Home Loan Eligibility in India – Complete Guide for Salaried & Self-Employed

Buying a home is one of the biggest financial decisions you’ll ever make, but most home loan rejections happen before the application is even properly evaluated. The main reason? Borrowers don’t clearly understand home loan eligibility criteria set by banks and NBFCs.

Home loan eligibility decides how much loan you can get, whether your application will be approved, and at what interest rate. It is influenced by factors like income, age, credit score, existing EMIs, and employment type.

In this guide, we explain home loan eligibility in India in simple terms for both salaried and self-employed applicants, along with common rejection reasons and practical tips to improve your chances of approval.

Home Loan Eligibility – Quick Overview

Home loan eligibility refers to the conditions used by lenders to assess whether you qualify for a housing loan and how much amount you can borrow.

Most lenders evaluate eligibility based on

• Monthly income and stability

• Age and loan tenure

• Credit (CIBIL) score

• Employment or business profile

• Existing loans and EMIs

Understanding these factors before applying helps you avoid rejection and choose the right loan amount confidently.

Key Factors That Affect Home Loan Eligibility

Your income is the most important factor in determining eligibility. Higher income improves your repayment capacity and allows you to qualify for a higher loan amount.

Banks usually calculate eligibility using:

• Net monthly income

• Fixed vs variable income

• Income consistency over time

Salaried individuals with stable income generally get faster approvals compared to fluctuating income profiles.

1. Income Level

2. Age of the Applicant

Age directly affects the loan tenure available to you.

• Minimum age: Usually 21 years

• Maximum age at loan maturity: 60–65 years

Younger applicants can opt for longer tenures, which lowers EMI and increases eligibility.

3. Credit Score (CIBIL Score)

Your credit score reflects your repayment discipline.

• 750+: Excellent (best interest rates)

• 700–749: Good

• 650–699: Acceptable

• Below 650: High risk of rejection

A low credit score doesn’t always mean rejection, but it reduces your loan amount and increases interest rates.

4. Existing Loans & EMIs

Banks check your Fixed Obligation to Income Ratio (FOIR).

If a large portion of your income already goes into:

• Personal loans

• Car loans

• Credit card EMIs

Your home loan eligibility reduces.

Ideally, total EMIs should not exceed 40–50% of monthly income.

5. Employment Type

Eligibility rules differ based on whether you are salaried or self-employed.

Lenders assess:

• Job stability for salaried applicants

• Business continuity and profitability for self-employed individuals

Home Loan Eligibility for Salaried vs Self-Employed

Home Loan Eligibility for Salaried Individuals

Salaried applicants usually find it easier to qualify because income is predictable.

Key requirements:

• Minimum 2–3 years of total work experience

• At least 6–12 months with current employer

• Stable salary credits in bank account

Government employees and employees of reputed private companies often receive preferential terms.

Home Loan Eligibility for Self-Employed Individuals

Self-employed applicants are assessed more conservatively.

Banks evaluate:

• Business vintage (minimum 2–3 years)

• IT returns and profit trends

• Business stability and industry risk

Even with higher income, inconsistent profits can reduce eligibility.

Common Reasons Why Home Loan Applications Get Rejected

Many applicants qualify on paper but still face rejection due to avoidable mistakes.

Frequent Rejection Reasons:

• Low or irregular credit score

• High existing EMIs

• Unstable job or business history

Understanding these issues early can save weeks of delays and multiple credit enquiries.

• Incomplete or incorrect documents

• Applying for loan amount beyond eligibility

How to Improve Your Home Loan Eligibility

Improving eligibility is possible with some planning.

Practical Steps:

• Improve credit score by clearing overdue payments

• Reduce existing EMIs before applying

• Add a co-applicant with stable income

Small adjustments can significantly increase approval chances.

• Choose longer loan tenure to reduce EMI burden

• Maintain clean bank statements

Frequently asked questions

What is the minimum salary required for a home loan in India?

There is no fixed salary limit. Most banks require a stable monthly income sufficient to support EMI after existing obligations.

Can I get a home loan with a low CIBIL score?

Yes, but options may be limited. Improving your credit score before applying is strongly recommended.

Does job change affect home loan eligibility?

Frequent job changes may reduce eligibility. Stability with the current employer improves approval chances.

Can self-employed individuals get 80–90% home loan?

Yes, but approval depends on business income consistency and financial records.

Is eligibility same across all banks?

No. Each bank has its own risk policy, FOIR limits, and income assessment method.

Final Thoughts

Home loan eligibility is not just a formality—it determines whether your dream home becomes a reality or faces repeated rejection. By understanding eligibility criteria, checking your financial readiness, and planning your application carefully, you can significantly improve approval chances.

If you’re unsure about your eligibility or want expert guidance before applying, Mudrakshay helps you evaluate your profile clearly and connect with suitable lenders—without confusion or unnecessary rejections.