Minimum Salary For Home Loan
Minimum Salary For Home Loan
Buying a home is every individual’s dream. With property prices on the rise in India, it becomes even more important for everyone to own a house.
For most salaried individuals, a home loan is the only way to afford this valuable asset. Lenders in India often offer a variety of home loan options to meet the different needs of individuals, but the most important thing they consider is your monthly income.
In this blog, we will understand the basics of the minimum salary requirement for home loan eligibility and what you can do if you're falling short.
Why Does Monthly Income Matter For Home Loans?
Usually, lenders look at various factors when they decide whether to approve a home loan. And one of the key factors they consider among others, is your monthly income. They want to make sure that you can comfortably repay the loan along with all your other expenses. Ideally, the higher your income, the better your chances of getting your home loan approved, because it clearly suggests you have a good capacity to repay the loan.
What Do Lenders Look For In Analysing The Monthly Income of Salaried Home Loan Applicants?
The salary of employees is usually stated as their gross salary. The total gross salary is the sum of the following: basic salary, leave travel allowance (LTA), medical allowance, vehicle allowance, house rent allowance (HRA), and other allowances based on the policies of the employer.
All these together makeup what's called the cost to the company (CTC). This, however, does not represent the employee's take-home salary. The employee takes a net salary at home, which is calculated after deducting the amount towards EPF contribution, TDS, and other deductions as per the company policies.
So, while approving a home loan, the lenders look at the take-home or net salary rather than the gross salary or CTC.
What's the Minimum Take-Home Salary Required for Home Loans?
The minimum take-home salary required for a home loan varies from lender to lender. Generally, though, most lenders look for a monthly income between Rs. 25,000 and Rs. 40,000. It's also a good rule of thumb that your Equated Monthly Installment (EMI)should not exceed 50% of your monthly income. This makes it more probable that you will be able to pay back the loan on time and fulfil your other financial obligations as well.
Other Factors That Affect Home Loan Eligibility
There are a few other important factors apart from your salary income, that lenders also consider:
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Employment History: Sometimes continuous switching is also not good. And if you have a stable job history, it can increase your chances of easily getting a home loan.
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Employer Reputation: Working for a well-known company can sometimes work in your favour. And it can help you get your home loan approved faster.
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Existing Loans: If you already have other loans, this could affect your ability to take on a new one. Lenders do check how many existing loans you have.
How Can One Check Eligibility For A Home Loan?
Most banks and financial institutions have their own online calculators available on their websites that let you check your eligibility for a home loan. These calculators can give you a good idea of the eligibility amount and EMIs based on your income and other factors.
Tips to Improve Your Home Loan Eligibility
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Maintain a Good Credit Score: Your credit score is one of the key factors in assessing your eligibility for a home loan. Therefore, it is always advisable to pay your bills on time, don't default on loans, and keep your credit card balances as low as possible. This will help you maintain good credit score.
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Increase Your Income: When determining your loan eligibility, every financial institution takes your income into account. And you become a more viable borrower when your income is higher, as that increases your repayment capacity. To increase your income, you can consider getting a higher-paying job, freelancing, or starting a side business.
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Reduce Existing Debt: When determining an applicant's eligibility for a home loan, banking institutions consider the debt-to-income ratio. As a result, it makes sense for a candidate to pay off any debt because doing so will make them more eligible for a home loan.
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Add a Co-Applicant: By adding a family member who earns an income and has a strong credit score as a co-applicant, you can improve your eligibility for a home loan. By doing this, you'll also be able to borrow more money because your EMI will become more affordable.
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Select a longer loan tenure: Your eligibility for a home loan may be increased by selecting a longer repayment period because you will have a lower EMI, which means that you are more likely to make timely payments. Your eligibility for the home loan is improved in the process, and to the lender, it will appear as a lesser-risk loan to you.
Frequently Asked Questions (FAQs)
What Is The Minimum Salary Required For A Home Loan?
The minimum salary required varies by lender but is generally between Rs. 25,000 and Rs. 40,000 per month. The actual amount depends on several factors, including the loan amount and your other financial obligations.
