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How Much Home Loan Can I Get on My Salary?

Updated: Apr 05, 2022
How Much House Loan Can I Get on Salary

“How much home loan can I get on my salary?” – The first question that boggles the mind of every salaried employee planning to purchase a house. This article will inform you how to calculate home loan eligibility based on salary, the general salary slabs, their eligibility loan amounts, and finally what is the method to apply for a home loan.

Owning a home is perhaps one of life’s greatest achievements. For first time owners, it brings in a sense of belongingness and immense satisfaction.

For the average salaried, middle-class Indian, skyrocketing property prices is a major deterrent in realising this dream. That’s where the home loan steps in.

Home loans by Grihashakti provide a range of financing options to salaried individuals. With affordable rates of interest, flexible repayment tenures, salaried individuals can now easily get a home loan to fund their property purchase.

How to Calculate Home Loan Eligibility on Salary?

You may be wondering about the amount of home loan that you may qualify for on your monthly salary. That is a valid concern to have. The maximum amount of home loan that you get is a critical factor in determining the budget for the property you will purchase.

An amount that would result in an EMI that is around 65% of their monthly net income or the salary in hand, assuming they don’t have any existing monthly obligations and a tenure of 30 years, and that they meet the rest of the required eligibility criteria. The lender will take into consideration your net income which is the amount you get credited in your bank account after all deductions. Please note that this is the best case scenario, and that the actual loan amount you may be able to get on your salary will depend on several factors, including the lender’s policy at the time of loan application.

Let us understand the home loan eligibility for a salaried person with the help of an example.

Let’s say, you receive a net monthly salary of Rs. 1,00,000, have no existing obligations, and wish to purchase a home worth INR 2 crores at an interest rate of 8.99% and a tenure of 30 years. Simply calculate your maximum home loan amount by multiplying it 65 times. In this case, the upper limit of the home loan is Rs. 80 lakhs.

If you have more than one earning member in the family, you may combine both net incomes to qualify for a higher home loan amount.

Take a look at the table below that will give you a sense of the amount of home loan you can get on specific monthly salaries. Please note that this is only for your understanding, actual eligibility will take into account several factors. Please use our home loan eligibility calculator to get a clearer understanding of how much home loan you can get on your salary.

Following Table Illustrate Your Home Loan Eligibility Based on Salary

Net Monthly Income in Rs. Loan Amount in Rs.
20,000 10,36,246
25,000 13,73,026
30,000 17,09,806
35,000 20,46,586
40,000 23,83,366
50,000 30,56,926

Home Loan Eligibility Criteria Based On Salary

Most lenders will have their unique set of eligibility requirements that the applicant needs to meet in order to apply for a home loan. However, there are some parameters that are common to all lenders.

You need to first check the home loan eligibility on your salary before you make your application to the lender.

Here’s a quick reference list:

  • Be an Indian resident.
  • Be at least 21 years at the time of applying for the loan and not more than 60 years at the time of loan completion if salaried and 65 years if self-employed.
  • If you are salaried, you must have a minimum work experience of 1 year, with at least 6 months in the current organisation.
  • Minimum annual salary of INR 1,20,000 for salaried individuals
  • Cash salary applicants may not be accepted.

The home loan criteria for a salaried person have a few additional requirements that need to be met.

  • Be permanently employed in a multinational company, public listed company or government service.
  • Be employed in organizations private limited companies, closely held or unlisted companies, partnerships or proprietorship organisations.

Additionally, make sure that you have a stable income, a good credit history and a credit score of at least 700.

Must Read : Minimum Cibil Score for Home Loan

Use Home Loan Eligibility Calculator For Salaried Person

If you wish to make doubly sure of how much home loan you can get on your salary, then the best way to ascertain that is to use the Home loan Eligibility Calculator available on the Grihashakti website. This free tool requires the prospective applicant to submit specific details such as monthly income and existing obligations.

Upon submitting the form, you instantly get an estimate of the amount of loan you can get.

Home loan Documents for Salaried Person

Grihashakti offers multiple home loan products that cater to the needs of the demanding Indian home buyer. The process of application is simple and straightforward.

Simply navigate to the website, fill up the pre-assessment form and simultaneously use the home loan eligibility calculator based on salary to check if you are a qualified applicant or not. If you meet the eligibility parameters, upload the softcopies of the following documents online.

General KYC Documents:

  • Submit Proof of Identity – Any one - PAN Card, Voter’s Card, Driving Licence, Employee Card.
  • Submit Proof of Residence – Any one - Aadhar Card, Latest Electricity Bill/Piped Gas Bill, Ration Card, Property Tax/Water Bill.

Income Paperwork for Salaried Individuals:

  • Submit 6 Months Bank Statements with Salary Credit.
  • Submit Last 3 months Pay Slips.
  • Submit Last two years - Form 16.

Property-related Documentation:

  • Submit Sales deed, stamped sales agreement of sale, or allotment letter.
  • Submit NOC from the housing society or property developer.
  • Submit Possession certificate and land tax receipt from the land/ land revenue / revenue department.
  • Submit a detailed estimation of the construction cost.
  • Submit a Bank account statement or payment receipt outline all information related to any payments made to the property developer or seller.
  • Submit Occupancy certificate. (applicable for constructed apartments)

Other Factors Impacting Home Loan Eligibility:

There are many other factors that impact home loan eligibility apart from the net take-home income. They are as follows:

  1. Age: Although you can avail of Home Loans between the age of 21 to 55 years, banks/financial institutes like to sanction loans to younger people because the loan tenor cannot extend beyond your working years, ensuring steady repayment ability throughout the loan tenure. 
  2. Employer and Work Experience: Your credibility would automatically increase if you are working with a highly reputed employer who has a good turnover. Similarly, work experience tells a lot about your stability and acts as a positive pointer in the loan application.
  3. Credit Score: CIBIL score is one of the most crucial factors that a lender considers while sanctioning a home loan. Your credit or CIBIL score showcases your capability to repay any loan by tracking your past payment record. A credit or CIBIL score of 700+ is considered a good CIBIL score for home loans. It also helps you in bargaining for lower home loan interest rates.
  4. Existing Obligations (also known as Fixed Obligation to Income Ratio(FOIR)): Banks/financial institutes decide your home loan amount eligibility only after considering your existing responsibilities concerning EMIs and pending dues of other loans which you might have availed like a personal loan, car loan, credit cards, etc. They calculate FOIR as the percentage of a sum of all your existing monthly obligations to your net monthly income. Financial institutes use this method to assess the ability to pay EMIs regularly and comfortably.
  5. LTV (Loan to Value): LTV ratio is the percentage of the property value that a bank/ financial institution can fund up to a property buyer. Lenders determine the LTV ratio before sanctioning a home loan to ensure that they do not lend an amount higher than the property’s actual value. A higher LTV raises your perceived risk whereas a lower LTV ratio can get you better terms, including interest rates, on the home loan.
  6. Property’s Legal & Technical Approval: While granting a home loan, the health of the underlying property is crucial for the lender. Banks/financial institutes have two main criteria for evaluating the property you are about to purchase. The first one is to verify the legal chain of the property to establish a clear title & ownership and the second one is to determine the market value of the property. 

In Conclusion

Before you commence with your home search, knowing how much home loan you qualify for is extremely important. To know more about home loan options at Grihashakti, feel free to contact us to get more information.

*Terms and Conditions apply. Loans are disbursed at the discretion of Fullerton Grihashakti.

Fullerton India Home Finance Company Ltd
CIN number: U65922TN2010PLC076972
IRDAI COR No: CA0492

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