Home Loan Eligibility
Lenders check if you qualify for a home loan by looking at factors like your age, credit score, monthly income, and credit history. Keep reading to learn about the home loan eligibility rules set by India’s leading lenders and discover tips to improve your chances of approval.
How is Home Loan Eligibility Determined?
Your eligibility for a home loan is mainly calculated based on your income, your ability to repay the loan, and the value and features of the property you are pledging. Lenders also consider other factors like your credit score, age, type of job or business, stability in your profession, and your employer’s reputation. These factors help lenders decide if you qualify for the loan and how much you can borrow.
Home Loan Eligibility by Top Banks and Housing Finance Companies
| Lenders | Age | Interest Rate (p.a.) | Tenure |
|---|---|---|---|
| Axis Bank | 21 years - 65 years | 8.75% - 13.30% | 30 years |
| Bank of Baroda | 21 years - 70 years | 8.15% - 10.65% | 30 years |
| Bank of India | 18 years - 70 years | 8.25% - 10.85% | 30 years |
| HDFC Bank Limited | 18 years - 70 years | 8.70% onwards | 30 years |
| ICICI Bank | 21 years - 65 years | 8.75% onwards | 30 years |
| Kotak Mahindra Bank | 18 years - 65 years | 8.75% onwards | 25 years |
| LIC Housing Finance | 18 years - 65 years | 8.50% onwards | 30 years |
| Bajaj Housing Finance | 21 years - 70 years | 8.25% onwards | 32 years |
NOTE: Interest rates as of 27 February 2025
Home Loan Eligibility Criteria
Lenders consider several key factors to determine home loan eligibility. These include the applicant’s age, credit score, income level, type of job or business, stability in employment or business, and ability to repay the loan. These parameters help lenders assess the risk and decide whether to approve the loan.
Who is Eligible for Home Loan?
| Home Loan Eligibility Criteria | |
|---|---|
| Age | 18-75 years |
| Income for Salaried | For salaried: At least 10,000 per month For self-employed: At least 2 lakh p.a. |
| Credit Score | Preferably 700 or above |
| Occupation Type | Salaried and Self-Employed Professionals/Non Professionals |
| Job/Business Stability | For salaried: At least 2 years of work experience For self-employed: At least 3 years in the current business |
Factors Affecting Home Loan Eligibility
Various factors determine your eligibility for a home loan. If you understand these can increase your chances of approval. Here is a simplified breakdown:
Income/Salary :
Lenders commonly require a minimum income to qualify for a home loan. For salaried individuals, this is usually Rs 15,000 to 20,000 per month, while self-employed applicants need at least Rs 1.5 lakh per annum. Lower income borrowers may apply for affordable housing schemesCredit Score :
A credit score of 700 or above is preferred, as it shows good financial discipline and reduces the risk of default. Some lenders may offer loans even without a credit history, but terms may vary.Age:
The minimum age to apply is 18–21 years, and the maximum age at loan maturity is typically 70–75 years. Younger applicants can often secure longer loan tenures, sometimes up to 30 years.Employment:
Salaried people, especially those who work with governments, PSUs, or reputed companies, have better chances of approval due to stable income. Self-employed professionals like doctors or CAs also fare well. Lenders usually require 2 years of work experience for salaried individuals and 3 years of business stability for self-employed individuals.Repayment Capacity :
Lenders check if your total EMIs (including the new loan) exceed 50% of your income. Opting for a longer loan tenure can reduce EMIs and improve eligibility. Metrics like EMI/NMI ratio or FOIR (Fixed Obligation to Income Ratio) are used to assess this. A ratio below 50–55% is generally preferred.
By keeping these factors in mind, you can better prepare for a home loan application and increase your chances of approval.
Home Loan Eligibility based on Property Value and LTV Ratio
The loan amount a borrower can get depends mainly on two things: the property’s value and the Loan-to-Value (LTV) ratio. The LTV ratio is the percentage of the property’s value that lenders are willing to finance through a home loan. The Reserve Bank of India (RBI) has set limits on these ratios, which vary depending on the property’s value, as shown below:
| Loan Slab | LV Ratio Limit |
|---|---|
| Up to Rs. 30 Lakh | Up to 90% of the property value |
| Between Rs. 30 Lakh & Rs. 75 Lakh | Up to 80% of the property value |
| More than Rs. 75 Lakh | Up to 75% of the property value |
Within the specified limits, home loan lenders determine the Loan-to-Value (LTV) ratio by evaluating the applicant's risk level and credit history. Applicants with weaker credit profiles typically receive lower LTV ratios.
What is a Home Loan Eligibility Calculator?
A home loan eligibility calculator is an online tool designed to help you determine borrowers to figure out how much loan you can qualify for. It uses details like your age, income, loan tenure, interest rate, and any other existing debts to estimate the loan amount you are eligible to receive.
Some lenders may ask for the property location to check if it falls under their serviceable area. If you are planning to apply for a home loan, it's a good idea to visit your lenders website and use their calculator to get a clear idea of the maximum loan amount you can qualify for.
How to Use a Home Loan Eligibility Calculator?
Using a home loan eligibility calculator is simple and straightforward. To get accurate results, you need to input details like your total monthly income, the loan tenure you prefer, the interest rate, and any existing EMIs (if applicable). Some lenders may also ask for additional information, such as your city, date of birth, type of employment, and other personal details.
6 Quick Tips to Boost Home Loan Eligibility
Boost Credit Score: Maintain a score of 700+ by paying bills on time and avoiding multiple loan applications.
Add a Co-Applicant : Include an earning family member with good credit to increase loan chances and amount.
Opt for Interest-Only Loans: Pay only interest initially, then switch to EMIs later. Ideal for under-construction properties or lower initial income.
Increase Down Payment: Pay more upfront (above 10%) to reduce loan amount and improve approval odds.
Limit EMIs: Keep total EMIs (including new loan) below 50-55% of your monthly income. Choose longer tenures if needed.
Explore Guaranteed Loans: Consider mortgage-backed loans for relaxed eligibility, higher amounts, or longer tenures.
These steps can help you secure a home loan with better terms!
Conclusion
Determining home loan eligibility is a crucial step in the home-buying process, as it helps borrowers understand their financial readiness and borrowing capacity. Lenders assess factors such as income, credit score, employment stability, existing debts, and the property's value to determine eligibility. By maintaining a strong credit profile, managing debts responsibly, and ensuring stable income, applicants can improve their chances of approval. Understanding these criteria and preparing accordingly can streamline the loan application process, bringing borrowers closer to achieving their dream of homeownership.
FAQs
What credit score is needed for a home loan?
Most lenders prefer a score of 700 or higher.What is the maximum age for a home loan?
Typically 70–75 years at loan maturity.How does the LTV ratio affect my loan?
It decides how much of the property value lenders will finance (up to 90% for properties under Rs. 30 lakh).How do multiple loan apCan I get a home loan with low income?
Yes, but minimum income requirements apply (Rs. 15,000–20,000/month for salaried, Rs. 1.5 lakh/year for self-employed).How can I improve my eligibility?
Boost credit score, add a co-applicant, increase down payment, and limit EMIs to 50–55% of income.
