Home Loan Eligibility Based On Salary with Calculator - YouTube

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Hello, my name is Mukul and you are welcome to the Asset Yogi

Where we unlock the knowledge of real estate and finance

Assume you want to buy a house for yourself

Then the question that arises here is

How will you do its financing?

One way that you have is that

If you have the full amount in your savings

Then you can withdraw the money from the investment or savings

And can invest in the house

The second way is that you can withdraw some amount from the savings

And the rest will be paid by the loan

And the home loan is a very good way to finance

Because the home loan is cheaper and its interest rates are minimal

So the maximum amount of loan

Is dependent on your salary

But there are many different factors

On which your home loan eligibility is dependant

So what is the formula for a home loan eligibility?

What are the factors on which your loan eligibility is dependent?

In this video, we will talk about these things in detail

And along with this, I'll show you a home loan eligibility calculator

I will give you its demo

I've put options in the calculator

You'll know all the things like how much you can take the loan

How much is the maximum amount you can spend to buy a house?

How much you'll pay as principal and interest

Over 20 years, 30 years?

How much soever you take a loan

You'll know these things from that

And in the same series, I will make another video

And I will talk about how you can increase your home loan eligibility

We will talk about that also

In another video

In this video, we will talk about how eligibility is calculated?

Let's go straight to my computer screen

First, we will understand how the home loan eligibility is calculated?

What is the exact formula for that

But before that, we will understand a logic

That what logic does the bank have

Whenever it calculates home loan eligibility

So assume that your income is "I", let's say it is 50,000 Rs per month

Then your home loan eligibility is dependent on this

So the bank says that

You will cover 50 % of your expenses with your income

And with the rest 50%, you can do savings

Because you will need 50% for your household expenses

And the 50% that you are saving, you can deposit in your EMI

So you can pay EMI with a maximum of 50% of your monthly income

According to that only, your home loan eligibility is calculated

Now we will its formula

The formula for a home loan eligibility is

Your monthly fixed income×50%

As I have explained to you that this 50% portion

You first calculated its 50%

Out of that if you are paying another EMI

Assume you have your personal loan, car loan

Education loan, you are paying EMI for that

You will subtract that from this

And then the amount will be divided by per lac EMI

How is this per lac EMI is calculated?

Generally, if there is a banker

Whoever is giving you a home loan

He has an EMI chart, it looks somewhat like this

He has that for every year

For as many years as you want

He has a chart for per lac EMI

So that you'll know how much EMI will you get for a loan of Rs 1 lac

Assuming the interest rate as 10.5%

So your per lac EMI will be this

5 years, 10 years, 15 years, 20 years, 25, and 30 years

I have given you the chart

This EMI is given in the chart

But I have made an EMI calculator for this

It is quite detailed

I have also made a video about that, you can search it on youtube

So download the EMI calculator

You'll know the exact EMI

For how many years, whatever the loan amount, whatever interest rates

You can put all these inputs, you can change them also

You'll know the exact EMI

you don't need to approach any banker

So now we will see, we will understand by the example

That what will be the loan eligibility amount if we take the example of 50000

So assume your monthly fixed income is 50000 in hand

And then you will multiply it by 5 %

After that, assuming you have another EMI of 10000

Including all the loans

We will subtract that amount

And we will divide it by per lac EMI

The per lac EMI will depend on your loan tenure

So we will assume that a standard home loan is of 20 years

Its per lac EMI is 1000 Rs

At the interest rate of 10.5%

If we divide it by that, if divide it by 1000

So the amount that you have is

You divided 50,000 by 2

25,000-10,000 (subtraction)

Divided by 1000

By our per lac EMI

So the amount is 15000 divided by 1000

The amount we get is 15 lac Rs.

You are eligible for a maximum of 15 lacs

And you can get a loan for that

So in this way, you can calculate

EMI for as many loan tenure as you want

I am giving you an EMI calculator

You can calculate your EMI with a calculator I am giving

for 1 lac Rs

And you already know your fixed income and you know

How much EMI is going on,

So you can easily calculate your loan eligibility by yourself

And if you don't want to do it by yourself

Then I'll give you a calculator for that and I'll show you the demo

You'll get other details in that

How much you can afford, what is the total amount of house that you can afford?

How much will you pay for principal and interest?

We'll get all these things, I will give a demo for that also

But before that let's understand that what are factors on which loan eligibility is dependent?

