Home Loan Eligibility depends on how much you can borrow based on your income, liabilities, property type, and profile.
Here’s a clear breakdown so you can estimate it before approaching a bank:
🧮 1. Main Factors Banks Check
💼 Income
- Salaried: Monthly take-home after deductions
- Self-employed: Average annual profit (based on ITR & bank statements)
- The higher the income, the higher the eligible loan amount.
🧾 Existing Liabilities
- Any EMIs (car loan, personal loan, credit card dues) are deducted before calculation.
📅 Age
- Younger borrowers can get longer tenures (max 30 years).
- Most banks set:
- Salaried: Loan tenure up to age 60
- Self-employed: Loan tenure up to age 65
🏠 Property Type
- Clear title, approved plan, non-agricultural residential land.
- Banks may reduce loan % for non-RERA or under-construction properties.
💳 Credit Score
- CIBIL score ≥ 750 = best offers
- Lower scores mean higher interest or rejection.
📊 2. How Banks Calculate Eligibility
Most banks follow this simple rule:
Eligible EMI = 40%–60% of your net monthly income
Then they check what loan amount matches that EMI for your chosen tenure & interest rate.
Example:
Net salary: ₹70,000/month
Max EMI allowed: 50% → ₹35,000
At 8.5% interest, 20-year tenure → Loan ~ ₹38–40 lakh
🏦 3. Loan-to-Value (LTV) Ratio
Banks won’t finance 100% of property value. RBI rules allow:
| Property Value | Max Loan % |
|---|---|
| Up to ₹30 lakh | 90% |
| ₹30–75 lakh | 80% |
| Above ₹75 lakh | 75% |
You must arrange the rest as down payment + registration/stamp duty.
📈 4. How to Increase Eligibility
- Add co-applicant (spouse/parent/sibling with income).
- Opt for longer tenure (reduces EMI).
- Close existing small loans before applying.
- Maintain good CIBIL score.
- Show additional income (rent, bonus, business income).
📝 5. Quick Eligibility Formula (Approximate)
Loan Amount ≈ (Net Monthly Income × 50%) × Loan Tenure Factor
(Loan Tenure Factor = how many times your monthly EMI fits into total loan tenure, depends on interest rate)
For example:
₹80,000 salary × 50% = ₹40,000 EMI × 138 (factor for 8.5%, 20 years) ≈ ₹55.2 lakh loan.