How Much Home Loan Can I Avail on Rs. 40,000 Salary?

How Much Home Loan Can I Avail on Rs. 40,000 Salary?

In Indian culture, purchasing a home is vital to obtain the status of ”being settled”. Nevertheless, this goal can only be achieved later in life when you’ve saved enough money. That is where taking out a House Loan could come in handy and allow you to own your dream home at a young age. Do you have a minimum salary of Rs. 40,000? And wondering, “how much home loan can i get on 40000 salary” then learn how much Home Loan you can borrow.

How Lenders Determine Your Eligibility?

Banks and NBFCs use two key factors to determine a borrower’s eligibility:

1. Borrower’s Credit Score to Know their Repayment Reliability 

Credit scores measure the borrower’s financial history and current financial obligations. Banks and NBFCs prefer higher credit scores to ensure timely repayments.

2. Borrower’s ability to repay

Sometimes, salary is expressed as net or in-hand pay. This distinction is essential because financial institutions often consider an individual’s income when determining a Home Loan. Although salary structures can vary based on your lender, they often broke it into the following components:

  • Basic Salary
  • Medical Assistance
  • Leave Travel Assistance
  • House Rent Allowance

The components listed above are used to make up the gross portion of the remuneration. The net total includes necessary deductions, such as the EPF, Professional Tax, TDS, and other taxes. The net compensation of an employee, also known as their in-hand income, is then calculated. This net income determines whether you can receive a mortgage.

Also Read: How Credit Scores Can Impact Home Loan Interest Rate?

What is the Maximum Home Loan I Can Avail on Rs. 40,000 Salary?

You can use an easy Home Loan eligibility calculator to determine how much loan you are eligible for. A Home Loan eligibility calculator is an objective way to determine your eligibility. To use this tool, enter your monthly income, age and other information. When you insert the details in the calculator, it will show the Home Loan amount you are eligible for. You can adjust the parameters to suit your financial situation and can obtain a more precise estimate of your Home Loan amount.

Note: A family with more than one income earner can have their monthly salaries added together to qualify for a larger Home Loan amount.

Other Factors that Affect Home Loan Eligibility

Several other factors can affect your eligibility for a Home Loan other than your net monthly income. Check the list of factors that affect your Home Loan eligibility –

  • Age: Home Loans are available to anyone between 18 and 60. Financial institutions prefer to lend money to younger applicants. Because younger candidates are more likely to repay House Loans due to their long careers.
  • Occupation: Working for a well-respected company might make you eligible for a Home Loan for a higher amount. As it ensures timely salary credit, which leads to timely repayments. 
  • Credit score: The evaluation of your eligibility will be based on your past loan repayment history. Even with an excellent credit rating, getting a loan for your house might be challenging. Financial institutions require a credit score of more than 650. A credit score of at least 750 might allow you to negotiate lower Home Loan Interest Rates.
  • Existing loans: When determining eligibility for a Home Loan, financial institutions consider your ongoing EMIs. It ensures whether the borrower has sufficient income to pay the existing debt as well as their new EMIs.
  • Property value: It is crucial to consider the health of the underlying asset when assessing House Loans. Financial institutions use two key factors to evaluate a potential buyer’s property. These are typically done by lawyers and independent valuers authorised by the financial institution. You can borrow up to 90% of the property’s value as a Home Loan.

The length of your chosen tenure also determines your eligibility. Your EMIs will decrease if you choose a longer period. This will increase your loan eligibility as well.


After knowing all about the Home Loan eligibility factors, check Home Loan required documents. Now approach a lender of your choice and apply for a Home Loan. Remember to compare Home Loan interest rates before applying to get the best deal possible.