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.
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.
|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|
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.|
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
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%|
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.