Loan amount eligibility
depends on various factors such as age of the applicant, interest rate, income, loan to value (LTV) of property
, etc. Banks check borrower’s income after meeting all fixed obligations to ascertain the loan eligibility amount. Usually banks allow loan repayment till the borrowers attains the age of 65 years or 70 years. So, suppose you are applying for a home loan at age of 50 years, in that case the bank will allow maximum repayment period of 15 years to 20 years. You can do reverse calculation using the EMI calculator to ascertain the maximum eligible home loan amount. Set the maximum allowed tenure, prevailing interest rate and select the loan amount that results in EMI close to Rs 25000 (Income after adjusting fixed obligations such as rent, other EMIs etc). Assuming, rate of interest at 7.5%pa and loan tenure of 15 years, the maximum loan amount eligibility would be around Rs 27 Lakh. Another way is 60% of income multiplied with number of repayment months allowed as per maximum loan tenure. For example, Rs 60% of 25000x15x12= Rs 27 Lac Banks also checkout the LTV. Banks allow lower of LTV
and amount arrived as per income after fixed obligation. For example, suppose you want to buy a home worth Rs 30 Lac. Assuming, bank is allowing LTV of 85% i.e. Rs 25.5 Lac. So, out of Rs 27 Lac and Rs 25.5 Lac, the bank will allow the lower amount as loan i.e. Rs 25.5 Lac.