Home Loan

Everyone wants to build the palace of their dreams. But not everyone has enough money to fulfill these dreams. In such a situation, home loan helps them. Currently, the home loan rate in the country is at a decade low. Buying a house is a profitable deal at this time. Along with cheap home loans, developers are also offering various concessions to increase their sales. In such a situation, you have a good chance to build your dream home.

 

What Is Home Loan?

Home loan is a secured loan which is obtained by giving a property as collateral to buy it. Home loans offer high value of funding at affordable interest rates and for a longer tenure. If you are taking a home loan, its interest rate is a major factor that affects the total cost of your home. Since the home loan amount is high and the tenure of the home loan is also long, home loan interest can have long-term financial implications. Getting a lower interest rate for a home loan will not only result in lower EMIs but also lower interest payments. If we talk about the  interest rate, then the lowest interest rate till date is 7.50%* p. a. Hence, home loan borrowers should try to get a home loan at the lowest possible interest rate. The loan is repaid through EMI. After the repayment, the title to the property is transferred back to the borrower.

Types of Home Loan

Various home loan options are offered by national or private banks and non-banking financial companies in India. You have to understand each of the available options for knowing which loan option is best for you based on your requirement:


Land-purchase loan: This loan is provided by the banks or financial companies (NBFCs) to buy a plot or land on which the applicant of loan wants to build a house. Banks usually lend up to 80-85% of the cost of the plot or land.


Home construction loan: Banks & the NBFCs provide this loan to that applicant who really wish to build a house on their own or on a co-owned plot. This loan & the approval process of this loan is totally different in few aspects as compared to the usual available housing loans. This also includes:


Plot or land should be purchased within one year. The borrower should have a rough estimate of the cost to be incurred for the house construction.

*If the total value of the plot will not be included in the loan amount, then only the house construction estimate is taken into account.


Home improvement loan: Home-improvement loans are only given to the applicants who have a home already but the lack of insufficient funds to renovate it. Which includes – repair of their current house, painting of walls, digging of borewell, water-proofing, electrical wiring, modular kitchen etc.


Home purchase loan: The home-buying loan amount is usually used to purchase a residential property. Banks & the Financial institutions usually provide 80-85% of the market value of the house as amount of the loan. The interest rate on these loans is either fixed or floating.


Home conversion loan: Loan borrowers of existing home who really want to move into another property, they can avail home conversion loan only to buy a new home for them.

Features Of Home Loan
Features/Benefits Description
High Loan financing You may get a Home Loan of up-to 90% of your properties market value
Tax benefits You get 3 Tax benefits with Home Loan under 3 different sections: 80C, 24 and 80EEA
Affordable Interest rates Currently the lowest rate of interest on Home Loan is @7.5% p.a. which makes your EMI very affordable 
Option of Balance Transfer  If you're not satisfied with your current lender and and feel the interest rates and or terms & conditions are not comfortable then you get an option to transfer your home loan to any other lender
Option of Home Loan Top-Up If you need some additional amount for buying furniture and kind of stuff for your house you can take a Home Loan top-up
PMAY

Under the PMAY scheme, a concessional interest rate of 6.50% per annum is provided on housing loans to all the beneficiaries for a period of 20 years.

- Disabled persons and senior citizens will be given first preference in allotment of ground floor.

- New technologies have been used for the construction of houses, and special care has been taken for the environment.

- The Credit Linked Subsidy on PMAY has been implemented primarily at the statutory level in every state of India.
Long Tenure You may opt for a loan tenure of up-to 30 Years for Home Loan as per your convenience 
Prepayment and Foreclosure options With Home Loan you get an option of paying more than your EMI or close your Home Loan before the term ends.
Process For Applying A Home Loan

Dear Clients if you wish to applying for a home loan, You can apply it from any bank. Some of the NBFCs also offers a home loan. You can apply home loan in two ways which are online or offline.