Is It Possible To Get A Home Loan With A Co-Applicant?
Yes, applying with a co-applicant, such as a spouse or family member, can improve your chances of getting a home loan. The combined income of both applicants can make you eligible for a higher loan amount. Additionally, if the co-applicant has a good credit score, it can positively influence the lender's decision.
How Does Choosing A Longer Loan Tenure Affect Eligibility?
Opting for a longer loan tenure can lower your monthly EMI payments, making the loan more manageable. However, it also means you'll pay more in interest over the life of the loan. It's a balancing act—choose a tenure that works for you financially.
Well, buying a home is a big decision, and understanding your loan eligibility can make the process smoother for you. Keep these tips in mind, and you'll be one step closer to finding the perfect home loan for your needs.
- Aadhar Housing Finance has been awarded and recognised as ‘The Best Brand 2021’ at the 4th Edition of ‘The Economic Times – Best Brands 2021’ held at Sahara Star in Mumbai on 21st December, 2021.
- Aadhar Housing Finance was conferred with the 'CSR Times Award 2021' for the successful initiatives implemented under its CSR project, ‘Aayushmaan Aadhar’ at the 8th National CSR E-Summit, on 17th December, 2021.
- Aadhar Housing Finance was conferred with 'India CSR Leadership Award 2021' on 10th Dec, 2021 in 'Community Health' category for its impactful community-centric initiatives conducted under Aayushman Aadhar project.
- Aadhar Housing Finance has received ‘Maharashtra State Best Employer Brand Award, 2021’ at the 16th Employer Branding Awards hosted on 23rd Nov, 2021 by World HRD Congress for our exemplary work in HR. Aadhar has translated and combined vision with action leading to better people strategies and cultivation of competencies in order to enable the organization to be future ready.
- Aadhar Housing Finance Ltd bagged 5 awards across below categories at ‘Banking Frontiers NBFC Awards & Conference 2021’ (DNA Awards 2021) virtual summit held on 20th Aug, 2021. 1) Best Cyber Security Initiative - 1st Prize 2) Best API Initiative - 1st Prize 3) Best Omnichannel CX Initiative - 2nd Prize 4) Best Cloud Initiative - 2nd Prize 5) Esteemed Trophy (IT & Digital Group)
- Awards & Recognition: We received two prestigious awards at the 7th Edition of ‘National Awards For Excellence in BFSI 2021’ which was held virtually on 26th Aug 2021, in mentioned categories: 1) Aadhar Housing Finance Ltd received the ‘Affordable Housing Finance Company of the Year’ award, 2) Shri Deo Shankar Tripathi, MD & CEO, Aadhar Housing Finance Ltd has was conferred with ‘CEO of the Year’ award.
- Awards & Recognition: For the Second consecutive year, Aadhar Housing Finance has been certified as a ‘Great Place To Work’ by Great Place To Work Institute, a Global authority on recognizing high-trust and performance driven culture at workplaces.
- Awards & Recognition: Aadhar Housing Finance is certified as a ‘Great Place To Work’ by Great Place To Work Institute (India). This is a significant milestone for Team Aadhar as ‘The Great Place to Work Model’ is the world’s most researched, accepted and sustainable definition of a great workplace from an employee’s point of view. It is a comprehensive framework encompassing the overall employee experience ecosystem.
- Awards & Recognition: Aadhar Housing Finance won for the 3rd year in a row at The Outlook Money Awards. Team Aadhar received the Silver award in the Affordable Housing category at the Outlook Money Conclave held in Mumbai on 27th Feb, 2020.
- Awards & Recognition: Shri Deo Shankar Tripathi, MD & CEO, Aadhar Housing Finance received the ‘Top Most Influential BFSI Leaders’ award at the World BFSI Congress & Awards, in Mumbai on 14th Feb 2020.
