Eligibility simply means how much loan you can get from a lender- Bank/NBFC/HFC. Mortgage loan eligibility therefore, means how much loan you can get against the pledge of your property. The residential, commercial as well as, industrial ownership/ joint ownership property, can be pledged. The bank loan eligibility check is a combination of your income eligibility and the eligibility as per the property value.
There are multiple factors that affect your property loan eligibility namely,
- Your age.
- CIBIL score.
- Residential status.
- Dwelling city.
- Employment status – salaried, NRI, self-employed, or self-employed professional.
- Nature of business whether manufacturing, retailer, service, etc.
- Income source.
- Employment details such as monthly income, years of experience, type of industry, etc.
- Type of company you are working in – partnership, private ltd., or proprietorship firm.
- Business details such as nature of business, business vintage, profitable or loss-making, etc.
- Number of obligations.
- Loan induce.
- Type of loan – mortgage term loan, mortgage overdraft loan, mortgage loan balance transfer, top-up loan on a mortgage loan, or lease rental discounting.
- Type of property mortgaged whether residential, commercial, or industrial. Also whether the property to mortgage is vacant, self-occupied, or rented out.
- The market value of the property that is to be mortgaged.
There also can be additional factors affecting your loan amount eligibility which will be case-specific depending upon the lender to lender & to their policies. For instance, new business loan eligibility against property mortgage, startup business loan eligibility against property pledged, doctor loan eligibility for a mortgage, mortgage overdraft loan eligibility,mortgage top up loan eligibility, joint loan eligibility, mortgage loan eligibility on salary received in cash, maybe different with the different lenders owing to their different criteria for loan against property. (Also, read benefits of applying for joint loans)
Also Read: NRI Loan Against Property In India.
Eligibility Criteria For Loan Against Property
Given below is the loan against property eligibility criteria for all eligible profiles including the resident salaried, self-employed, professionals, & NRIs.
|Age||Minimum 21 years & Maximum 70 years|
|Maximum Loan Eligibility||Up-to Rs.10 Crores.|
|Loan Tenure||Up-to 20 years.|
|Minimum Income Eligibility Criteria For Mortgage Loan.||* Loan eligibility forsalaried person – Rs.30,000/- pm. |
* Self employed loan eligibility – Rs.3,50,000/- p.a.
* For NRI – 26,000 USD p.a. or 84,000 AED p.a.
|Mortgage Loan Interest Rates||Starts from 7.70%* onwards.|
|Eligible Property||Vacant/ self-occupied/ rent out residential, commercial, or industrial property|
|Minimum Work Experience for Salaried||3 years.|
|Minimum Business Stability for Self-Employed||5 years.|
|LTV – Loan To Value (% of the property value)||* Residential – 55% -70%. |
* Commercial – 50% -60%.
* Industrial – 40% – 50%.
|FOIR – Fixed Obligation To Income Ratio||* Salaried – 60% of net income per month. |
* Self-Employed – 65%-70% of the net profit.
|CIBIL Loan Eligibility||Satisfactory CIBIL scores of 750 & above|
The two important parameters used to assess your eligibility are the FOIR & LTV. FOIR is a fixed obligation to income ratio while LTV stands for loan to value. FOIR is a debt-to-income ratio and is a true reflection of your disposable income and an indicator of your repayment capacity. LTV on the other hand helps you to know the maximum loan amount you can get against the property.
How is loan against property eligibility calculated?
You can easily calculate your secured loan eligibility once you have the formula to calculate it. The formula to calculate the LAP loan eligibility is as follows.
Mortgage eligibility = Lower of A & B:
A. For Salaried
((Net income per month X 60% FOIR) – Obligations) ÷ Per lakh EMI
(Net Profit X 65%-70% FOIR) – Obligations) ÷ Per Lakh EMI
B. LTV – Market Value of the property X (40%-65%).
The home mortgage loan eligibility criteria differ from the home loan eligibility criteria. The two mainly differ in the loan amount that can be offered against the collateral of the property. In home loan you get higher funding from the lenders in comparison to mortgage loans i.e.up-to 90% on the market value of the property. Click to know more differences between mortgage loans & home loans.
How To Increase The Mortgage Loan Eligibility
- Add an earning co-applicant to the loan application. Click to know who can be your co-applicants.
- Disclose your earnings from other legal sources of income. Ensure that the income received is appropriately documented.
- Foreclose your unsecured loans, such as personal loans or business loans which eat the majority of your loan eligibility.
- Close your credit card outstanding/ overdue balance.
- Pledge additional property to enhance your funding against the property. Click to find which properties can be mortgaged.