To apply offline, you can visit any of your nearest bank branch and talk to the agent or manager of the bank for the loan application. Applying offline for loan is the oldest way to get a loan approval & it took lot's of time but if you want to apply for home loan online then you can apply your loan by following these simple steps given below:-

  • First you go to bank's official website which is available on internet: or you can apply from the financial companies too:-
  • After reaching this site home page of bank/firm will open.
  • Click on online loan application.
  • Now site will show you loan application options.
  • Click on home loan application according to your requirement.
  • After this there will be appear a form, you have to fill that form with some of your basic information.
  • After filling all details you have to submit your application form.
  • You will be asked to scan some of your necessary documents after completing scanning process your loan application will be done.
  • After scanning you need to submit your application by clicking on "submit"

This was the simple & easy way to submit your loan application to the bank/NBFCs then you have to wait for the response from them. There agent will coordinate to you and he/she can make your loan process easier & beneficial

Eligibility Criteria For Home Loan

Home loan eligibility mainly depends on the income and repayment capacity of the individual.

Every bank and financial institution runs on its own terms and conditions. The eligibility or eligibility of a home loan for any individual depends on whether you are able to fulfill the terms and conditions laid down by the lending institution or not. By knowing your home loan eligibility, you get to know whether you will be able to get the loan amount as per the terms and conditions prescribed by the lending institution.

 

Minimum & maximum Age 18 - 70 years
Minimum Income ₹ 25,000
Credit Score Above 750
Employment Status Salaried or Non-Salaried
Work Experience 2 Years
Loan Amount Decided by lender
Residence Type Permanent resident or Non-resident Indian (NRI)
LTV Ratio 75 to 85%
Property Type

Completed /Under Construction Project, Land/Plot, Build on own Land, Buy Land and Build Home

 

The loan eligibility criteria vary depending on the bank/lender. Loan sanctions are based on borrowers' monthly income, credit profile and present relationship with the bank.

EMI Calculator & Schedule

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Loan EMI

24,959

Total Interest Payable

34,90,279

Total Payment
(Principal + Interest)

59,90,279

Loan Eligibility Calculator
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Comparison Chart
LenderInterest RateProcessing FeeEMI / LakhLoan Tenure
8.25 %Up to .25 % (Min Rs 3540 Max Rs 1,25,000)Rs 77630 Years Max
8.25 %Min Rs 10000Rs 85220 Years Max
8.25 %Min Rs 10030Rs 76530 Years Max
8.25 %Upto 0.50 (Max Rs 15000)Rs 76230 Years Max
8.30 %NILRs 76130 Years Max
8.30 %Upto 0.70 (Min Rs 5000 Max 25000)Rs 75530 Years Max
8.30 %upto 0.25Rs 75530 Years Max
8.30 %Up to .50 % (Min Rs 5000 Max Rs 25000)Rs 86220 Years Max
8.30 %Upto 0.35 (Min Rs 2500 Max 15000)Rs 76930 Years Max
8.35 %Min Rs 10000Rs 74130 Years Max
8.35 %Min Rs 10000Rs 76230 Years Max
8.35 %Up to 1% (Min Rs 5000 Max Rs 10000)Rs 72730 Years Max
8.40 %Min Rs 2500Rs 76930 Years Max
8.40 %Upto 0.50 (Min Rs 5000 Max 40000)Rs75530 Years Max
8.45 %Min Rs 3000Rs 74130 Years Max
8.45 %Up to .05 % (Min Rs 5000 Max Rs 25000)Rs 86220 Years Max
8.60 %Up to 1% (Min Rs 5000 Max Rs 50000)Rs 77630 Years Max
8.75 %Min Rs 5000Rs 80925 Years Max
8.85 %Upto 0.50 (Min Rs 50000)Rs 79430 Years Max
8.95 %Upto 1.50 (Max Rs 10000)Rs 80130 Years Max

Related Frequently Asked Questions

  • Go for balance transfer to reduce the interest on your existing home loan.
  • Keep your monthly EMI large to reduce the total interest payable.
  • Take advantage of prepayment to save on interest and reduce EMIs.

There are several simple ways that any potential individual can improve their home loan eligibility:

  • The borrower can add a co- applicant from his family.
  • Take advantage of a relatively structured repayment plan.
  • Provide details for your another source of income.
  • A good credit score has always been considered paramount if you want to improve your eligibility then do not keep any of your past dues and pay them all on time.

The cost meaning is the processing fee on your loan. These are one-time payments and are a part of the loan application process. The home loan processing fee is not fixed. These variations depends on many cases, such as loan type amount and credit score, and the previous loan repayment  behavior of the borrower.

