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What are the eligibility criteria to get a home loan?

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Created on
January 18, 2023


What’s Inside

What is a home loan?

First things first, a home loan is a specific type of loan that you take to either buy or construct a house. While it is the same as any loan in the fact that it’s a sum of money lent out to you, there are a bunch of reasons why a home loan is called a home loan. If you’re on the fence about whether or not you should buy a house, use this Rent vs Buy calculator to help you make a decision.

For one, the interest rates are competitive, and different banks offer different rates. As of Jan 2023, most banks offer home loans in the range of 8-9%.

As a borrower, you can claim the interest paid on loan as an exemption from your annual taxable income. This makes it a tax saving instrument too, as the government wants you to take loans to buy a home instead of putting in your own capital. The money you pay as interest to the banks goes towards nation-building and the general upkeep of the banking system.

Home loans are different from personal loans in that personal loans are given to you for any sort of miscellaneous personal purpose.

What are the eligibility criteria for home loans?

Age of the applicant

Lenders typically set some age criteria for borrowers who wish to avail a home loan. This is generally in the range of 18 years to 60 years. In some cases, lenders may allow borrowers up to the age of 70 to avail of a loan. This helps ensure that borrowers are within the working age and can earn the income needed to repay the loan. 

The nature of employment

Lenders generally tend to prefer borrowers with a job and a steady source of income. This means salaried employees with a career record have a good chance of qualifying, assuming other criteria are met. Self-employed people can also borrow home loans, but they will have to provide proof of the profitability of their business. 

The income level of the applicant

Borrowers will also have to meet specific income level criteria set by lenders. The exact level of qualifying income will vary from one lender to another. It will also be different for salaried and self-employed borrowers.

Repayment ability 

Before approving a home loan, banks and other lending financial institutions also look at the repayment capacity of the borrower. Many lenders tend to ensure that the EMIs charged do not exceed 50% of the borrower’s income. This minimises the chances of default since the borrower will have a higher ability to repay the loan if it is more affordable. You can use a home loan EMI calculator to check if you’re able to meet the repayment schedule.

Credit score 

The credit score is one of the most important factors that lenders consider before approving or rejecting an application for a home loan. Generally, credit scores of 650 or above are considered to be good ratings by lenders, making it easier for applicants in this category to get a loan. However, having a credit score of 750 or over is even better, so you can improve your eligibility for a home loan and get favourable interest rates. 


The eligibility criteria set for home loans are set in place to ensure that the borrower has the financial capability to repay the loan. Although the exact mechanism for how the eligibility for home loans is calculated may vary from one lender to the next, the criteria outlined above are broadly what you need to be aware of. Once you decide on a particular lender, you can do some research to identify what their exact qualifying criteria are, so you can decide how to proceed with your application. 

On Fi Money, you can check your eligibility and get pre-approved loans that are disbursed instantly. The entire process is paperless, and takes just a few minutes. 

Frequently Asked Questions (FAQs)

How to improve my eligibility for a home loan?

To improve your eligibility for a home loan, you can work on improving your credit score, securing a stable job and having a regular source of income. These factors all affect the eligibility for home loans, so it helps to improve your standing in these areas. 

How to check home loan eligibility based on my salary?

Different lenders have different limits when it comes to deciding what the qualifying level of salary is for availing a home loan. To check your home loan eligibility based on your salary, you can either get in touch with the lender, or, if they have an online eligibility calculator, you can enter your salary details to check if you qualify. 

What are the eligibility criteria for a home loan?

The exact eligibility criteria may vary slightly from one home loan lender to another. However, broadly speaking, lenders look at different factors like the age of the applicant, their employment status, their income level and their credit score.


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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