How much home loan can I get on my salary?

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You can usually get a home loan that is 60 times your salary. However, lenders do not generally consider your in-hand salary when determining the loan amount. Your in-hand salary may include the list below.

  • Basic salary
  • Medical allowance
  • Leave travel allowance
  • House rent allowance
  • Other allowances, etc.

Now, a lender will not consider allowances like medical and leave travel when assessing your income. These allowances are provided only for the designated use; hence, financial institutions exclude them.

Assume your in-hand salary is Rs. 60,000, and after excluding medical allowance, LTA, etc., it goes down to Rs. 49,000. It is upon this amount; will your Home Loan amount be calculated. You can use our home loan calculator in case you want to estimate the monthly installment

How to calculate home loan eligibility based on monthly salary?

Considering you are a resident of Bangalore of 30-year-old with all financial obligations and current EMIs Nil, The Following table illustrating the home loan eligible based on salary:

Net monthly Salary

Home loan amount

Rs. 25,000

Rs. 20,85,328

Rs. 30,000

Rs. 25,02,394

Rs. 35,000

Rs. 29,19,460

Rs. 40,000

Rs. 33,36,525

Rs. 45,000

Rs. 37,53,591

Rs. 50,000

Rs. 41,70,657

Rs. 60,000

Rs. 50,04,788

Rs. 70,000

Rs. 58,38,919

The above values are calculated using Bajaj Finserv Home Loan Eligibility Calculator.

Eligibility criteria for home loan based on your monthly salary

Home loan eligibility is primarily based on the borrower's income, credit score, job stability, age, and other financial liabilities. Lenders follow specific guidelines to determine the loan amount that a borrower can qualify for based on their income.

Generally, lenders consider the borrower's net monthly income while calculating their loan eligibility. The maximum loan amount that a borrower can get is determined by the lender's policy, which sets a maximum EMIs that the borrower can afford.

As a general rule, the EMI should not exceed 50% to 60% of the borrower's monthly income. For example, if someone has a monthly income of Rs. 50,000, the maximum EMI they can afford is around Rs. 25,000 to Rs. 30,000. Based on the prevailing interest rates and the loan tenure, the lender can calculate the maximum loan amount that the borrower is eligible for.

Apart from the borrower's income, lenders also consider their credit score while determining their home loan eligibility. A good credit score is essential to getting a high loan amount and a low-interest rate. Borrowers with a high credit score are considered to be more creditworthy and are more likely to get a higher loan amount.

Other factors that lenders consider while determining home loan eligibility include the borrower's age, job stability, existing loans and liabilities, and the property's value. Borrowers who are younger and have a stable job are considered to be more eligible for a higher loan amount. In conclusion, home loan eligibility in India is primarily based on the borrower's income, credit score, job stability, age, and other financial liabilities. Borrowers should carefully assess their eligibility and compare loan offers from various lenders before finalising their home loan to get the best deal.

It is important to note that the actual loan amount a person can get may vary based on several factors, and it is advisable to check with various lenders and compare the offers before finalising the loan. Additionally, borrowers should ensure that they can comfortably afford the EMI before taking on a home loan to avoid any financial strain in the future.

Nevertheless, apart from your income, factors like your current EMIs and fixed obligations also affect your repayment capacity. Hence, it is best to use a home loan eligibility calculator to check the home loan amount you are eligible for as this tool considers factors like your income, loan tenure, other monthly income, and current financial obligations while forecasting the eligible loan amount.

How to calculate loan eligibility from monthly salary?

To calculate home loan eligibility from your monthly salary, follow these steps:

 

  • Determine net monthly income: Calculate your net income after taxes and other deductions.
  • Assess fixed obligations: Identify all monthly financial commitments like EMIs, rent, etc.
  • Calculate debt-to-income ratio: Ensure total EMIs (including proposed home loan EMI) do not exceed 40-50% of net monthly income.
  • Use a home loan eligibility calculator: Input loan amount, tenure, and interest rate to estimate monthly EMI.
  • Check CIBIL Score: Ensure a good credit score to maximide loan eligibility.

 

What factors affect home loan eligibility for a salaried employee

Several factors can affect the home loan eligibility of a salaried employee. Lenders typically consider the following aspects when determining whether to approve a home loan and how much to lend:

1. Income:

  • Salary: The amount of your monthly or annual salary is a crucial factor. A higher income generally improves your loan eligibility.
  • Stability of income: Lenders prefer borrowers with a stable and regular income. If you've been with the same employer for a longer period, it can positively impact your eligibility.

