Factors That Affect Home Loan Eligibility


Are you looking to apply for a home loan? There are many lenders in India that are willing to offer home loans at affordable interest rates. However, before you proceed with initiating the process, it would help if you check the lender-specific eligibility requirements.

Every lender may have their unique requirements, like you must be a citizen of India, you must be aged between 18-65 years, etc. To understand the home loan eligibility criteria better, let us look at the various factors that affect the eligibility.


When you apply for a loan for home, the lenders consider your age as one of the most critical factors to determine your eligibility. The reason why age plays a vital role is that the lender will compute the repayment structure based on the number of years you will be employed or before you retire.

When you apply for a home loan during the early years of your career, you can get your loan application sanctioned without any hassles and you may even get a higher value loan with better interest rate than those who are older than 50 years at the time of applying for a home loan.

Credit score

Most lenders in India have a minimum credit score requirement. However, if your credit score is more than 750 and closer to 900, you have better chances of getting your loan sanctioned and you may even get a discount on the interest.

The credit score has a direct impact on the interest rate levied by the lender. This is because your credit score reflects your credit behaviour, repayment history and whether you have defaulted on the loan repayments in the past. If you have a high credit score, it means you are a responsible borrower and have a commendable credit history.


The maximum amount you can borrow greatly depends on your annual income. This is because your income reflects your repayment capacity. The lenders based in metropolitan cities like Mumbai or Delhi may have stringent stipulations on the minimum income required to qualify for the loan compared to smaller towns like Kanpur or Gurugram.

For instance, if you are based on a smaller town like Nagpur, you can get a loan up to Rs. 1 crore if your salary is 35k or more per month. However, if you are based in Mumbai, the lender may have a higher income requirement of up to 50K or more per month for availing a similar loan amount. This is because of the higher cost of living in the cities.

The experts suggest that the EMI must not be more than 30-40% of your monthly income. You can use the EMI calculator for home loan to compute the EMI for the loan you wish to borrow. So, make sure that you assess your income and choose the loan amount accordingly.

Employment status

Your employment status plays a vital role in determining your home loan eligibility. You would have better chances of getting the home loan approved with favourable terms and conditions if you are employed in an MNC or a government organisation. This assures that you get a regular income.

If you are self-employed or own a business with stable income, the lender may offer you flexible repayment terms as per your repayment capacity. However, if you have unstable income or if you have changed jobs frequently, the lenders may consider you a risky borrower and may charge a higher interest rate. In some cases, the lender may even reject your loan application.

Final Word

Once you know the eligibility for home loan, you can approach any lender of your choice and start the application process.

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