- Awards & Recognition: Shri Deo Shankar Tripathi, MD & CEO, Aadhar Housing Finance received ‘the NBFC Leadership Award 2020’ at the 8th NBFC 100 Tech Summit held in Mumbai by Banking & Finance Post and Elets on 23rd January 2020.
- Awards & Recognition: The Aadhar Annual Report 2018-19 wins all India 3rd Prize in the PRSI National Awards 2019 at the 41st All India Public Relations Conference – Hyderabad
- Awards & Recognition: Aadhar Housing Finance is one of the ‘Best BFSI Brands 2019’: Aadhar Housing Finance received ‘The Economic Times Best BFSI Brands 2019’ award at the India-UAE Strategic Conclave 2019 held in Dubai on 15th October, 2019
- Awards & Recognition: Aadhar Housing Finance received ‘The affordable Home Loan Provider Of The Year 2018’ award from Union Minister Shri Nitin Gadkari at Outlook Money Conclave in Mumbai on 12th March, 2019 for the exemplary work in supporting the ‘Housing for All’ mission in India.
- Aadhar Housing Finance received the Prestigious ‘PMAY Empowering India Award 2019’ from Union Minister Shri Hardeep Singh Puri in Delhi on 5th March, 2019 for its exemplary work in supporting the ‘Housing for All’ mission in India.
- Dun & Bradstreet included Aadhar Housing Finance in 'India's Leading BFSI Companies 2019' list. The report was published by Dun & Bradstreet Information Services in March, 2019.
- Aadhar is declared one of the 1) ‘DREAM COMPANIES TO WORK FOR’ (Financial Services) and 2) ‘DREAM EMPLOYER OF THE YEAR’ presented by ET Now on 16th Feb, 2019 at the World HRD Congress in Mumbai.
- Shri Deo Shankar Tripathi, MD & CEO, Aadhar Housing Finance was recognized and felicitated as one of ‘100 Top Most Influential BFSI Leaders’ at the ‘World BFSI Congress’ held in Mumbai on 14th Feb, 2019.
- Aadhar Housing Finance bagged the ‘Most Promising Brand For Housing Finance’ award at the ‘World BFSI Congress’ presented by ET Now in Mumbai on 14th Feb, 2019.
- Aadhar Housing Finance won ‘Prestigious Brands of India 2019’ award at the conference held at Sahara Hotel in Mumbai on 12th Feb, 2019. The list of prestigious brands was judged and presented by BARC (Brand Advertising Research and Consulting), a global brand consultancy firm and ERTC Media, one of India’s leading independent media consulting & brand listing organisations. The recognition solidifies Aadhar as a leader within housing finance segment across various parameters such as brand recall, impact, trust, positioning, growth, reach, and innovation.
- Aadhar Housing Finance won the prestigious Finnoviti 2019 award at ‘Finnoviti Awards & Conference’ presented by Banking Frontiers and their Knowledge Partner Deloitte in Mumbai on 25th January, 2019 for innovative distribution and referral model named ‘Aadhar Mitra’.
- Aadhar Housing Finance bagged 2 prestigious awards at the ‘Banking, Financial Services & Insurance Awards’ presented by ABP News in Mumbai on 28th November, 2018:
- Housing Finance Company of the Year (Medium and Small) – for our exemplary work in the affordable housing finance segment.
- Marketing Campaign of the Year – for our recent brand campaign #GharBanegaTohDeshBanega.
- Aadhar MD & CEO awarded the ‘BFSI Leadership Award’ in Nov 2018 by ‘The Banking and Finance’ magazine and ‘elets’.
- Aadhar MD & CEO awarded the ‘Certificate of Excellence’ under “30 most innovative Business Leaders to watch in 2018” in July 2018 by ‘The CEO Magazine’.
- Aadhar receives the Award as the “Best Affordable Home Loan Provider of the Year 2017” at the ‘Outlook Money Awards’ March 2018.
- Aadhar CEO receives the ‘Inclusive Business Leaders Award’ from International Finance Corporation (IFC) for Aadhar’s exemplary work in Inclusive Business at the 2012 Inclusive Business Leaders Forum in Tokyo, Japan.
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