How is loan eligibility calculated?
Loan eligibility is calculated based on your monthly income, existing financial obligations, age, credit score, and the FOIR (Fixed Obligation to Income Ratio). Typically, lenders allow 40-50% of your income for loan EMIs.
What is FOIR?
FOIR (Fixed Obligation to Income Ratio) is the percentage of your monthly income that goes toward all fixed obligations including EMIs and rent. Most banks prefer FOIR below 50% for loan approval.
How does credit score affect eligibility?
A higher credit score (750+) increases your loan eligibility and may get you better interest rates. Lower scores may reduce eligible amount or lead to higher interest rates. Some lenders may reject applications with scores below 650.
Does age affect loan eligibility?
Yes, most lenders require the loan to be repaid before you reach 60-65 years. Younger applicants can get longer tenures, which may increase eligible loan amount. Some lenders extend age limit to 70 for salaried professionals.
How can I increase my loan eligibility?
You can increase eligibility by: adding a co-applicant with income, clearing existing loans, choosing longer tenure, improving credit score, showing additional income sources, or reducing monthly expenses before applying.
What is the maximum loan tenure?
Maximum tenure varies by loan type: Home loans up to 30 years, personal loans up to 5-7 years, car loans up to 7 years, and business loans up to 15 years. Actual tenure depends on your age and lender policies.
Should I include other income sources?
Yes, include all stable income sources like rental income, interest from investments, or spouse's income. However, lenders may consider only 50-70% of such income for eligibility calculation. Provide proper documentation.
Is this eligibility amount guaranteed?
This is an estimated eligibility based on standard criteria. Actual loan approval depends on lender's policies, property valuation (for secured loans), employment stability, complete documentation, and final credit assessment.