How Much Home Loan Can I Get on My Salary?

Buying a house is considered a significant achievement, especially in Indian culture.

However, for the majority of the population, the aspiration of buying a house can only be achieved late in their lives after they have accumulated sufficient savings. This is where availing a home loan can catapult oneself to achieve their homeownership's wish.

But most of the time, the question that pops into our mind is how much loan can I get on my salary?

Because, lenders generally offer you the loan amount depends on criteria like monthly income, age, location, existing obligations, etc. This article will explain to you what part of the salary is taken into account and what are the factors influencing eligibility criteria and how to get a home loan quickly.

How Do Lenders Evaluate Your Monthly Salary?

At Shubham, we generally consider in-hand salary to determine the home loan amount. They consider the net monthly income by deducing monetary incentives from your in-hand salary such as

-Basic salary

-Medical allowance

-Leave travel allowance (LTA)

-House rent allowance (HRA)

-Other allowances, etc.

However, this is not the final amount taken by the employee; there are some compulsory deductions from the gross total such as Employee Provident Fund (EPF), Tax Deduction, and Professional Tax, etc. After this, what remains is known as the in-hand or net salary of an employee. This net salary is taken into account while calculating your home loan eligibility.

Once your net monthly income is gathered, lenders then demand the following documents as proof of income:

• Payslips of last six months
  
• Bank statements
  
• Form 16 of the past two years
  
• Certificate indicating TDS
  
• PAN card for identity proof
  
• Details of an existing loan, if any
  

If your monthly salary evaluation goes well, your home loan application can quickly receive approval from the lender.

Use a home loan calculator before applying for a home loan

A home loan calculator equates your monthly EMI payments using three factors – loan amount, tenure, and home loan interest rates.

If your net monthly salary is ₹40,000, you can get a home loan up to approximately ₹24 lakh. Likewise, if you earn ₹35,000 per month, you can get up to ₹21 lakh. Existing loan EMIs and obligations can lower the actual loan-to-value. Hence, foreclosing any existing loan or paying off credit card debts is an ideal way to increase your home loan eligibility.

However, a higher-income will fetch you a higher home loan. Suppose, if more than one member is earning in a household, the net monthly income of earning members can be combined to arrive at a higher home loan eligibility amount.

Conclusion: 

Keeping all these factors in mind, you can ensure the desired loan amount. It is recommended to use Shubham's Home Loan Eligibility Calculator before applying for a Home Loan. At Shubham Housing Finance, we look at your potential to repay the future loan and based on that we provide you with the loan.  

Let us know about any questions you have in the comment section below, also, you can reach out to us at 1800 258 2225.