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Home Loan
Lenders | interest rates | Processing Fees* (Rs.) |
|---|---|---|
ICICI Home Finance | 9.20% – 12.25% | 0.75% – 2.5% |
India Shelter Finance Corp. Ltd | 12% - 20% | 2% – 3%
|
Aditya Birla Housing Finance Ltd. | 9% - 12.50% | Up to 1%
|
Indiabulls Housing Finance | 8.65% onwards | Up to 2%
|
Federal Bank | 6.60% - 7.80% | 0.50% (Min. Rs. 10,000; Max. Rs. 45,000)
|
Union Bank of India | 6.40% - 7.65% | 0.50% subject to a maximum of Rs. 15,000
|
IDBI Bank | 6.75% - 9.90% | Up to Rs. 35 lakh: Rs. 3,500 to Rs. 7,500
|
Bank of India | 6.50% - 8.35% | 0.25% subject to Min.Rs.1,500 and Max. Rs.20,000
|
Tata Capital Housing Finance | 6.70% onwards | Up to 0.5%
|
Axis Bank | 6.75% - 11.50% | Up to 1% (Min. Rs. 10,000)
|
Punjab National Bank | 6.55% - 7.95% | Full waiver of upfront/processing fees and documentation charges from 01.01.2022 to 31.03.2022
|
ICICI Bank | 6.70% - 7.55% | 0.50% – 2.00% or Rs. 1,500 (Rs. 2,000 for Mumbai, Delhi & Bangalore), whichever is higher
|
Bajaj Finserv | 6.65% - 14% | Up to 6%
|
Bank of Baroda | 6.50% - 8.25% | 0.25% – 0.50% (Min. Rs. 8,500 & Max. Rs. 25,000)
|
HDFC | 6.70% - 8.70% | Up to 1.5% or Rs. 3,000 (Rs. 4,500 for self-employed non-professionals), whichever is higher
|
Tata Capital Housing Finance | 6.70% onwards | Up to 0.5%
|
State Bank of India | 6.70% - 7.85% | No processing fee
|
LIC Housing Finance | 6.70% – 8.05% | As applicable
|
Kotak Mahindra Bank | 6.55% onwards | Up to 1% plus statutory dues
|
HDFC Bank | 10.25% - 21.00% | Up to 2.5% |
Home Loan?
Almost all scheduled banks and a slew of Housing Finance Companies (HFCs) provide home loans to help people buy houses. Currently, the interest rate on a home loan ranges from 6.40 percent per annum to 30 percent per annum, depending on the applicant's credit score, monthly income, loan amount, LTV ratio, job profile, employer profile, and other factors. Depending on the credit profile of the loan applicant and the LTV ratios set by the lenders, the house loan amount might range from 75 percent to 90 percent of the home's worth. We let you evaluate house loan interest rates and other features given by top banks and HFCs, as well as make online applications for the best home loan alternatives, at Tushar FINCorp.
The interest rate on a mortgage can have a big impact on the entire cost of the loan. Due to the higher value and longer period of home loans, even a little change in the interest rate can have long-term financial consequences. As a result, while shopping for a house loan, you should go with the lowest rate available. Obtaining a housing loan with a lower interest rate would reduce not just your monthly EMIs, but also your overall home loan interest payment.
Home loans are available from banks and non-banking finance companies (NBFCs) for a variety of reasons. So, before applying for any form of home loan, evaluate your needs to choose an appropriate home loan programme. The following are some of the several types of home loans available:
Home Purchase Loan: This is the most frequent sort of home loan used to purchase ready-to-move-in properties, under-construction properties, and resale homes. Lenders can offer a loan-to-value (LTV) ratio of up to 75-90 percent of the property value, according to RBI guidelines.
Composite Loan: This is an excellent financing option for people who want to acquire a piece of land for investment or to build a home on. The first disbursement is made toward the acquisition of a plot under this sort of home financing. The successive payments are determined by the stage of the house's construction.
Home Construction Loan: This form of home loan is accessible to people who want to use the money to build a house. Only if you own a plot of land and intend to build a house on it will you be eligible for a loan. The disbursement is determined by the state of building of the house, just as it is with a composite loan.
Home Renovation/Improvement Loan: This type of loan can be used to cover the costs of renovating and repairing an existing home. This loan has the same interest rate as a conventional house loan. However, it has a shorter loan term than a traditional home loan.
Home Extension Loan: This loan is for those who need money to expand their living area. Financial institutions typically lend 75-90 percent of the construction estimate under this loan type, depending on the loan size and LTV ratio.
Bridge Loan: A bridge loan is a short-term home loan that can be used to purchase a new home with the profits from the sale of an existing home. The loan bridges the gap between the purchase of a new home and the sale of a previously owned home.
