POSTED BY February 3, 2014 10:16 am COMMENTS (4)ON
Currently I have a 3 year car insurance of EMI 30k. Have already paid 17 months EMI. Still to pay 19 more months.
I will be applying for a home loan for 1 crore in next few weeks.
Will continuing car loan affect the how much loan I can go for? If yes, should I close my car loan by paying cash of 6.x lakhs, so that I can go for higher home loan?
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4 replies on this article “Should I close my car insurance before I go for a home loan?”
Yes, the existing car loan EMI could bring down your home loan eligibility. This is because a part of your income is going towards the repayment of the car loan and the balance is available for your monthly expenses, investments and savings.
The best option would be to approach the bank and check your home loan eligibility. If the existing car loan EMI has an impact on your eligibility then, repaying it completely would be a good idea.
Dear Chennaiinvestor, @ 1.4L Rs. salary, the maximum EMI (no matter it’s Car or home or combination of all loans) you can afford is 55% of 1.4L Rs. = 77000 Rs. So you ‘ll not get 1 Crore Rs. home loan even after foreclosing car loan. Please check with your home loan lender what ‘ll be the maximum permissible EMI %age of your salary and do accordingly.
Total on hand salary for me is 1.4 lakhs per month.
Dear Chennaiinvestor, what’s your mly gross income and net income?