Remember to check bank loan eligibility before you apply for a mortgage loan. Check out the loan against property eligibility criteria of top banks.
|Bank||Age Criteria||LTV||Maximum Tenure For Loan Against Property||Loan Amount|
|ICICI loan eligibility||25 years – 65 years.||Up-to 70%||Up-to 20 years.||Up-to 10 Crores.|
|Loan against property eligibility HDFC||24 years – 70 years.||Up-to 65%||Up-to 15 years.||Up-to 25 Crores.|
|Axis Bank loan against property eligibility criteria||24 years – 65 years.||Up-to 55%||Up-to 20 years.||Up-to 5 Crores.|
|Loan against property eligibility SBI||24 years – 70 years.||Up-to 65%||Up-to 15 years.||Up-to 5 Crores.|
|Kotak Bank loan against property eligibility||18 years – 65 years.||Up-to 65%||Up-to 15 years.||Up-to 5 Crores.|
|Canara Bank loan against property eligibility||24 years – 70 years.||Up-to 50%||Up-to 10 years.||Up-to 10 Crores.|
|Bank Of India loan against property eligibility||21 years – 70 years.||Up-to 40%||Up-to 15 years.||Up-to 7.5 Crores.|
|Bank Of Baroda loan against property eligibility||21 years – 65 years.||Up-to 40%||Up-to 10 years.||Up-to 10 Crores.|
Mr. Damodar, a 28-year-old physiotherapist is drawing a salary of Rs.1.2 Lakhs p.m. He is willing to mortgage his 1 bhk apartment in Thane, Mumbai with a market value of Rs.80 Lakhs. He has no other outstanding loans. He is looking for a mortgage loan of Rs.60 Lakhs- Rs.50 Lakhs. Let’s calculate his 60 Lakhs-50 Lakhs loan eligibility from the top banks.
The mortgage tenures, LTV ratio, and interest rates will vary among the banks, and so will their EMIs depending on the tenures and the rates of interest. Mr. Damodar should choose a Bank which offers the highest eligibility, lower interest rates, and the EMIs.
|Bank||Tenure||Interest Rate||Maximum Loan Eligibility On Property Valuing Rs.80 Lakhs||EMI|
|ICICI Bank||20 years||7.70% p.a.||Rs.56 Lakhs||Rs.45,801/-|
|HDFC Bank||15 years||8% p.a.||Rs.52 Lakhs||Rs.49,694/-|
|Axis Bank||20 years||10.50% p.a.||Rs.44 Lakhs||Rs.43,929/-|
|Kotak Bank||15 years||9.25% p.a.||Rs.52 Lakhs||Rs.53,518/-|
|Canara Bank||10 years||9.95% p.a.||Rs.40 Lakhs||Rs.52,750/-|
-> ICICI Bank offers the highest eligibility to Mr. Damodar of Rs.56 Lakhs.
-> The minimum loan eligibility of Rs.40 Lakhs is with Canara Bank, which does not fulfill Damodar’s mortgage requirement.
-> The loan eligibility differs between the banks based on their LTV funding ratios.
-> EMI amount will vary between the banks from Rs.43,929/- – Rs.53,518/- depending on the interest rates and the loan tenures.
Also Read: Income Tax Benefits On Mortgage Loan.
Mortgage Loan Documentation
Click to get a detailed list of documents till disbursement for:
Q. How do I check my loan eligibility?
Q. Is there any mortgage loan for CIBIL defaulters?
Ans: It is mandatory to have good CIBIL scores above 750 to avail a mortgage loan. Mortgage loan without CIBIL scores cannot be granted to any individual.
Q. What is the interest rate on loan against property?
Ans: The mortgage loan interest rates range from 7.70% p.a. – 13.20% p.a.
Q. When to apply for mortgage pre approval? What is my loan eligibility?
Ans: You can anytime apply for a mortgage pre-approval loan. The preapproval will give you exact LAP eligibility. It helps to plan your budget accordingly. It also saves your time as a major part of the loan sanction process has already been done.
Also, read on pre-approved home loans.
Q. How much is the HDFC mortgage loan eligibility for property valuing 1 Crore?
Ans: Property value1 crore loan eligibility for a mortgage loan in HDFC Bank will be Rs.65 Lakhs. To know the exact loan eligibility, refer to HDFC Bank loan against property.
Q. I draw a salary of Rs. 63,000/- per month. What will be my eligibility for a loan on salary basis?
Ans: Rs.63,000/- salary loan eligibility will be calculated as under:
(63,000 X 60% – Obligations) ÷ Per lakh EMI of the lender
Q. I run a retail clothing shop in Mumbai. My ITR profit is Rs.7 Lakhs? What will be my loan eligibility?
Ans: Rs.7 Lakhs ITR loan eligibility for a mortgage loan in Mumbai will be calculated as under:
(7,00,000 X 70% – Obligations) ÷ Per Lakh EMI of the lender.
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