What is loan eligibility?

Every borrower needs to meet the eligibility criteria required to qualify for a loan. This ensures that he/ she can repay the loan amount effortlessly without defaulting. Failing to meet the eligibility criteria may lead to rejection of the loan application, leaving a negative mark on the individual’s credit profile. So, ensure to complete the processing faster and smoothly by fulfilling the required eligibility criteria.

How is loan eligibility calculated?

The eligibility calculator functions on a mathematical formula to evaluate the eligible loan amount. It takes into consideration loan tenor, net monthly salary, existing obligations or EMIs, other Net incomes, etc.

How to check loan eligibility?

Individuals can easily check their loan eligibility criteria on this website of their preferred lending institution. Although most key requirements are usually the same, certain eligibility criteria may differ from lender to lender. These eligibility criteria are basically a set of parameters based on which a lender can assess a borrower’s creditworthiness and past repayment behaviour. It depends on several factors, including credit history, age, credit score, financial obligations of an individual along with FOIR and financial status.

Another easier and quick way to determine loan eligibility is to use an online loan eligibility calculator. One can use this calculator to work out a personalised quote that can possibly meet the loan amount requirement on favourable and affordable means.

Here's the formula to calculate EMI:

Where
E is EMI
P is Principal Loan Amount
r is rate of interest calculated on monthly basis. (i.e., r = Rate of Annual interest/12/100. If rate of interest is 10.5% per annum,
then r = 10.5/12/100=0.00875)
n is loan term / tenure / duration in number of months

We understand that all of this may seem overwhelming to look at. However, with Mosampati’s EMI calculator, all you need to do is:
Enter the loan amount you want to apply for
Enter your Net Income in Monthly
Enter EMIs of any existing loan along with other obligations in Monthly
Enter Expected interest rate
Enter Loan Tenure (in months)
Once you key in these details, the EMI Calculator will offer accurate results for:

Your Principal Amount
Monthly EMIs
Total Payment, i.e., Principal + Interest to be paid, over the course of your repayment tenure.

How to use a loan eligibility calculator?

Potential borrowers can easily use an online loan eligibility calculator following some quick steps as mentioned below.

First, individuals need to enter their respective fields of the calculator.

Next, one needs to set a value for some parameters on the loan eligibility calculator. These include:

1. Loan Amount
2. Net Income
3. Existing Loan EMI
4. Tenure
5. ROI (Rate of Interest)

Before going forward with a loan application, individuals must assess all eligibility criteria prescribed by various lenders. This will help one to opt for a lender that can provide housing loans at attractive terms to make repayment comfortable with EMIs spread over a favourable tenor.

What Factors determine your loan eligibility?

When you apply for a loan, your eligibility is primarily dependant on your income and repayment capacity.
There are also some other factors that will determine your loan eligibility:
Your age, financial position, credit history, credit score, other financial liabilities etc.