Step Up Loan: A sort of house loan in which borrowers pay lower EMIs in the early years of the loan term. There is, however, the option of gradually increasing the EMI amount. This makes the loan more accessible to young professionals just starting out in their careers.
Prospective homebuyers, usually, are more concerned about the home loan interest rates and tend to overlook other expenses involved in taking a home loan. These additional charges also make up the total cost of your housing loan and hence must be factored in when deciding on an offer. Below are some of the fees and charges that may be applicable to your home loan.
Application Fee is charged by lenders to cover all the preliminary expenses that they bear for conducting the verification.
Processing Fee covers the cost of credit appraisal and depends on the borrowers’ credit profile, income, and the home loan scheme. Also, not all lenders levy processing fees.
The administrative fee is charged by those lenders who split the processing fee into two parts. The part charged after the loan sanction is known as the administration fee. Citibank is one of the banks to levy administrative fees.
Foreclosure/Prepayment Charges are levied when a borrower prepays the home loan either fully or partially before the end of the loan tenure. Earlier, lenders used to charge prepayment penalties and foreclosure charges on home loans. But RBI banned lenders from charging individuals with prepayment penalties on floating rate home loans. As far as fixed-rate home loans are concerned, some lenders levy these charges.
Repayment Mode Related Charges are levied when borrowers request their lenders to change their existing repayment mode during the loan tenure. The fee usually goes up to Rs. 500 per instance (swap) and varies from one lender to another.
Rate conversion/switching fees are charged when borrowers request their lenders to switch or reduce their existing interest rates due to various reasons. The fee varies from one lender to another and usually goes up to 2% of the outstanding principal amount.
CERSAI Charges (Central Registry of Securitisation Asset Reconstruction and Security Interest) is the central online security interest registry of India. Potential lenders visit the CERSAI website to check whether the pledged property is not claimed by some other lender. For this process, the lenders pay a nominal fee, which they later collect from borrowers.
Overdue Charges on EMI are levied when a borrower misses or delays timely payment of loan EMIs. It attracts penal interest rates on the outstanding dues or overdue installments over the prevailing loan interest rates. Therefore, borrowers must pay the loan EMIs on time.
EMI Bounce Charges are levied when you fail to make timely loan payments due to insufficient funds in your bank account. Lenders usually levy Rs. 500 on such defaults which may vary from one lender to another.
Legal Fee is usually included in the processing fee but some lenders charge it separately when they engage firms to scrutinize borrowers’ legal documents.
Franking Fee, commonly referred to as stamp duty fee is a tax levied by the state government on any form of monetary transaction involving the transfer of rights of a property. The amount varies from one state to another and depends on state laws, type of property, etc.
Home loan eligibility differs across lending institutions and loan schemes. However, a common set of housing loan eligibility criteria is given below:
Nationality: Indian Residents, Non-Resident Indians (NRIs), and Persons of Indian Origin (PIOs)
Credit Score: Preferably 750 and above
Age Limit: 18 - 70 years
Work Experience: At least 2 years (for salaried)
Business Continuity: At least 3 years (for self-employed)
Minimum Salary: At least Rs. 25,000 per month (varies across lenders & locations)
Loan Amount: Up to 90% of property value
Apart from these, your home loan eligibility also depends on the property you are buying and the location of the property.
Proof of Identity: Copy of any one (PAN Card, Passport, Aadhaar Card, Voter’s ID Card, and Driving License)
Proof of Age: Copy of any one (Aadhaar Card, PAN Card, Passport, Birth Certificate, 10th Class Mark-sheet, Bank Passbook, and Driving License)
Proof of Residence: Copy of anyone (Bank Passbook, Voter’s ID, Ration Card. Passport, Utility Bills (Telephone Bill, Electricity Bill, Water Bill, Gas Bill) and LIC Policy Receipt
Proof of Income for Salaried: Copy of Form 16, latest payslips, IT returns (ITR) of past 3 years, and investment proofs (if any)
Proof of Income for Self Employed: Details of ITR of last 3 years, Balance Sheet and Profit & Loss Account Statement of the Company/Firm, Business License Details, and Proof of Business Address
Property-related Documents: NOC from Society/Builder, detailed estimate of the cost of construction of the house, registered sale deed, allotment letter, and an approved copy of the building plan
The Government of India offers tax benefits on home loans under the Income Tax Act of 1961. These home loan tax benefits help borrowers save a substantial amount of money every year.
Step 1- Share Your Details
Enter personal information as well as the details related to your loan requirements.
Step 2- View Offers
As per the details shared, a list of eligible home loan offers will appear. Compare interest rate, processing fee, and eligible loan amount from the list of eligible home loan offers.
