Eligibility for Home loans in India
The monthly installments are calculated based on the monthly income of the individual. Housing Financial Companies (HFCs) use a graduated scale based on the different salary slabs.
The list below shows the percentage of monthly salary that is considered for EMI payments depends on the net monthly salary.
Monthly Salary - Percentage to determine EMI payments
Rs 8,000 to 9,999 – 45%
Rs 10,000 to 19,999 – 50%
Rs 20,000 to 34,999 – 55%
> Rs 35,000 – 60%
E.g. for an individual earning a monthly salary of Rs 25,000, 55% of his salary will be considered for EMI payments. For another individual is drawing salary of Rs 45,000 per month, Rs. 27,000 or 60% of his salary will be considered for EMI payments
All HFC’s lists the monthly EMI per lakh for varying tenures and interest rates. This can vary from HFC’s to HFC’s. Let’s try to understand it using the list below.
Monthly Income – Rs 25,000
Income available for RMI – Rs 13,750
Interest rate – 8%
Tenure – 20 Years
EMI per lakh – Rs 836
Home Loan Eligible – Rs 1,664,000
In case of self-employed persons different method of calculations are adopted.
In addition to the above, other consideration includes he profession of the borrower, the location of the property as well as the individual’s credit history.