LIC Home Loan Eligibility Calculator

Buying a home is a big milestone, and smart planning makes all the difference. LIC offers Home Loans at starting at 8.25% p.a., and their online eligibility calculator helps you estimate your loan amount in minutes. Just enter your income, expenses, and liabilities to see how much you can borrow. It’s a quick, hassle-free way to plan your finances before applying. Read on to learn how the calculator works and what affects your eligibility

What Is LIC Home Loan Eligibility Calculator?

The LIC Home Loan Eligibility Calculator is a handy tool that estimates the maximum loan amount you may be qualifed for, from LIC Housing Finance (LICHFL). By evaluating key factors like your income, age, existing debts, and CIBIL score, it helps assess your repayment capacity and gives you a clear idea of your potential loan eligibility.

How To Use LIC Home Loan Eligibility Calculator?

To use the Cleartax LIC home loan eligibility calculator, follow these simple steps:

• Enter your monthly income as well as other financial obligations.
• Enter the chosen tenure for your home loan.
• Enter the interest rate being offered by LIC.
• The calculator will now  display the total loan amount you are eligible for, along with the monthly EMI payable.

How Is LIC Home Loan Eligibility Calculated?

LIC calculates home loan eligibility by considering various factors such as your monthly income, current age, credit score, any existing loan obligations, and the years remaining until your retirement. 

Let's assume that Mr Tiwari aims to obtain a home loan, with the following parameters in place:

• Monthly Salary: Rs 50,000
• Tenure: 7 years (84 months)
• Miscellaneous Expenses: Rs 10,000
• Interest Rate: 10%

Step 1: Calculate the maximum EMI you can afford

Since banks allow you to use 50% of gross monthly income for loan EMI:

EMI=[50000×(50/100)]-10000 = 15000 

So, you can afford to pay ₹15,000 per month as EMI.

Step 2: Input values in the formula

The loan eligibility formula is:

P = EMI x [(1+r)(^n) - 1]
            r x (1+r)^n

Where:

• P = Loan amount (we want to find this)
• EMI = ₹15,000 (from Step 1)
• r = Monthly interest rate = 10% per year → (10/12) x (1/100) = 0.00833
• n = Loan tenure in months = 7 years → 7 x 12 = 84 months

Adding these values to the formula, 

P = 15000 x [(1+0.00833)(^84) - 1]
        0.00833 x (1+0.00833)^84

P= ₹15,05,916.68

Therefore, the final loan amount Mr Tiwari is eligible for is ₹15,05,916.68

LIC Home Loan Eligibility Criteria

The following mentions the eligibility criteria for availing a home loan from LIC:

LIC Home Loan Eligibility Based On Salary

Listed below are some factors that determine an applicant’s home loan eligibility based on salary:

• Salaried individuals are required to draw a minimum monthly salary of RS. 25,000 to avail a home loan.
• If you are a self-employed individual, your business must continue operating and earning profits over a minimum of 2 years.
• Families falling within the income bracket of Rs. 3 Lakhs and Rs. 18 Lakhs can opt for a Home Loan under the Pradhan Mantri Awas Yojana.

LIC Home Loan Eligibility For Self-Employed

The basic Home Loan eligibility criteria for self-employed individuals include:

• Maximum Age: 75 years
• Credit Score: Minimum 600
• Income: At least Rs. 30,000 per month
• Work Experience: 2 years
• Nationality: Indian and Non-resident Indian

LIC Home Loan Eligibility Based On Age

For salaried individuals, the minimum age to apply for an LIC Home Loan is 21 years, and the maximum is 50 years at the time of application. Additionally, the loan tenure should typically not extend beyond the applicant’s retirement age, ensuring timely repayment. Younger applicants benefit from longer repayment periods and potentially higher loan amounts, as they have more earning years ahead.

LIC Home Loan Eligibility Based On Value Of Property

The loan-to-value ratio indicates the amount of loan offered to an applicant considering the value of their property. The LTV that LIC offers are as follows:

LIC Home Loan Eligibility Based on Credit Score

LIC makes it mandatory for all applicants to maintain a CIBIL score of 650 and above. A high CIBIL score indicates on-time payment of EMIs and credit card bills which thereby also gives LIC the ultimate confidence of lending out Home Loans. 

Factors Affecting LIC Home Loan Eligibility

Let us look into those factors affecting the LIC Home Loan eligibility in detail:

• Age: Younger applicants typically opt for longer repayment tenures, while senior applicants are required to repay the loan within a shorter period due to limited remaining earning years.
• Employment Status: All salaried employees must be employed in their current organisation for at least two to three years for easy loan approval.
• Income: With a stable income, an individual borrower can pay EMIs smoothly, hence why, lenders look into the financial condition of borrowers.. 
• Loan Tenor: Home loan tenures are generally flexible, but to benefit from this, you must fall within the maximum age limit at the time of loan maturity.
• Including Co-applicant: Including a co-applicant in your home loan application helps in increasing your chances of loan approval.

How to Improve Your LIC Home Loan Eligibility

You can improve your chances of getting eligible for LIC home loan by following the tips suggested below:

• Build a Strong Credit Score: Maintaining a high score reduces lenders' risk, and it can be done by timely paying existing loans and credit card bills. 
• Lower Your Existing Debt: Clearing existing and short-term debts is crucial for a smoother home loan application and better financial health.
• Ensures Steady Income Flow: Make sure to maintain a steady and consistent income through regular savings and investments to promote financial stability.
• Well Structured Repayment Plan: Choose a well-structured and organised repayment plan aligning with your financial obligations.
• Variable Salary: Maintain a consistent record of components of your variable salary to showcase a high total income.
• Add a Co-applicant: To increase your chances of Home Loan eligibility, make sure to include a co-applicant or any of your close family members.

To conclude, effective use of the LIC Home Loan eligibility calculator makes the Home Loan application process smoother and provides a clear estimate of your borrowing capacity. If you are a first-time borrower, use this calculator for effectively managing your financial commitments.