Craig Bowen 
The home loan amount you can afford is determined by the amount you can pay by the EMI (equated monthly installment). The home loan EMI amount must be computed while availing of a fresh loan and when switching or transferring the loan to another home loan lender.
Here is how you can compute your home loan EMI:
Determine the loan amount
To understand your home loan eligibility, begin with your overall annual income. You typically can avail of a home loan of around five times your yearly income. This multiple might differ from lender to lender and depend on numerous other parameters like overall repayment capacity and the nature of the profession.
Additionally, your loan amount depends on the property value. Lenders’ maximum loan amount can be up to 75 – 90 % of the property value. Though the ultimate loan amount will depend on parameters like property value, rate of interest, and loan repayment tenure, you can begin with an estimated loan amount.
Find the correct loan repayment tenure.
Generally, a home loan is a long-term loan, wherein few lenders may offer a tenure of up to 20-30 years. Ensure to note that a higher home loan tenure means involvement of a higher interest amount. Usually, lenders permit a repayment tenure where the loan repayment must be done by the time you approach the age of 60. Therefore, if you are already 40 years old, you can avail of a tenure of 20 years; however, if you are 50, you can get a maximum repayment tenure of 10 years.
The typical limit lenders apply on EMI amount calculation is that your overall EMI of all existing loans must not exceed 50 percent of your monthly income. However, suppose your EMI for the desired loan amount is over this limit. In that case, lenders may reduce your loan amount or enhance the tenure if you are eligible for a higher repayment tenure.
Know the best rate of interest.
While all the home loan seekers would want to avail the lowest home loan interest rate, this may not be possible because of various factors. Every lender has certain housing loan eligibility rules for the property kind and the borrower segment it can lend to. For example, many lenders may offer the best rates to salaried individuals, while others may offer lower rates to those with a higher credit score of 750 and above. In addition, lenders provide many female loan seekers with a special rate to encourage more females to become financially prudent and responsible.
How can you compute your EMI using the home loan eligibility calculator?
Various online home loan eligibility calculators can assist you in computing your EMI easily. Such calculators can be found on the lenders’ websites and aggregator portals. Once you know the above three factors namely the principal loan amount, loan tenure, and interest rate – you can input them into their respective slots on the calculator. You can even use the slider to adjust the figures based on your repayment capacity.
Once you have entered the three important values, the home loan eligibility calculator will automatically show the EMI amount in seconds. Additionally, remember you can keep adjusting and changing the values, and the EMI calculator will display accurate and instant results, thus helping you customize your loan depending upon your comfort. Therefore, once you derive the final EMI through the calculator, you can apply for a a home loan with the selected lender.
