The decision to avail yourself of a housing loan is a decision that will impact the way you live for decades. It is thus that home loan borrowers are advised to decide to avail themselves of a home loan only when they are financially and mentally prepared to make such a commitment. Further, borrowers must well-verse them with the concept of housing loan eligibility not only to enjoy quick loan approval but also to establish candidature for the most beneficial terms and conditions that help home loans become affordable home loans. 

Housing Loan Eligibility Explained 

When an individual applies for a housing loan, lenders look into a variety of things to ensure the loan borrower is capable of repaying their loan. Loan defaults not only lead to losses but the process to recover these losses is full of hassles. Therefore, lenders sanction loans only after carefully assessing the creditworthiness of a loan applicant. Every lender has a set of criteria that allows loan borrowers to correctly gauge the risk of doing business with a loan applicant. This set of criteria is called housing loan eligibility. In the majority of cases, lenders ask for the following housing loan eligibility criteria: 

1. The loan applicant must be a residing citizen of India between 23 and 70 years of age.*
    
2. They must either be employed with a reputed public or private sector company or must be self-employed and must be able to establish business profitability. 
   
   
3. The loan applicant must have a CIBIL score in the range of 725 or above. Some lenders also settle with 700 while others ask for at least 750.

* Age requirements for a housing loan vary from lender to lender. Further, the maximum age is always the age of the loan borrower at the time of applying for the loan. 

Housing Loan Eligibility Calculator: What is It and How Does it Help? 

A housing loan eligibility calculator is an online tool that lets home loan applicants calculate the loan amount that they are eligible for. The housing loan calculator is fairly easy to use and borrowers can use this tool free of cost. 

The calculator requires borrowers to enter certain specific details, including city of residence, date of birth, monthly income, other existing EMI obligations, etc. Based on the information provided, the calculator tells the borrower the loan amount they are eligible for. 

When one applies for a loan amount they qualify for and can comfortably repay, the chances of a loan default decrease significantly, which is why lenders offer the most lucrative deals in such cases. On the other hand, applying for a housing loan amount much higher than one is eligible can even lead to application rejection. 

Individuals looking for an affordable home loan must also use the home loan EMI calculator for budgeting and repayment planning. Doing this will increase their ability to negotiate for better loan terms and conditions as well as repay their loan in a hassle-free manner.

If upon using the housing loan eligibility calculator, you figure out that you have low home loan eligibility, you need not worry. There are some things you can do to improve your housing loan eligibility and chances of availing yourself of a home loan on the most lucrative terms and conditions. 

Tips on How to Improve Your Housing Loan Eligibility 

1. If you want to be considered for a higher loan amount or better loan terms and conditions, one of the first things that the loan borrower must do is consider adding a co-applicant with excellent creditworthiness. 
   In the case of joint home loans, lenders consider the combined income of all the applicants to assess the repayment capacity of the borrower and therefore, the loan amount they can apply for and are eligible for.
   
   
2. You can also increase your home loan eligibility by bringing down your debt-to-income ratio by paying off some of the loans you have. This will increase your repayment capacity and therefore, your ability to ask for more. 
   
   
3. Maintaining a stable job and income will also work in your favour. Lenders find borrowers who switch jobs often unreliable and therefore never extend their best loan offers to them. 
   
   
4. Lowering your LTV ratio will help too for low LTV ratio loans tend to be easier to pay than high LTV ratio loans and therefore, chances of a loan default are much lower with such loans.
   
   
5. Paying as high a down payment as possible will also allow you to negotiate for the most favourable housing loan deal.