 50-60%. Loan multiplier depends on tenure and rate. Example: ₹1L income, 50% FOIR, no existing EMI, 20-year tenure @ 9% = ₹50K × 111 = ₹55.5L eligible loan.
FOIR is the percentage of your income banks allow for ALL loan EMIs combined. Usually 50-60% for salaried, 40-50% for self-employed. If income is ₹1L and FOIR is 50%, maximum total EMIs (including existing ones) can be ₹50K. Banks reserve remaining 40-50% for your living expenses.
750+: Best rates (8-9%), maximum eligibility, quick approval. 700-749: Moderate rates (9-10%), standard eligibility. 650-699: Higher rates (10-12%), reduced eligibility, detailed scrutiny. <650: Difficult approval, very high rates or rejection. Improve score before applying - even 50 points improvement can increase eligibility by 10-15%!
Yes! (1) Add co-applicant (spouse/parent) to combine incomes, (2) Close/prepay existing loans to free up FOIR, (3) Choose longer tenure (25-30 years) to reduce EMI, (4) Improve credit score to 750+, (5) Show additional income sources (rent, freelance), (6) Apply to banks with higher FOIR limits (some go up to 65%).
Joint loan combines incomes but also combines existing obligations. Example: You earn ₹80K, spouse ₹60K = ₹1.4L combined. Individual eligibility ₹40-45L each, but joint can be ₹80-90L! Additional benefits: (1) Both claim tax deductions, (2) Lower interest rates, (3) Higher approval chances. Ensure both have good credit scores.
Existing EMIs directly reduce eligibility. If FOIR is 50% and income is ₹1L, you have ₹50K for all EMIs. If car loan EMI is ₹20K, only ₹30K left for home loan →home eligible reduces by 40-50%! Strategy: Close small loans (personal, credit card) before applying for home loan to maximize eligibility.
Salaried: (1) Last 3-6 months salary slips, (2) Last 2 years Form 16, ( 3) 6 months bank statements, (4) ID/address proof, (5) Property documents. Self-Employed: (1) Last 2-3 years IT returns with computation, (2) Last 2 years audited financials, (3) 12 months bank statements, (4) Business proof, (5) Property documents. Higher income proof = higher eligibility!
Short-term (1-3 months): (1) Prepay small loans, (2) Add co-applicant, (3) Apply to multiple banks, (4) Choose longer tenure. Long-term (6-12 months): (1) Improve credit score to 750+, (2) Increase income through promotion/job change, (3) Build 6-month salary history at current job, (4) Save for higher down payment (20-25% instead of 10-15%).