Thank you for your interest in Home Loan from RELIANCE HOME FINANCE LIMITED. Unfortunately, we do not have a tie-up with RELIANCE HOME FINANCE LIMITED currently.
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Thank you for your interest in Home Loan from RELIANCE HOME FINANCE LIMITED. Unfortunately, we do not have a tie-up with RELIANCE HOME FINANCE LIMITED currently.
Talk to our experts to apply for a similar offer from our partner banks instead
Are legally adult enough to handle it
Have still got it
Get a regular pay check
Make more than a basic buck
EMI limited to about 50%
of monthly income
Loan capped @ 75% - 85% on property value
EMIs of other loans lower
Making your spouse a co-applicant
Choose longer tenure loans of up to 30 years
Alternatively add your parents as co-applicants
|Interest Rate (Monthly reducing balance)||9.40% - 19.00%|
|Processing Fees||Varies with bank|
|Loan Tenure||1 Year to 30 Years|
|Partial pre-payment Charges||Varies with bank|
|Pre-closure Chargest||Varies with bank|
Home loan or housing loan is one of the most popular products offered by banks and NBFCs to customers. Home loan is also the largest selling banking product and the one that ensures the longest banking relationship with the lender. Owning a home of your own is generally an obvious as well as a major decision in a person’s life. However, the cost of construction or purchase of property is quite high and this is where home loans play a major, almost indispensable role for majority of home buyers. Home or housing loans are advances made to borrowers who require funds to purchase houses/flats/land. They can also be availed of for construction, extension and renovation of houses. Lenders can be banking or non-banking financial institutions.
In the last few years, real estate has been one of the most lucrative investment options for investors. No matter how profitable it sounds, the rising stature of real estate as an investment option has led to soaring prices of property in the country. Both land and buildings have become extremely expensive for customers to buy. This has led to a surge in the number of home loans that are applied for each day.
Depending upon the type of property being purchased and the quantum of loan being availed, home loans can be classified into the following different types. In India, banks and NBFCs generally offer home loans under any one of the following listed variants of housing loans.
As the name itself indicates, home purchase loans are specifically given for purchase of flats or homes. These are the most popular type of home loan and are availed by most home loan borrowers. Almost all banks and Non-Banking Financial Corporations offer home purchase loans.
Home loan for construction is offered to customers who want cash to construct their own house on an existing piece of land. The catch is that the land for construction should have been bought within a year of availing the loan for the cost of land to be counted as part of this loan. In case the land was bought earlier than one year, then the cost of land is excluded from the loan amount. The formalities for construction loan are slightly different than those for regular home loans. The loan applicant needs to give a lump-sum construction cost estimate to the lending entity and thereafter the lender evaluates and decides to sanction or reject the loan.
Plot loans are loans offered by banks for purchase of land or plot. These loans are not necessarily offered by all banks or NBFCs.
Home loans for extension or renovation of home are offered to those home loan borrowers who already have a house but are looking for further construction or renovation on their existing piece of property. For example, addition of an extra room or renovating a staircase etc.
Some of the most prominent features of home loans are outlined below.
This means that home loans are offered in turn for a security deposited by the loan borrower. Collateral is usually the property that is being funded. Existing property can also be put up as security.
Whether you need a house to stay in or for investment purposes, home loan can be availed from a bank of your choice.
Considering the cost of buying property as compared to any other commodity, the loan amount offered and sanctioned is substantial as compared to other types of loans. Hence, the loan tenures offered for home loans are also longer than those for other types of loans.
Since, the amounts sanctioned towards home loans are usually huge and the tenure also is long, the repayment of home loans is done in equal monthly installments.
Pre-payment of home loan is allowed by all banks, private and public. Earlier, some banks used to charge pre-payment fees for earlier than stipulated repayment of home loan amount. However, these days most public and private banks let borrowers pay off their home loan as and when convenient. Most banks have stopped charging any pre-payment charges for the same.
Since the loan quantum for home loans is generally greater than all other types of loans, the repayment period also is longer than that for any other loan type.
Home loans allow for joint loan applications. Since the loan quantum is high and the tax benefit also is good, banks allow for co-application or joint application of home loans.
Interest rate charged on any home loan scheme is one of the primary features. The rate of interest is what generally helps a customer decide in favor of or against a home loan scheme or lending entity. Fixed rate of interest and floating rate of interest are the two types of interest rates that banks normally ask customers to choose from at the time of home loan application. There are banks that give their home loan customers the flexibility to switch from one type of interest rate to another.