We understood that this is the formula for loan eligibility

We have to understand the other factors too

First, we will understand the quantitative factors

Quantitative factors are those factors that are dependent on financial numbers

So like your monthly income, as we have seen that loan eligibility is dependent on monthly income

After that, it is dependent on the loan tenure

So the per lac EMI is dependent on your loan tenure, you are seeing it or not

If you take a loan for fewer years, then your EMI will be more

But if your loan period extends if it is 20 years then your EMI decreases

Per lac EMI

If the per EMI decreases, then your loan eligibility amount increases

Because your denominator will decrease and your loan eligibility amount will increase

Then the third factor is that it depends on the interest rates

Like we have taken here 10.5 %

Assume if your interest rate decreases to 8.5%

As the current rate of home, loans is 8.5%

So in that case your per lac EMI assuming for 20 years

So it will decrease to approx 850 Rs

So in that case your per lac EMI decreases

And your loan eligibility amount will increase

The fourth, as we have seen that if your other EMI is going on

It also depends on that

So if your other EMI is going on

Then your loan eligibility amount will decrease naturally

And the fifth factor is the loan to value ratio

Which is not reflected in this formula

I will explain this to you

What's happening, in this case, is that

Your loan amount is also dependent on your property value

You get the loan at a maximum of 80% on property value

So assume your property value is 50 lac Rs

Then 80% of the property value

Then you'll get a loan for only 40 lac Rs

The maximum loan can be 40 lacs only

And you have to do a down payment of the rest 10 lac Rs

You have to give a down payment amount from your pocket

We can call this out-of-pocket expense

We can call it, out-of-pocket investment

So you have to spend these 10 lac Rs from your pocket

And you will get a loan for the rest of 40 lac

So on this too, your loan eligibility depends

So these were all quantitative factors, which are dependent on numbers

Now some are qualitative factors

What is your age, what is your credit history?

So this risk profile is studied

So we will see all these qualitative factors too

So these are all the qualitative factors like the first is a type of property

So if the property is registrable, then you will get the loan on that very easily

Like if you have a ready to move property

That can be registered easily

Or there is some under-construction property

You'll get the loan on that easily

Now under construction property, you can also construct your house by yourself

You may have booked a flat of some builder

In that case, you'll get a loan

But in an under-construction property, the payment is done stage wise

Whatever the bank, assume your 20% construction is done

Then it will release only a 20 % amount

And if its done 50% then they will release 50%

But they will release 100% in the case of ready to move property

There is no need of stage by stage payment

Because you are buying immediately

Then the bank will release a 10% payment as soon as you register your sale lead

And the second is the properties

That cannot be registered

Assume the property is being sold on general power of attorney

Then you'll not get the loan on that easily

And second, assume if you are buying a plot then you don't get the loan on that also

And the other factors are there, like what is your age

Assume you are young and you are 25 years old

So your working age is quite long, so you can get a maximum loan of 30 years

As you are seeing here, you can take a loan for 30 years

Then your loan eligibility increases

Assume if you are 50 years old, then your left working age is 10 years

60 years is considered to be the retirement age

So, in that case, you'll get a loan for a maximum of 10 years

And assume if you get pension after retirement, then the bank can consider it

So in this case, according to your pension, it can increase your loan eligibility

Then there is a factor called a credit history

You may have heard about the cibil score

Cibil score tells us that how was your transaction and payment history

Whenever you took EMI or loan

So you did the payment on time or not

So this score is out of 800

If your score is 700 plus then you get a loan very easily

But if your score goes below 700

Assume you did default then your cibil score will be ruined

It may be somewhat less

So in that case, how can you increase or improve your cibil score?

What is a cibil score?

I'll make a detailed video about this too

Then make sure to watch those videos too

The loan eligibility is often dependent on your credit history

If your credit history is too bad, then it is possible that

The loan will not be sanctioned in the first place. This is also possible

And another factor is qualifications, assume you have done some professional degrees

Assume you are B.Tech, MBA, CA, Doctor

Then it also depends on that

You may get offered better interest rates

And your loan can be sanctioned quite easily

How's your work experience? What are your growth prospects?

