A lender's offer depends on its assessment of your ability to repay and the value of the property it is lending against. Understanding the main inputs helps you estimate your range before you apply.
Income and repayment capacity
Lenders look at your income, existing obligations, and employment stability. A common guideline is that total loan repayments should stay within a comfortable share of monthly income, though each lender applies its own limits.
Credit score
Your credit score, often the CIBIL score in India, reflects your repayment history. A higher score generally supports a larger loan and a better rate. It is worth checking your score before you apply and correcting any errors on the record.
Loan-to-value
Lenders fund a percentage of the property value, not the whole. The remainder is your down payment. The loan-to-value ratio depends on the loan size and the lender's policy, so plan your own contribution accordingly.
Before you apply
- Check your credit score and resolve discrepancies.
- Estimate your EMI at a realistic rate, not the headline one.
- Confirm the property has clear title and approvals, since lenders verify these too.
A sanction letter sets out the approved amount and terms. Read it against your own estimate before you rely on it.