Home loan basics: eligibility and EMI, explained

In short: Your loan amount depends on your income, your existing obligations, and your credit history. Your EMI then depends on that amount, the interest rate, and the tenure. Knowing these levers helps you plan before you fall in love with a home.

How lenders assess eligibility

• Income: your stable, documented earnings.
• Existing obligations: other loans and commitments you already pay.
• Credit history: how you have handled credit in the past.

Lenders generally want your total monthly repayments to stay within a comfortable share of your income, which is why reducing other debts before you apply can increase what you are eligible for.

What an EMI is

An EMI, or equated monthly instalment, is the fixed amount you repay each month. It is made up of interest and principal, and three things drive its size: the loan amount, the interest rate, and the tenure.

The tenure and rate trade off

A longer tenure lowers the monthly EMI but increases the total interest you pay over the life of the loan. A shorter tenure does the opposite. There is no single right answer, only the balance that fits your monthly comfort and your long term cost.