2. Age:

  • Younger individuals may get an option to choose a longer repayment period.

3. Credit score:

  • A good credit score reflects your creditworthiness. Lenders use this to assess the risk associated with lending to you. A higher credit score often leads to better loan terms.

4. Debt-to-Income Ratio (DTI):

  • Lenders evaluate your ability to repay the loan by considering your existing debts. A lower debt-to-income ratio (monthly debt payments divided by monthly income) increases eligibility.

5. Down payment:

  • The amount you can contribute as a down payment can affect the loan amount and terms. A higher down payment may lead to more favourable loan terms.

6. Property value:

  • The value of the property you intend to purchase also influences loan eligibility. Lenders may finance a percentage of the property value, and the loan amount is often capped.

7. Loan tenure:

  • The loan tenure, or the number of years you take to repay the loan, can impact eligibility. A longer tenure may result in a higher eligibility, but it also means paying more interest over the loan term.

8. Nature of employment:

  • Some lenders may have specific criteria based on the nature of your employment (e.g., permanent, contract, or self-employed).

9. Existing loans and liabilities:

  • Your existing loans and financial liabilities can affect your eligibility. Lenders may consider your overall financial obligations before approving a new loan.

10. Co-applicant's income:

  • Including a co-applicant with a stable income can enhance eligibility and loan amount.

What to do if your salary is not eligible to avail home loan?

If your salary is not eligible to avail a home loan, consider the following options:

 

  • Add a co-applicant: Include a spouse or family member with a higher income to boost eligibility.
  • Opt for a longer tenure: Choose a longer repayment period to reduce the EMI burden.
  • Pay off existing debts: Clear any outstanding loans to improve your debt-to-income ratio.
  • Show additional income: Include bonuses, rental income, or other sources of income.
  • Improve credit score: Maintain a good credit history to enhance loan approval chances.
  • Save for a larger down payment: Reduce the loan amount needed.

 

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Frequently asked questions

How much home loan can I get as a salaried employee?

As a salaried employee, you can get a loan of up to 15 crore* depending on your credit profile and eligibility criteria.

How much home loan can I get on a Rs. 70,000 salary?

You can get a home loan of an estimated amount Rs. 58,38,919 if your salary is Rs. 70,000. However, the final loan amount also depends on various factors, including the lending policies of financial institutions and your financial profile. Generally, lenders consider your income, existing financial obligations, and creditworthiness to determine your loan eligibility.

How much loan can I get on Rs. 1 lakh salary?

The loan amount you can get on a salary of Rs. 1 lakh per month will depend on several factors, including the lending policies of financial institutions, your financial profile, and other variables. Lenders consider factors such as your income, existing financial obligations, creditworthiness, and loan tenure to determine your loan eligibility.

While specific loan eligibility calculations can vary among lenders, a common practice is to consider your monthly income and apply a loan-to-income ratio to determine the maximum loan amount you may be eligible for.

What is the minimum salary required to obtain a home loan?

The minimum salary required to obtain a home loan varies among lenders and depends on factors such as the loan amount, creditworthiness, and local regulations. Lenders typically assess an applicant's debt-to-income ratio, credit score, and income stability.

How much home loan can I get on Rs. 20,000 salary?

The amount of home loan you can get on a monthly salary of Rs. 20,000 depends on various factors, including the lending institution's policies, your creditworthiness, and the prevailing interest rates. Lenders typically use a debt-to-income ratio to assess your eligibility, and this ratio is the percentage of your income that goes towards repaying debts.

How much home loan can I get on Rs. 60,000 salary?

The home loan amount you can get on a Rs. 60,000 salary depends on factors like the lending institution's policies, your creditworthiness, loan tenure, and interest rates. To get accurate information, consult with specific lenders who can assess your financial profile and provide details on the loan amount and terms you may qualify for.

How much home loan can I get on a Rs. 62,000 per month salary?

On a Rs. 62,000 per month salary, you could typically get a home loan of around Rs. 37-46 lakh, assuming financial institutions lend up to 60-75% of monthly income and considering your credit score and existing liabilities.

How much salary is required for a Rs. 40 lakh home loan?

For a Rs. 40 lakh home loan, you generally need a monthly salary of Rs. 67,000-80,000, based on a 20-25 year tenure and 50% of monthly income allocated to EMI, depending on the financial institution’s criteria.

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