  • Age category
  • CIBIL Score
  • Business
  • Minimum earning
  • LTV and property value

Procedure to change the tenure of home loan. Any time period during the loan can be voluntarily changed. You can visit the branch of the lender and make a request for the same. The concerned authority will check your loan details and latest income statements before allowing you to change the tenure.

Some lenders may increase closing costs by any amount, some lenders may increase it by as much as 10 percent, and some lenders may not increase it at all.

There is no limit on the amount of down payment that the higher the down payment you can make, the lower will be your loan liability and the lower will be your EMI.

  • Home loan processing fee
  • Home loan administration fee
  • Stamp duty and registration charge
  • GST on home loan
  • Technical/legal assessment fee for property
  • Home loan documentation charges
  • Credit score report charges
  • Fee for change of home loan tenure
  • Loan conversion fee
  • EMI late payment penalty
  • Home loan prepayment charges
  • Charges for home loan account statement
  • Home loan re-sanction charges
  • Cheque bounce charges
  • Incidental charges on home loans

  • Always keep in your mind to have sufficient amount to make down payment
  • Never apply for big amount for home loan
  • Don't take loan for a short term
  • Always compare with the various banks offers.

RELATED BLOGS (22)

News Update on Home Loan

Home Loan Top Up: Eligibility, key benefits, interest rate – All you need to know

Admin 2022-08-30 12:19:20

A disciplined borrower can use multiple financial products available in the market to make their financial journey smoother. A top-up home loan is one of the easiest ways to borrow money without too much documentation and verification. It also offers more flexibility and better features than other borrowing instruments. One of the main eligibility requirements for a top-up home loan is that you need to be an existing home loan borrower.

A top-up home loan has many benefits. Let’s check out how a top-up home loan works and its key benefits.

RBI Monetary Policy Live Updates: Shaktikanta Das hikes repo rate by 50 bps

Admin 2022-09-30 11:31:51

The Reserve Bank of India (RBI)’s Monetary Policy Committee (MPC) announced a 50 basis points (bps) hike in the repo rate to 5.90 per cent on Friday in order to bring elevated  back to its target.

Is investment in luxury real estate worth the cost?

Admin 2022-11-15 12:43:04

Luxury has become the most sought after need of every buyer today. Whether it is in the form of residence, services, facilities or any other segment. Owning luxury is a state of comfort and pleasure and a matter of prestige in our society. Real estate by far is the most preferred possession when it comes to status definition; and if it is luxury real estate, the living experience enhances while also adding to the buyer’s value. India has witnessed a massive response in the sale of real estate projects over the past few years, indicating buyers’ incline towards facilities and amenities that come along with the investment in such properties.

Senior Citizen Fixed Deposit Interest Rate is Rising: Check Latest Bank FD Rate Hike Details

Admin 2022-11-26 10:54:29

Latest Bank Fixed Deposit Interest rate for Senior Citizens: Banks have been raising Fixed Deposit rates for senior citizens and other depositors in the last few months. This week, DBS Bank and Union Bank of India raised FD rates.

The Union Bank of India has increased FD rates with effect from November 25. The public sector bank is now offering up to 7.3% interest to regular depositors for FDs of 800 days and 3 years respectively. Senior Citizens can get 7.8% interest for these tenors as the bank provides 0.5% extra interest to them.

 

DBS Bank has raised the FD rate for senior citizens on deposits of 600 days by 0.75%. DBS bank is now offering 7.75% interest to senior citizens on deposits of 600 days. On FDs of 3 to 4 years, 4 to 5 years and 5 years & above, the DBS bank is offering 7% interest to senior citizens. These rates on DBS bank FDs are effective from November 18, 2022.

How can young investors make money from real estate?

Admin 2022-11-26 10:55:59

Investing in real estate at a very young age is a smart way to build wealth, but the entry barriers are often prohibitively high for anyone in their early to mid-20s. For young people, investing in real estate can seem intimidating, if not impossible. Many younger people mistakenly believe that a successful real estate investor must be “old,” especially as the housing market continues to discourage them. As a result, they decide to postpone their interest in real estate investing until later in life. Time, on the other hand, is the most powerful and wealthy asset that young people have, and with the appropriate investment strategy, you can start to make returns.

Traditional property ownership or making an investment without owning any property both are options for real estate investing. Here are the best ways for young people to get started in the real estate investment market and build long-term wealth.

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