What is Loan Eligibility in Home Loan? | Kotak Mahindra Bank - Home Loan Stories
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10 MAY, 2022

Property is a crucial asset that assists you to reap various financial benefits. No matter whether you want to buy a property for residing or investment purposes, today you can meet this goal by availing a home loan. A home loan is an excellent form of financial help if you lack the required funds or are not in favour of redeeming your investments. Through easy Equated Monthly Instalments (EMIs) and the option to select a loan tenure according to your convenience, lenders assist you to materialise your dream of becoming a homeowner. However, before you start with the application process, it is crucial for you to understand the home loan eligibility criteria set by lenders to avoid application rejection.

Lenders consider various factors to decide your home loan eligibility. These factors include your age, monthly income, credit score, financial obligations, employment status, and past credit record.

How to compute your housing loan eligibility?

Most lenders allow you to avail a home loan of usually up to sixty times your monthly income or net salary. For example, if your salary is Rs 60,000 per month, you may be eligible for a home loan of around Rs 36 lakh. However, few lenders may offer a higher loan amount.

Note that when calculating your home loan amount eligibility, lenders usually remove your leave, travel and medical allowances as they are meant for predefined purposes. You can use Kotak’s home loan eligibility calculator to compute your eligibility for a home loan by inputting your monthly income, existing EMIs, and other parameters.

Below are the indicative eligible home loan amounts based on common salary slabs. The loan amount below is calculated using Kotak’s home loan eligibility calculator:

Existing EMIs: None

Loan repayment tenure: 20 years

Interest rate: 8 percent per annum

Net monthly income (Rs)

Home loan amount (Rs)














Other factors that impact your housing loan eligibility

When computing your home loan eligibility, various other factors are considered other than your monthly income. They are:

  • Age

Salaried individuals falling between 18 and 60 years are eligible for a home loan. However, in the case of self-employed individuals, the eligible age for home loan approval ranges anywhere between 18 and 65 years. Note that your age forms a major criterion for also deciding your loan amount eligibility. In case you are younger, you may be eligible for a higher home loan amount as you have the potential to earn more due to a higher number of income-earning years ahead of you.

  • Employment

Not just your work experience but also your organisation where you work is considered for evaluating your home loan amount eligibility. The company’s reputation and the years you have been associated with the company show your job stability. Having a stable job may mean higher eligibility for a home loan.

  • Credit score

Your credit score is one of the crucial parameters factored in by lenders for deciding your home loan eligibility. Even if you earn a high income, having a poor score may pull down your chances of availing a home loan.

There still are more parameters like your ongoing loan obligations, property’s legal and technical approval, etc., which may be used to compute your home loan eligibility. Thus, also ensure to factor in these criteria before you apply for home loan.

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Disclaimer: This Article is for information purpose only. The views expressed in this Article do not necessarily constitute the views of Kotak Mahindra Bank Ltd. (“Bank”) or its employees. Bank make no warranty of any kind with respect to the completeness or accuracy of the material and articles contained in this Newsletter. The information contained in this Article is sourced from empaneled external experts for the benefit of the customers and it does not constitute legal advice from Kotak. Kotak, its directors, employees and the contributors shall not be responsible or liable for any damage or loss resulting from or arising due to reliance on or use of any information contained herein.