How much home loan I can get on my salary in India

Taking a home loan is one of the best ways to own your dream house. However, the financial commitment associated with it can seem daunting. One way to navigate this journey confidently is by understanding how much loan amount you can get on your salary. This knowledge helps you prepare for the downpayment, plan your EMIs, and even research on different lenders in India.

With Truhome Finance, you can finance up to 90% of the property’s value, provided you meet certain eligibility criteria. To know how much money you can avail from a home loan for a salaried person, you can use our online home loan eligibility calculator. However, there are several other criteria that lenders factor in to determine how much loan amount you can get. Read this blog to discover the other factors and start your homeownership journey today.

What are the Eligibility Criteria for a Home Loan on Your Salary?

The basic home loan eligibility based on salary takes into consideration the borrower's credit score, job stability, age and other financial liabilities. These criteria help the lender determine the loan amount the borrower can get and the maximum EMIs that the borrower can afford.

The monthly income that's taken into consideration can be divided into two categories – basic salary and allowances like medical allowance, leave allowance, house rent allowance, and so on. After deductions like Employee Provident Fund (EPF), Tax Deduction at Source (TDS), Professional tax, etc., the remaining amount is the in-hand salary or the net monthly income of the borrower.

Typically, salaried individuals are eligible to get up to 60 times their net monthly income for the home loan amount. Here is the potential loan amount you can get on your salary at an interest rate of 9.5% and tenure of 20 years assuming the loan is 60 times the monthly salary.

Note: The home loan and EMI amounts are only an approximation. Actual figures could differ based on several factors. Please check with your lender before proceeding.

Other than the net monthly income of the borrower the other factors mentioned below also play an important role in determining the loan amount given to the borrower.

What are the Other Factors that Impact Home Loan Eligibility?

The amount you can borrow, also known as your home loan eligibility, depends on several factors, as discussed below. Understanding these factors is crucial to ensuring a smooth and successful homeownership journey.

Employment Stability

A steady job with a regular income history might greatly increase your eligibility. Borrowers who have been in their current company for an extended period are preferred by lenders because it demonstrates job stability.

Credit Score

Your credit score is a numerical assessment of your creditworthiness. It is an important requirement that lenders evaluate when determining your eligibility. Typically, a credit score of 700 or higher demonstrates responsible financial behaviour and boosts your chances of loan acceptance. A low credit score, on the other hand, may limit your eligibility or result in higher interest rates.

Age and Tenure

Your age influences the length of your loan and, as a result, your eligibility. Younger applicants can choose longer terms, spreading the loan over a longer period and lowering the EMI cost. However, due to retirement age, older applicants may face limits in terms of tenure.

Existing Debt Obligations

Personal loans, vehicle loans, consumer loans and credit card payments can have an impact on your home loan eligibility. Lenders look at your Debt-to-Income (DTI) ratio to ensure your current debt commitments don't exceed a particular percentage of your income. The lower the DTI ratio, the better are your home loan eligibility.

Co-applicants or Co-borrowers

A co-applicant with a steady salary might greatly increase your home loan eligibility. It enables you to combine both salaries to qualify for a larger loan amount. However, keep in mind that co-applicants have equal responsibility for loan repayment.

Property Value

Your loan eligibility is also affected by the value and type of property you intend to purchase. Lenders typically finance up to 85 to 90% of the value of the property, known as the Loan-to-Value (LTV) ratio. A greater LTV ratio might necessitate a lesser down payment.

Loan Tenure

The tenure you choose for your home loan can impact your eligibility. Longer tenures result in lower Equated Monthly Instalments (EMIs), potentially increasing your eligibility. However, longer tenures also mean paying more interest over the loan's lifetime.

Location and Property Type

The location of your property and its type can influence your eligibility. Lenders might have specific criteria for properties in certain areas or those under construction. It's essential to be aware of these considerations.

Financial Documents

Providing accurate and complete financial documents, such as income tax returns, bank statements, and salary slips, is essential for a smooth loan approval process.

How to Apply for an Truhome Finance Home Loan Online

Applying for an Truhome Finance Home Loan online is an easy 4-step process:

Step 1: Create a new account using your mobile number using our Truhome Finance ACE app.

Step 2: Fill in your personal information.

Step 3: Select the loan amount and tenure and submit the application.

Step 4: Our dedicated relationship manager will contact you to process your home extension loan.

Conclusion

Understanding the factors affecting your home loan eligibility will help you understand how much loan you can get on your salary. To maximize your eligibility, maintain a good credit score and manage your existing debts responsibly. You can also use the Truhome Finance Home Loan Eligibility Calculator to know how much loan you can get for your specific salary. By doing so, you can embark on your homeownership journey with confidence, knowing that you are well-prepared to secure the right home loan for your needs.

FAQs

Here are some frequently asked questions about home loan eligibility:

1. What is home loan eligibility, and why is it important?

Home loan eligibility refers to the maximum loan amount you can qualify based on your financial profile. It's crucial because it determines your ability to secure a loan for your dream home.

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

Typically, you can get a loan of up to 60% of your net monthly income depending on the banker or lender. That would approximately amount to Rs. 60,000 on a monthly salary of 1 lakh. However, it is important to remember that there are several other criteria that determine your eligible loan amount. Speaking to your lender before proceeding with your home-buying journey is wise.  

3. How is home loan calculated based on salary?

Debt-to-Income ratio can be a maximum of 50% inclusive of home loan EMI. So, whatever is your salary, take 50% of that. Let's say the salary is 60,000. Therefore, the max EMI can be 30,000. From this 30,000, deduct existing EMIs, if any, and the remaining amount can be your home loan EMI. You can now do back calculations to get the loan amount you are eligible for.

4. Is there an ideal age for home loan eligibility?

Lenders prefer a minimum age of 28 and maximum of 55 years of age.

5. How do existing loans affect my home loan eligibility?

Existing loans reduce your eligibility, as they increase your debt-to-income ratio. A lower ratio is preferred with Truhome Finance.