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How Can You Calculate The Amount You Are Eligible For Before Applying For A Home Loan?

By Author: Aishwarya Mahurkar
Total Articles: 291

Home loan application is a long process and requires a lot of time and documentation. Before one applies for a loan, a potential borrower would like to know whether or not they are eligible for it. Most banks provide online home loan eligibility calculators which let an applicant know whether or not they are eligible for the same. The bank looks at the following criteria when considering an applicant’s home loan application:

1. Credit score

The first and most important thing that a bank studies when considering an application, is the applicant’s credit score. This document provides the bank with all the information pertaining to the applicant’s financial history, spending habits, loans previously undertaken, etc. It is extremely important for an applicant to have a high credit score. This shows the bank that they can be relied on to repay the loan on time. A high credit score provides the applicant with the additional benefit of being able to negotiate the interest rates charged.

2. Steady income

A steady source of income is extremely important if you wish the bank to sanction your loan. The reason why banks prefer offering loans to employees with a secure source of income is that they can be trusted to not default on their EMI payments each month. A steady income portrays the image of reliability which is what banks look for in borrowers.

3. Pending loans

If you have several pending loans, try to pay them off before you apply for a new loan. The reason being that too many loans may affect your credit score and reduce your chance of approval. The bank would be hesitant to issue another loan to you knowing that you are already burdened by pending loans. It not only reduces your credibility but also makes financial management difficult.

A home loan eligibility calculator is the ideal device one can use to check their eligibility online. It is extremely convenient as one is not expected to visit the bank. The results are available just a click away and can be viewed from the comfort of your own home. If the result finds you eligible you must immediately begin planning your finances. Home loans can put a burden on the borrower and hence it is important to be prepared for it. Budgeting your finances will make the entire repayment of the loan process far simpler. The components that are considered are the applicant’s monthly income, monthly liabilities, monthly housing expenses, desired interest rate and the desired tenure of the loan. All these components together are used by the home loan eligibility calculator to provide a report on the qualifying loan amount at different interest rates.

Author Bio :

The author is a seasoned writer on finance topics and she articulates aspects that are important to people availing the home loan facility. She writes about a variety of topics covering the home loan documents, rates & the uses of Home loan eligibility calculators that help to make the best decision.

Total Views: 74Word Count: 493See All articles From Author

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