Home loans are secured advances and therefore the eligibility criteria for these loans is laid out differently by different banks. Here are some of the most important factors that feed into determining home loan eligibility criteria for almost all banks in India.
Documents to be submitted differ according to the eligibility requirements. The following, however, are commonly requested for:
India has a long list of both private and public sector banks that offer home loans. The main confusion which plagues most first-time home loan applicants is which bank to apply with. There are pros and cons applicable to every bank. Public sector banks are more stable and less likely to go bankrupt in the long run than private sector banks. Alternatively, private sector banks offer smoother customer service and processing time as compared to public sector banks.
One of the most popular strategies that customers employ is to avail home loan from the bank where their salary account or savings account is hosted. This eases out the approval process a bit since all the KYC details and financial data is already available with the lending bank.
Various surveys have come up with a list of most popular banks for home loans in India. However, the 5 names which are always present in these lists are State Bank of India , HDFC Bank, Axis Bank, LIC Housing Finance and ICICI. While SBI is the most trusted brand because of its public holding, HDFC despite being a private lender is popular since it is basically aimed at offering housing finance to customers in India. Most customers look for an established brand name before zeroing down on a particular bank name. The main reason for this is home loan as a product is a long-term offering and it is wise to choose a bank that has been around for some time and one that has a substantial customer base.
Apart from banks, there are several NBFCs or Non-banking financial companies which offer home loans to customers. These companies too, offer home loan to customers. The biggest differentiating factor is that the eligibility guidelines for NBFCs are slightly flexible than those of banks. Also, the loan amount sanctioned by an NBFC is generally greater than that sanctioned by any bank, public or private. Top NBFCs that offer housing finance to customers in India are India bulls Housing Finance, Dewan Housing Finance, Reliance Capital, Shriram Transport Finance, Muthoot Finance, LIC Housing Finance.
Apart from the rate of interest that is charged on home loan products, there are various fees and charges that are applicable to housing finance offered by different banks. These charges may differ in value from one bank to another, however, the types of charges remains the same for almost all banks.
Banks generally charge a fee for processing your home loan request. These charges vary with different banks. This fee is non-refundable and is either a specific percentage of the loan amount or a fixed amount of money. There are times when banks are willing to negotiate on the processing charges and lower this fee or waive it off completely depending upon certain terms and conditions.
Late payment charges are levied by almost all banks when a loan borrower is late in paying loan installment. There are times when financial crunch or some other financial liability or plain oversight might result in non-payment of home loan installment on time. This results in a late payment fee being levied by the bank.
Most banks have stopped charging any kind of fee for pre-closure of home loans. However, some banks still charge some percentage of home loan balance as pre-payment charges. This fee is typically levied when any home loan customer repays his/her home loan prior to the stipulated home loan tenure.
Typically, home loans are offered by banks either on a fixed interest rate or on a floating rate of interest. The customer does have a choice of switching between these two rates. Every time a customer applies for switching from fixed rate to floating or vice versa, conversion charges are levied by the bank. These charges are some specific percentage of the principal outstanding amount.
Legal fee is charged in order to pay the lawyer who does the task of verification of property that is being bought with the loan amount. Most banks do not have in-house lawyers and as such pay fees and recover it from home loan customers.
Some banks charge administrative fee separately from the processing charges. This fee is levied to pay for the administrative cost that the bank incurs for processing of home loan application. Broadly speaking, administrative fee is levied by banks to compensate for the back-end administrative processes that are performed while processing of home loan applications.
One copy of home loan statement is provided by the bank free of cost, more than that is chargeable. This fee is generally specific to the bank and hence varies from one bank to another.
The days of running from pillar to post to submit just one loan application form are over. Online home loan platforms like BankBazaar are the latest fad. You no longer need to perform the age-old task of going to each financier, finding out what offers are available, collating the information, calculating EMIs , submitting the required documents and following up on applications. The easiest way is to go online and compare various home loan offers in the market and then make a list of your chosen lenders. This saves a lot of time and effort of home loan borrowers as well as financial institutions.
With technology leading the way in almost every sector, online information gathering and application of home loans is gaining momentum. Online application is a time-saving and convenient way to apply for loans and is fast becoming the preferred mode of choice for many loan borrowers.
