Home Loan Eligibility Calculator: Know How Much You Can Borrow

Buying a home is exciting, but one of the first questions you need to answer is: How much can I actually borrow? That’s where a Home Loan Eligibility Calculator comes in. This simple tool helps you estimate the maximum loan amount you qualify for based on your income, expenses, age, and credit profile.

What Is Home Loan Eligibility?

Home loan eligibility refers to the maximum amount a bank or lender is willing to lend you for purchasing a house. It’s not just about your income—it also considers:

• Existing debts and monthly EMIs
• Age and repayment tenure
• Credit score or creditworthiness
• Lender-specific rules like FOIR (Fixed Obligation to Income Ratio)

Knowing your eligibility helps you plan realistically and avoid disappointment during the application process.

How Is Home Loan Eligibility Calculated?

Banks and financial institutions usually calculate eligibility using your monthly income and expenses. Here’s a simple formula:

Eligible EMI = (Gross Monthly Income × Allowed %) - Existing EMIs

• Allowed %: The portion of your income the bank allows for repayment (often 40–50%).
• Existing EMIs: Any other loans you’re paying.

Example:

• Monthly Income: 50,000 BDT
• Existing EMIs: 10,000 BDT
• Allowed FOIR: 50%

Calculation:

Eligible EMI = (50,000 × 0.5) - 10,000 = 15,000 BDT

Based on your tenure and interest rate, this EMI translates into a home loan of approximately 1.5 million BDT.

Note: Exact numbers depend on interest rates, tenure, and bank policies.

You can get a realistic estimate for building in your area

How to Use a Home Loan Eligibility Calculator

Using an eligibility calculator is simple:

• Add details of existing loans or EMIs.
• Input your age and desired loan tenure.
• Include your credit score if requested.
• Click “Calculate” to see your maximum eligible loan amount.

Some calculators also provide interactive charts to show how changing income, tenure, or down payment affects your eligibility.

Tips to Improve Your Home Loan Eligibility

If your eligible amount is lower than expected, you can increase it with a few steps:

• Reduce existing debts: Pay off smaller loans first.
• Increase your tenure: Longer repayment periods reduce EMI.
• Add a co-applicant: Combine incomes with spouse or family member.
• Boost credit score: Timely payments and low credit utilization help.
• Increase down payment: Less borrowing improves approval chances.

Regional Considerations (Bangladesh)

In Bangladesh, banks often consider FOIR, age limits, and salary structure while calculating eligibility. For example:

Factor	Typical Bank Norms
FOIR	40–50% of monthly income
Max Tenure	20–25 years (varies by age)
Co-applicant	Optional but recommended for higher eligibility
Credit Score	High score improves chances

Different banks may have unique policies, so always check individual guidelines before applying.

FAQs

1. What is home loan eligibility?
It is the maximum loan amount a lender is willing to provide based on your financial profile.

2. How is eligibility different from affordability?
Eligibility is what banks approve; affordability is what you can comfortably repay.

3. How can I increase my eligibility?
Reduce debts, increase tenure, add co-applicant, or improve your credit score.

4. Does age affect eligibility?
Yes, lenders consider your age relative to maximum loan tenure.

5. Can self-employed individuals use this calculator?
Yes, but they need to input net business income instead of salary.