Banks have a set of eligibility requirements that applicants must meet in order for their home loan application to be authorized. If the application meets the eligibility requirements, the bank determines that the borrower will be able to repay the loan in a timely manner and will not default. If an applicant does not meet the eligibility criteria, the bank will reject their application, which will have a negative impact on the user’s credit profile. A refusal on a loan application not only has a bad influence on your credit profile but also lowers your overall credit score. If you have a bad credit score, it will be more difficult for you to receive a home loan in the future. Several loan rejections might make you look credit-hungry.
The amount of money you can borrow from the bank in the form of a home loan is also set by the bank, which takes into account factors such as your income, previous loans, age, employment status, and credit score. Your monthly income is important when applying for a house loan since it determines the maximum loan amount you can get approved for based on your income. The majority of banks will lend up to 85 percent of the property’s value as a home loan. The remaining 20% would have to be paid out of pocket as a down payment.
Home Loan EMI Calculator
When calculating your home loan EMI, banks evaluate a variety of factors. You can use a home loan EMI calculator to receive more accurate information about your EMI on your house loan. The EMI calculator is the most reliable tool for obtaining correct information because it incorporates factors such as the loan’s principal amount, loan period, and home loan interest rate when calculating your EMI amount. There are various different home loan EMI calculators available that you can choose from. These are mainly available at the bank’s official website. All of the EMI calculators provide accurate results. Therefore, it is advisable to use an EMI calculator before applying. Your EMI will be higher if your loan term is shorter, and vice versa. Apart from the higher monthly repayments, choosing a shorter loan period saves a lot on the eventual interest amount that you would have to pay on the entire loan amount.
An example of EMI payments for some loan amounts with a fixed home loan interest rate on varying principal amounts and varied loan tenures is shown in the table below.
|Loan Amount||Interest Rate||Loan Tenure||EMI|
|INR 50,00,000||7% p.a.||20 Years||INR 38,765|
|INR 40,00,000||7% p.a.||15 Years||INR 35,953|
|INR 30,00,000||7% p.a.||20 Years||INR 23,259|
|INR 20,00,000||7% p.a.||10 Years||INR 23,222|
The EMI amount for a home loan with different loan principal amounts and different loan tenures is shown in the table above. The table depicts the EMI on a larger loan with a longer loan term as well as a smaller loan term. The EMI on a home loan of INR 30 lac for a loan term of 20 years is nearly the same as the EMI on a home loan of INR 20 lac for a term of 10 years. As a result, it’s critical to carefully consider the loan amount as well as the loan term. However, it is always advisable to check your EMI amount using a home loan EMI calculator before applying for a home loan. Moreover, the choice of using which EMI calculator lies with the applicant because all of the calculators provide accurate results.
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