Step 3- Submit the Application
Apply for the home loan offer that suits your loan requirements the best.
Once your application is successfully submitted, you will get a confirmation of your home loan application along with a reference number for future reference. Next, our loan expert will get in touch within 24 hours to take this application forward.
Credit Score: To have a decent chance of getting your application approved, you need have a credit score of 750 or above. Credit scores are used by banks and financial institutions to assess your creditworthiness and loan payback history before accepting your house loan. To prevent being turned down for a house loan, you should always keep your credit score up to date.
Inadequate Income: Banks and financial institutions examine your monthly income to see whether you will be able to pay back your equated monthly instalments (EMIs). It is usually a good idea to take out a home loan with an EMI that is less than 40% of your monthly income. Minimum income and employment requirements are set by lenders and play a significant part in the loan approval process. Make certain you're prepared.
Too many house loan applications in a short period of time: When you apply for a home loan from many lenders, it signals to banks and financial organisations that you are in need of credit and need to look for it elsewhere. Lenders believe you will be unable to repay your loan, resulting in your home loan application being denied.
Portfolio of existing loans: If you currently have a number of loans to repay, your lender may believe that you would be unable to afford another EMI on your current income, resulting in your house loan being denied. As a result, it is preferable to apply for a home loan after you have paid off a debt.
1. Can I get a home loan for the entire property value?
No, when providing individuals with a home loan, banks often preserve a 20% margin. This means that the lender may agree to lend you 80 percent of the property's worth as a home loan, but you will be responsible for the remaining 20%. Depending on several aspects such as your repayment capacity, age, credit score, and property-related characteristics such as location, age, and market value, the lender may agree to give you with up to 90% of the property value as a house loan.
2. For what purposes can you avail of a home loan?
Following are a few of the reasons to avail of a home loan -
To buy a new house/plot
To construct a house
To renovate or repair damages to your home
To add a new room to your already existing home, or to expand the space in your house in some other way
3. Which bank is the best for home loans?
HDFC Bank, SBI, PNB, ICICI Bank, Bank of Baroda, Axis Bank, and Canara Bank are some of the most prominent banks in India that offer house loans. The greatest house loan for you, however, would be one that meets your lending conditions. As a result, to find the best bank for a house loan, you must first assess your needs. When evaluating home loan offers, don't only go with the one with the lowest interest rate; instead, look at the whole package. Other factors to consider include processing costs and loan repayment and prepayment rules, in addition to the interest rate.
4. How much credit score should I have to get a home loan?
Lenders prefer to lend to house loan applicants who have a credit score of 750 or above. They also charge cheaper interest rates to clients with better credit ratings on house loans. Many lenders, however, would allow house loan applicants with credit scores below 750, albeit at higher interest rates than other borrowers.
5. Who can cosign a home loan with me? Can my friend cosign a home loan for a flat?
Co-signing a home loan with family members such as your father, mother, siblings, and so on is possible. In addition, if you're applying for a home loan, your spouse or adult children can be co-signers. Your friend cannot co-sign a loan in India because he or she is not a blood relative or otherwise related to you.
6. How many people can cosign a home loan with me?
At present, up to 7 people can cosign a home with the primary applicant. However, all of them need to be blood- relatives of the family member.
7. What are the reasons for home loan rejection?
Low credit score
Incorrect personal details in the credit report
Frequent credit rejections by other lenders
Unstable or insufficient income
Age factor
Location of the property
8. Are there any prepayment charges in case of a home loan?
In the case of a floating rate home loan, lenders don't charge a pre-payment penalty as per RBI directives however a penalty may be applied in case of prepayment of a fixed-rate home loan.
9. What is an LTV Ratio?
The Loan-to-Value (LTV) Ratio is one of the elements that a lender considers when approving a home loan. It shows you how much money you can borrow based on the appraised value of the property you offered as security. It's always given as a percentage. So, if you're buying a house for Rs. 1 crore and your lender's LTV ratio is 75 percent, your lender's maximum financing or loan will be Rs. 75 lakh. Lenders measure their risk in sanctioning a secured loan, such as a home loan, using the LTV Ratio and other similar computations. This ratio assures that a financial institution does not sanction a loan amount that is greater than the property's appraised value.
10. What is a home loan balance transfer?
A home loan balance transfer is a service that allows borrowers to transfer their existing house loan to a new lender in exchange for cheaper interest rates or better terms. Almost all lenders allow consumers to transfer their house loans. Regularly paying your loan EMIs is one of the characteristics that allows you to take advantage of the loan transfer option. However, do a cost-benefit analysis before transferring your house loan balance. Calculate the difference in interest rates between the two lenders, as well as the amount of the loan that is still owed and the remaining term.