Loan eligibility depends on that

Then how is your professional stability

As I said assume you are professional, you are CA or doctor

Or you are an architect or you are working in a software industry

Then your stability is considered good

But some sectors are considered to be unstable

Where the jobs are lost easily, the attrition rate is high

For example, the BPO industry, according to banks, is considered unstable

The loan doesn't get approved easily

Then how is your employer category?

How big is your company is?

How stable is that?

They are kept in A, B, and C categories

So the employers of A categories, the big companies

They get offered the better interest rates

And they get loans very easily

So better interest rates mean the employees will get lower interest rates

Your family background is also checked

Assume you are working in the BPO industry

But your family background is quite good

Your family have professionals

Your family owns various assets

These things will be checked

And the other factor is how is your expense pattern?

Assume as I have said in the example

That your salary is 50,000 Rs

And you have only two dependents

Assume one is your wife and the other one is your child

So fewer people are dependent on you

And your salary is good

So your loan will be approved easily

And your loan will be sanctioned on full eligibility amount

But assume if your salary is only 20000

And 4 people are dependent on you

So, in that case, you need a little more money to meet your expenses

It may be possible if we talk about the 50% then

10000 may not work for you

So in that case, the bank can decrease your eligibility

So the bank will consider the EMI of 8000 instead of 10000

And maybe for 20 years, the loan of only 8 lacs get approved

So I have told you about how the home loan eligibility is calculated

On what factors it is dependent?

We have seen quantitative factors and qualitative factors

Now I'll show you a calculator

Which I have made myself

It will tell you the exact amount

For how much loan are you eligible for?

And with that, it will also tell you the amount you can buy the house with

And how much will you pay for principal and interest on your loan?

So let's see the demo of that loan eligibility calculator

So this is the home loan eligibility calculator

About which I've talked about

So here I'll show you the demo

What are all input and output values

The one's which are marked with the yellow color is input values

You can change them

And the rest are output values, that you cannot change

They are locked

These are the input values, I have put the same values as an example

That we've talked about

Assume your income is 50000 and your loan tenure is 20 years

The interest rate is 10.5 % per annum

And the rest of the EMI is 10000

So you can see that it is giving you all the outputs

The maximum eligibility of loan amount is 15 lacs

You can see it in green color

You can pay EMI of a maximum of 15000 for a home loan

And along with that, it is also showing you in blue color

The maximum amount with which you can buy the house

So for example, in this case, you can buy a house of approx 18,50,000 Rs

Our of which you have to arrange 3.5 lacs by yourself

And you'll get a loan for 15 lac Rs

With that, it also tells you the principle and interest amount

You have to pay a total interest of 21 lac Rs in 20 years

And you have to pay 15 lacs as the principle

So you can also see that you are paying approx 58% interest

So your interest amount is quite high in this case

If you want to decrease your interest amount then you can play around here

If you do it for 10 years, if you can pay early

So you'll see that interest amount decreases suddenly

In 10 years, the interest amount is 7 lacs

From 21 lacs to 7 lacs, it means that you are saving straight 14 lacs

But your EMI is 15000, so this is happening

Your loan amount eligibility decreased,

Then you can take a maximum loan of 11 lacs Rs only according to your salary

So you can see that how much amount of loan you want to take

Assume you want to take a small property and it will come for 14 lacs only

Then you will save very much in interest

You can see in this way

and assume you want to purchase big property

So in that case, if you can decrease the rest of the EMI

Then try and see by putting 0 amount here

How much are you eligible for?

In this case, you can see that your loan amount has increased

Your loan eligibility is 18.5 lacs

Because you can pay 25000 Rs as EMI of home loan

And your budget for the house has also increased

You can buy a house of 23 lacs in this case

So you can change all these values

According to your salary,

You can calculate

Maximum how much loan can you take?

How much can you afford for a house?

You'll get to know every thing with this

So in this video, we saw how to calculate home loan eligibility

On what factor it is dependent?

And with this calculator, in what ways you can put your inputs and calculate your maximum eligibility

How much will be your EMI?

How much maximum can you spend on a house?

With this, I'll also make one more video

After this video

In which we will talk about

How can you increase your home loan eligibility?

In that, I'll give you some tips

That how can you change your pattern

You can change your income

You can change your loan tenure

What are ways in which you can increase your home loan eligibility?

We will talk about these things in detail

So please make sure to watch my next video

So that's all in this video

If you want to suggest the topic related to finance and investment

Then comment it below

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Till then keep learning, keep earning

And be happy as always