Usually you can get a home loan of an amount that is 60 times your net salary. While this may give you an indication, it is best to arrive at a number by considering all the factors that influence this amount. Your salary, credit score and current debt situation are some factors that impact how much you will be able to borrow as a Home Loan.
So, here’s a closer look at the measures you must take to understand the total home loan amount that you can borrow.
Your net salary is the amount you get in hand every month post all the deductions that your employer makes. For an instance, if your salary is Rs.60,000 and your deductions amount to Rs.3,000, then Rs.57,000 is your net salary. Calculating this amount is the first step to determining how much you can borrow.
Now, based on this calculation, understand what prospective lenders will offer you as a loan amount. Bajaj Finserv, for example, bases this on where you reside, the value of the property and how much you earn. It deems you eligible for a loan for a property whose minimum value is Rs.40 lakh, if your net salary is Rs.50,000 and if you reside in cities like Delhi and Mumbai. Residing in Bengaluru and Pune will make you eligible for a home loan where the minimum property value is Rs.30 lakh, and you draw a net salary of Rs.45,000. You can check these parameters online to get a better idea.
Calculate the amount that you pay each month towards expenses and existing debts such as loans and outstanding credit card bills. Once you arrive at this amount, you will be able to see how much of your income is left over. Next, shift your attention to calculating the value of each EMI.
You can calculate this for the home loan that you are about to take by using a Home Loan EMI Calculator. Enter the principal amount that you have in mind, along with the tenor and rate of interest. The result will be the EMI that you will have to pay. If it seems unaffordable, adjust the principal amount until the EMI coincides with your repayment ability. This will allow you to arrive at the amount that you can borrow.
Another way to determine how much you can borrow is by using an eligibility calculator. The Bajaj Finserv Home Loan Eligibility Calculator only requires you to feed in basic details such as your date of birth, city of residence, net monthly salary, other income, EMIs and debt obligations to understand if you are eligible. More importantly, it will also tell you how much can borrow.
As a home loan is of a high amount and has a longer tenor, lenders will also factor in your credit score before deciding how much to lend to you. The higher your credit score, the more responsible you are deemed to be. As a result, you are likely to get a higher loan sanction than someone who has a below average credit score. Typically, a score of 750 and above is considered to be good. So, you can view your credit score to estimate how much you will be able to borrow.
Follow these steps to get a fair idea of how much you can borrow in the form of a home loan. But, before you submit your application, ensure that you’re borrowing an amount that you need and can repay comfortably, instead of simply selecting the amount that you qualify for.
