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What You Need To Know About Housing Loan Eligibility In India


A housing loan is a loan used by borrowers to purchase a home. They are one of India’s most used lending products. Checking your housing loan eligibility is the first step toward applying for a housing loan. Several factors can affect your eligibility. It includes your income, repayment terms, previous loans, and much more.

Getting a home loan will be stressful if you don’t satisfy these terms. The lender might deny your application if you don’t fulfil the housing loan eligibility. Due to this, it is vital to learn what housing loan eligibility is and what factors affect your eligibility.

What is housing loan eligibility?

Housing loan eligibility is like a list of needs which you must fulfil if you want to get a house loan. Lenders use it to determine a borrower’s creditworthiness and see if they can repay the loan. In return, this saves the lender’s time which they might have spent on conducting a background check. They do this to ascertain whether the applicant can repay a loan.

The bank uses a certain type of housing loan eligibility calculator to know the amount of loan they lend to a borrower. They will also use your details to check your credit score as well.

What are the factors which affect housing loan eligibility?

If you are thinking of applying for a housing loan, you should consider the following factors: –

  • Age: When accepting a house loan, lenders consider age a crucial factor. If you are between the ages of 25 and 30, you may acquire a loan for up to 30 years. Someone between the ages of 50 and 55, will only get a housing loan for a maximum of 15-20 years. It also depends on the lender’s regulation and the age criteria. A longer payback period will increase your eligibility and result in lower EMIs. It will also make it simpler for you to repay the loan without defaulting.
  • Net Income: Banks use your current income and monthly outflows to determine your housing loan eligibility. It highlights your capacity to repay a loan. Your net income should be enough each month to cover your EMIs.
  • Credit Score: A key element for approval of your housing loan application is your credit score. Most lenders look for a borrower whose credit score is over 700. If your credit score is above this range, it increases your chances of getting a housing loan, that too, at a cheaper interest rate.
  • Employment type: Lenders also take into account your type of employment. Contract workers are seen as less trustworthy than permanent workers with a history of consistent income. In addition, lenders could grant you a larger loan if you file an ITR regularly. Unlike someone with a shaky firm or no evidence of income.
  • Loan-to-Value Ratio (LTV): The loan-to-value ratio (LTV) is the portion of the property’s value for which the lender will provide financial support. A lender allows you to borrow up to 90%* (according to NHB standards) of the property’s market worth as determined by them. Therefore, you will get a bigger loan and vice versa if your house is worth more.
  • Cash outflows: Lenders always check whether a person can afford to pay the EMI for a loan. They use different factors to determine your monthly cash inflow and outflow, like your monthly income and fixed monthly expenses. Through this, they know whether you have some outstanding cash which will allow you to pay your monthly loan EMI.

How to increase your housing loan eligibility?

Increase your housing loan eligibility by using the following tips:  

  • Improve your credit score: A high credit score usually increases housing loan eligibility. To accomplish that, one must ensure that all loan repayments are done on time. Your credit score is negatively impacted by any delay or default. You may improve your credit score by maintaining a low credit usage ratio (CUR).
  • Choose joint mortgage loans: If you have multiple earners in your family, apply with a co-applicant. With this, you can boost your housing loan eligibility exponentially. The best action is to apply for a mortgage with your partner, parents, or both. There are many other benefits of co-borrowing. It provides you with an increment in the loan amount. With a co-applicant, you don’t have to take full responsibility for a loan. Apart from that, you also get tax advantages.
  • Choose a longer term: One might choose a lengthier housing loan term to boost their eligibility for a house loan. A longer loan term raises the interest you must pay.
  • Timely debt repayment: The debt-to-income ratio plays an important role in housing loan eligibility. You should clear your outstanding debt before applying for a loan.
  • Think before you act: Before you apply for a house loan, you should thoroughly research and give yourself enough time. You should check your budget, earnings, CIBIL, etc. You should also compare loan options and decide between a fixed and floating interest rate.
  • Declare Any Additional Income You May Have: When you disclose your other sources of income, your eligibility for a house loan rises. You should add another source of income since it will help you get a larger loan.


That was all about housing loan eligibility. You should always consider it an important factor before applying for a home loan. So, before you apply for a house loan, be sure to take into account all the housing loan eligibility factors given in this article.

Piramal Finance assists you in determining your housing loan eligibility. The company also provides housing loans for self-construction, refurbishment, loans against property, or for purchasing a new home. You can visit their website and read about this in detail to know more about this.