How much loan you are eligible?

Here is a look at some factors that determine your home loan eligibility. Your income level and stability of job determine how much a bank is willing to lend. Most banks consider the fixed monthly income alone and ignore the performance bonus and variable pay components when arriving at the installment to-income ratio. Banks are more stringent while lending huge loans. Salaried individuals are considered to possess greater repayment capacity than the self-employed. Your income and repayment capacity decide your home loan eligibility.
Financial position
An applicant's overall financial health is an indicator of his repayment capacity. Savings in other instruments, a good bank balance and other assets assure the lender that the probability of default is very low. A person with no previous history of default and no other debts will be eligible for a greater loan amount.
Age
Age determines the earning potential of an individual. A person close to his retirement years will not be eligible for a loan tenure beyond his working years. A young person who has started earning will be eligible for a long tenure loan. He is considered to have greater earning potential.

Nature of Job

Certain jobs are classified by banks as having high risk. The list varies from lender to lender. Some companies are more favoured by lenders and such applicants are also offered lower interest rates.

Enhancing Limit

Your educational qualification , age, number of dependants, other assets, liabilities , credit report, other savings and job stability determine your enhancement eligibility. Enhance your home loan eligibility by opting for a higher tenure. The EMI that is due declines as the tenure is increased. On the flip side, you may have to pay more to the bank in the form of interest. You can also enhance loan eligibility by clubbing your income with that of either, your spouse, father, mother or son. Joint loans increase your loan eligibility.