Home Loan

Want To Calculate Home Loan Eligibility In A Few Seconds?: Here Is A Guide


Many people dream of owning their own homes at some point in their lives. It is an accomplishment for them to purchase a home. It also represents a new beginning when you move into a new home. Although, this dream is still out of reach due to the high costs associated with home ownership. Additional costs such as registration, stamp duty, taxes, and other expenses make home ownership out of reach. Hence, purchasing a home in metro cities is nearly impossible for working-class citizens. This distant dream is now possible because home loans from financial institutions have made it possible.

How do you know if you are eligible for a home loan, and what are the criteria? We will guide you on home loans and how to use the home loan eligibility calculator to determine the amount you can borrow.

What are home loans?

Home loans are loans that you take out from a lender (bank or NBFC) to finance the purchase of a new home. This loan is limited to purchasing a home and not any other commercial real estate or property. Financial institutions provide only 80-90% of the property value as funding.

When you take a home loan, you repay this amount through EMIs. EMIs include both the principal amount and interest over a period. The house you buy will remain as collateral with the respective lender until the loan amount is fully repaid. 

How to calculate Home Loan Eligibility

Creditworthiness and eligibility are key factors in determining if you qualify for a home loan. The factors that determine your home loan eligibility include the following.

  1. Gross income

Income determines your loan eligibility since it shows your ability to pay EMIs on time. Your eligibility for a loan increases with your income.

  1. Credit score

This three-digit score determines your financial position and whether you have successfully repaid all your past debts. It is a significant factor in deciding whether you are eligible for a loan.

  1. Loan tenure

If you opt for a longer loan tenure, the interest rate will be lower. However, the loan amount you repay at the end of the term will be higher. Furthermore, a shorter tenure increases the loan interest rate, thereby increasing your EMI amount but reducing the overall amount you pay.

  1. Existing loans

Financial institutions suggest keeping the EMI-to-income ratio below 50%. However, if there are existing loans or any other debt you are currently repaying, it can affect the amount you are eligible to receive.

  1. Profession

You must be a salaried or self-employed professional to be eligible for a home loan. The documents can also be used to verify your employability and determine how much loan you are eligible for. 

  1. Property value

The cost of the property you want to purchase plays a role in the eligible home loan amount. Lenders may offer you a higher loan if the property’s market value is higher.

These details establish whether you can repay the loan. 

However, performing this calculation manually can lead to many errors. With the advent of technology in finance, many loan providers have a loan eligibility calculator on their official websites. This calculator helps you estimate your loan amount based on these determining factors.

How to use the home loan eligibility calculator

A home loan eligibility calculator is the best way to verify the amount you can get to finance your housing dreams. It works on a mathematical formula that considers your income, age, credit score, employment status, the amount you need and other factors to evaluate your eligible loan amount. The calculator requires you to enter this information. 

While these criteria and the information you provide vary from one financial institution to another, here are the steps to follow to enter your information into a home loan eligibility calculator.

  1. Visit the lender’s Housing Loan Eligibility page.
  2. Choose your profession from the dropdown box.
  3. Use the slider to select your gross monthly income.
  4. Select and move the next slider to enter the total amount of your existing EMIs.
  5. Move the slider to enter the interest rate at which you would prefer your home loan.
  6. Use the final slider to enter your ideal loan tenure.

Alongside the calculator, you will get the results of the home loan amount you are eligible for and decide whether the terms are ideal for you.

Other eligibility and documentation requirements

With the above factors, the documents you submit play a major role in confirming your home loan eligibility. The list of documents to provide includes the following.

For salaried applicants:

  1. Address proof (Aadhar Card, Rent Agreement, Voter ID, etc.)
  2. Identity Proof (Passport, PAN Card, etc.)
  3. Proof of Age (Birth Certificate, 10th Marksheet, Driving License, etc.)
  4. Form 16
  5. Employer’s certified letter
  6. Two months’ salary slips
  7. Three years’ IT returns (increment or promotion letter)
  8. Passport-size photos
  9. Property documents include a letter of authorisation from the society/builder, a construction estimate, an occupancy certificate, etc.

For self-employed applicants:

  1. Address proof (Aadhar Card, Voter ID, Rent Agreement, etc.)
  2. ID Proof (PAN Card, Passport, etc.)
  3. Proof of Age (Birth Certificate, 10th Marksheet, Driving License, etc.)
  4. Three years IT returns
  5. Business License (or any other equivalent document)Company Balance Sheet and Profit & Loss Account Statement (duly attested by a C.A.)
  6. Professional Practice License (For Doctors, Consultants, etc.)
  7. Certificate of Establishment Registration (For Shops, Factories & Other Establishments)
  8. Business Address Proof (letter of authorisation from the society/builder, a construction estimate, an occupancy certificate, etc.)


If you have found your dream home, it is time to make it yours and apply for a housing loan. Many lenders provide these loans, and it can be hard to decide on the right one for you. With Piramal Finance, you can secure your housing loan with easy procedures, minimal documentation and flexible repayments. Apply for your preferred home loan now from Piramal Finance.