A home loan comes as a respite for individuals intending to build their dream house but facing a shortage of funds. With this large-ticket credit assistance, they can raise a substantial amount of funds from the lending market. However, the maximum amount individuals can borrow through this facility depends significantly on their monthly incomes. This is why, while estimating the budget for the dream home, intending borrowers should know how much home loan can i get.
Impact of salary on the home loan amount
How easily individuals can repay their borrowings depends substantially on their overall income. When the income is high, they can easily pay off small to large instalments. Income serves as an indicator of borrowers’ repayment potential. This is why it is one of the foremost things that lenders check to determine the total home loan their applicants can get.
Besides the maximum credit amount, the monthly income also influences the housing loan interest rate to a large extent. With a higher income, borrowers can get the loan at a lower rate.
Other factors that influence the maximum home loan amount
Salary is not the sole factor on which the maximum home loan amount is determined. There are also some other aspects that influence how much home loan one can get.
Following are some aspects which render a significant influence on the maximum home loan amount:
- Monthly obligations: When individuals already have an existing loan or other financial obligations, they may face difficulties to repay their debts. This is why customers with existing financial obligations get relatively less amount of credit as home loan, despite their high income.
- Date of birth: With the increasing age of customers, their maximum allowable home loan amount decreases. Young individuals can opt for a higher credit amount than those approaching retirement.
Knowing exactly how much home loan borrowers can get
To let customers know how much home loan they can get against their salary, age and existing monthly obligations, lenders provide a home loan eligibility calculator. Lenders make the online tool available on their websites. Here are the steps individuals need to follow to know the amount they can borrow through home loan:
Step 1: Access the calculator
Step 2: Enter inputs, including date of birth, monthly income and total monthly obligations
Following these two simple steps, individuals can know the maximum home loan amount they can get. Besides this tool, they should also ideally use a housing loan EMI calculator. It can help them understand the instalment amount against the borrowed credit, selected tenor and applicable interest rate.
How can borrowers secure a low home loan interest rate?
Apart from knowing the maximum loan amount, intending borrowers also should be aware of how they can secure credit at a lower interest rate.
Here are some ways that will help individuals to secure a home loan at a low interest rate:
- Comparing the home loan interest rate of different lenders
- Maintaining a healthy credit score
- Building a positive relationship with the financial institution
- Choosing a short loan repayment period
In this regard, some lenders give pre-approved offers to their customers on financial products like home loan and loan against property. By accepting these offers, they can significantly reduce the loan application time. They will just have to mention their names and contact details to check their pre-approved offers.
Customers facing credit shortage to build their house should ideally be aware of how much home loan amount they can get. To meet this objective, they can use the home loan eligibility calculator. They can know the maximum credit they can borrow simply by providing some basic inputs such as birth date, existing financial obligations and monthly income.