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How to calculate home loan eligibility by yourself

Are you dreaming of owning your own home, but wondering if you'll be eligible for a home loan? Calculating your home loan eligibility can seem like a daunting task, but it's not as complicated as it might appear. In fact, you can do it yourself with a few simple steps. So, let's break it down and see how you can determine your home loan eligibility.

Income Assessment:

The first step in calculating your home loan eligibility is to assess your monthly income. Let's say your monthly income is 51,000 Rupees. Typically, banks provide loans based on a percentage of your monthly income, usually between 50% to 60% of your EMI (Equated Monthly Installment).

EMI Calculation:

For our example, let's consider 50% of your monthly income, which would be 25,500 Rupees. Now, let's figure out the EMI for a 1 lakh Rupees loan with the prevailing interest rate, which is typically around 7-8% for a 20-year loan. This comes to about 850 Rupees per month.

Now, to calculate your loan eligibility, you can use the formula: Loan Eligibility = (Monthly Income / EMI). In this case, it's 25,500 / 850, which equals 30 lakh Rupees. So, if you have no other EMIs, your loan eligibility is 30 lakhs.

Consider Existing EMIs:

If you're already repaying another loan, let's say an 8,500 Rupees EMI per month, the bank will subtract this amount from your calculated EMI. So, 25,500 - 8,500 equals 17,000 Rupees. Using the same EMI calculation method, your home loan eligibility now becomes 20 lakhs.

Joint Application:

If your spouse is also employed and you decide to purchase the home jointly, it can boost your home loan eligibility even further. Let's assume your spouse's monthly income is 34,000 Rupees. In this case, the bank will consider granting a loan with an EMI of 17,000 Rupees per month. So, your eligibility increases by another 20 lakhs. This brings your total eligibility to 40 lakhs if you have other EMIs to pay, and 50 lakhs if you don't have any other existing loans.

Calculating your home loan eligibility is that simple. It's all about understanding your income, factoring in existing EMIs, and considering a joint application if applicable. You can use this basic formula to get a rough estimate of what you might be eligible for. If you need further clarity, visit

Use EMI Calculators:

If you find these manual calculations a bit complex, you can also leverage technology. There are several EMI calculators available on app stores. Just download one, input your details, and it will do the math for you. These calculators often take into account the prevailing interest rates, your income, and existing EMIs, making the process even more straightforward.

Remember, while this calculation gives you a ballpark figure, your actual home loan eligibility may vary from one lender to another, depending on their specific policies and the current market conditions. In addition to these factors, other aspects come into play when applying for a home loan, such as your credit score, the property's value, down payment, and the choice between floating and fixed interest rates. You'll also need to prepare the necessary documentation, including proof of income and KYC documents.

Your home is a significant investment, and calculating your eligibility is the first step towards making your homeownership dreams a reality. So, roll up your sleeves, do the math, or use a handy app, and start your journey towards securing that dream home!