Sidhi & Associates

Home loan eligibility is calculated based on your monthly income, existing EMIs, interest rate, and loan tenure. Banks typically use the Fixed Obligation to Income Ratio (FOIR) of 50-60%. Formula: Maximum EMI = (Net Monthly Income × 0.50) - Existing EMIs. The loan amount is then calculated using: Loan Amount = [EMI × (1 - (1 + r)^-n)] / r, where r = monthly interest rate and n = tenure in months. Our calculator uses these standard formulas to give you an accurate estimate.

Minimum home loan amount varies by bank, typically starting from ₹1-3 lakhs. Maximum amount depends on your income, credit score, and property value. Most banks offer up to 90% LTV (Loan-to-Value) for properties below ₹30 lakhs, 80% for ₹30-75 lakhs, and 75% for higher values. Top earners with excellent credit can get loans up to ₹5-10 crores. Co-applicants can significantly increase your eligibility. The actual sanctioned amount will be the lower of: calculated eligibility based on income or property value × LTV percentage.

Minimum salary requirements vary by bank and loan amount. Generally, banks require ₹25,000-30,000 monthly income for salaried and ₹4-5 lakhs annual ITR for self-employed. For specific loan amounts: ₹20L loan needs ~₹40K salary, ₹50L needs ~₹1L salary, ₹1Cr needs ~₹2L salary (at 8.5% for 20 years). These are approximate figures assuming no existing EMIs. Higher income, better credit score, or adding a co-applicant can help you qualify for larger loans. Use our calculator with your exact income to get precise eligibility.

While possible, getting a home loan with a low credit score (below 750) is challenging. Score 650-750: May get loan but at higher interest rates (0.5-2% more) with stricter terms. Score below 650: Most banks reject or require substantial down payment (30-40%) and guarantor. To improve chances: 1) Add co-applicant with good score, 2) Offer higher down payment (30-40%), 3) Show stable income and employment, 4) Provide collateral, 5) Consider smaller loan amount. Better approach: Improve credit score first by paying dues, maintaining low credit utilization, and correcting errors in credit report.

Choice depends on your financial goals. LONGER TENURE (25-30 years): Lower EMI, higher eligibility, more tax benefits, but significantly higher total interest. Example: ₹50L at 8.5% for 30 years = EMI ₹38,400, total interest ₹88L. SHORTER TENURE (10-15 years): Higher EMI, lower eligibility, much less interest paid. Same loan for 15 years = EMI ₹49,200, interest ₹38L (saves ₹50L!). Best strategy: Take longer tenure for eligibility but prepay aggressively. This gives flexibility during financial stress while reducing interest through prepayments.

Loan-to-Value (LTV) ratio is the loan amount as percentage of property value. RBI guidelines: Properties up to ₹30L = 90% LTV (10% down payment), ₹30-75L = 80% LTV (20% down payment), Above ₹75L = 75% LTV (25% down payment). Higher down payment (lower LTV) means: Better interest rates (0.25-0.5% discount), faster approval, lower EMI burden, more negotiating power. If your eligibility is higher than 75-80% LTV, you'll get loan limited to LTV percentage of property value, not your full eligibility.

Yes! Joint home loans offer multiple benefits: 1) HIGHER ELIGIBILITY: Both incomes combined increases loan amount, 2) TAX BENEFITS: Both can claim ₹2L interest + ₹1.5L principal deduction each = total ₹7L deduction, 3) LOWER INTEREST: Some banks offer 0.05% discount for women co-applicants, 4) EASIER APPROVAL: Two income sources reduce risk. Requirements: Both must be co-owners of property, both sign loan agreement, both are equally liable for repayment. Ideal when both are working professionals wanting to maximize loan amount and tax benefits.

Section 24(b): Deduct up to ₹2 lakhs interest per year on home loan (both self-occupied and rented property). Section 80C: Deduct up to ₹1.5 lakhs principal repayment per year. Section 80EE: Additional ₹50,000 deduction for first-time buyers (loan up to ₹35L, property up to ₹50L). Section 80EEA: Extra ₹1.5L deduction for affordable housing (stamp duty value up to ₹45L). Joint loan: Each co-borrower can claim these deductions separately, effectively doubling benefits. Pre-construction interest: Allowed in 5 equal installments after possession. Note: These are available only in old tax regime.

Depends on multiple factors: PREPAY IF: 1) Loan interest rate > expected investment returns (8.5% loan vs 7% FD), 2) You're risk-averse, 3) Peace of mind is priority, 4) You've maximized tax-saving investments, 5) Nearing retirement. INVEST IF: 1) Can earn >10-12% returns consistently, 2) Young with long investment horizon, 3) Haven't maxed out EPF/PPF/ELSS, 4) Have emergency fund, 5) Comfortable with debt. BALANCED APPROACH: Do both - invest in equity/mutual funds while making small prepayments annually. Use loan tenure of 20+ years for lower EMI, but target finishing in 12-15 years through prepayments.

Immediate steps: 1) INFORM BANK: Contact immediately, don't avoid calls, 2) REQUEST MORATORIUM: Some banks offer 3-6 months payment pause (interest still accrues), 3) RESTRUCTURE LOAN: Extend tenure to reduce EMI, switch to interest-only payments temporarily, 4) USE EMI PROTECTION: If you have loan insurance, file claim. Prevention: Maintain 6-12 months EMI as emergency fund, consider EMI protection insurance (costs 0.5-1% of loan), avoid stretching to maximum eligibility. Missing EMIs damages credit score, incurs penalty (2-3% + interest), and risks property attachment after 90+ days default. Always communicate with bank proactively.