A loan eligibility calculator streamlines your house hunt and saves valuable time in the loan application process. This article explains its utility.
Life is such that it throws several challenges your way before it makes the fruition of dreams possible. It’s always said, ‘Life is not easy!’ But in achieving what seems impossible lies the stuff of dreams. The harder the journey, the sweeter the destination!
However, you can certainly try to take away some roadblocks on the way. Take, for example, the process of buying your first home. The task is arduous and you have limited resources at your disposal. But you also want to buy the house you’ve been dreaming of and you’re willing to go the extra mile for it. So how can you reconcile finding an expensive house with applying for a home loan? Simple: use a loan eligibility calculator before you decide.
What is housing loan eligibility?
Housing loan eligibility is the amount of money you can get as a home loan. Most first time buyers assume that they can apply for the home loan and get as much money as they want. However, the bank calculates how much money you can get based on your income, age, number of working years left, credit score and city of residence.
Thus, you might believe that you can buy a house costing a certain amount of money, when the reality is that the loan amount can cover much less. Also, the loan is calculated to about 80% of the house’s value, so the remainder must come from your resources.
Using a loan eligibility calculator makes the task easier
A loan eligibility calculator is an online tool that computes your eligibility in real time. This is why you should use the home loan calculator:
- It gives you a definite direction to go in with respect to the house hunt. Once you know your eligibility, you can look for houses within budget.
- It saves times in the application process – you can use the loan eligibility calculator by yourself instead of waiting for the bank to tell you your housing loan eligibility later.
- It helps you plan your finances better. Since you must pay 20% of the house’s cost from your own funds, you can plan your personal finances in a better way and look to dip into your savings, investments, etc.
- It removes the guesswork you would normally indulge in when computing your eligibility. The home loan calculator may not give the exact figure, but it gives the closest approximation.
Thus, the loan eligibility calculator removes the guesswork from the loans process and puts one on the correct path to financial planning.