BankBazaar is India’s leading portal for financial services where different home loan offers from various banks can be compared at one place and applied for without having to visit any lending institution. Here’s what users can do:
Buying a house can be one of the most important financial decisions of an individual’s life and as such there are a host of things that one needs to be careful about while availing home loan.
Listed below are some of the most prominent points that should be kept in mind when one is looking to obtain housing finance.
The first and foremost point which marks the beginning of any home loan application is finding about various home loan schemes in the market and the various banks and lending institutes that are running those. A thorough research will give not just specific details about different loan schemes but will also help you understand the various pros and cons that lenders might have.
For any home loan borrower, there are two types of interest rates that they can choose from. These are fixed and variable interest rates. Choosing one of these and knowing why to choose it is a major step that determines your home loan repayments installments and the overall interest amount that you pay towards your home loan.
Different banks charge different amounts as loan processing charges. Apart from this there are various other types of fees and charges that banks levy from their customers. Checking on these charges can help you save quite a bit of money when applying for home loan.
Home loans are huge financial liabilities and as such banks make sure that you have the necessary financial capability to repay the same. This is why credit scores of loan applicants pay a huge role in deciding the home loan eligibility. Applicants with a mediocre or a poor credit score may end up with their home loan application being denied or with a higher rate of interest being charged.
Certain banks allow free pre-closure of home loans while other charge a specific pre-payment fee. Depending upon your preference, you should find out all about pre-closure terms and conditions and then apply for home loan with the bank of your choice.
Home loan is a huge as well as long financial liability. Hence, reading everything that is listed in the home loan document that you sign is a primary step. Most home loan applicants get their loan agreement reviewed by a private lawyer so as to ensure that all terms and conditions listed in the document are in-line with their understanding of the financial product.
Generally, a host of tiny but crucial information is listed in the fine print that comes along with your loan document. Reading through the full document is crucial to you not feeling cheated at any point of time, later.
Availing a home loan scheme that suits your financial stand and zeroing in on a house that is well-aligned with financial capacity is a sure way to ensure a comfortable loan tenure. There are times when customers make the mistake of buying a property that is way too expensive for their pocket. At other times, customers may end up availing a loan that has installments which are too high for them to pay. Any such situation will lead to delayed repayments and thereby a higher final amount being paid to the bank as interest and fees.
There is no particular right time for making your home loan application. As soon as you have figured out your budget and zeroed down on the property that you want to buy, you should apply for home finance.
Yes, mostly. Although a lot of loan processing work has been shifted to online platforms, still a loan applicant is required to visit the lending bank branch at least once to formally close the loan processing formalities. Many private banks have started sending their representatives to borrowers’ place to get documents and forms signed and verified.
No. Generally, banks only lend 80% of the cost of your property. The rest 20% is to be borne by the loan borrower. However, to ease out the process for customers, most banks have broken up this ration into 10-80-10 so that at the time of availing the loan, customers are only required to pay 10% of the total cost and the rest is paid by the bank.
Repayment of loan starts after the entire home loan is disbursed to the borrower. In case of under-construction properties banks allow payment of the partially disbursed amount. Towards this partially disbursed loan amount, customers are free to either repay the principal and interest amount both or just the interest amount or none at all.
Yes. All banks allow pre-payment of home loans. Some banks charge a pre-payment fee for that while others do not.
Current home loan borrowers who have a running home loan account can choose to continue with base rate or switch to MCLR. New home loan borrowers need to avail the new MCLR rates which are subject to change every set interval of time as mandated by the RBI.
Your home loan will get sanctioned as soon as all the required documents are submitted and verified successfully. This may take anywhere between 10 to 30 days.
Yes. Home loans are a great instrument to avail tax benefit. This is offered to both the interest and principal components of home finance. Under section 24(1) interest repayment of Rs.1,50,000 is eligible for exemption and on the same housing loan a principal amount of Rs.1,00,000 is eligible for exemption from tax.
Any kind of property is considered an asset and hence buying a property is considered as a wise decision. Also, real estate prices have been appreciating on an annual basis. If you are confident that your income is sufficient to cover you for a long term liability like home loan then you can surely avail one to buy a property.
EMI stands for Equated Monthly Installments. An EMI is made up of two components, principal and interest. Any loan availed by a borrower is repaid in EMIs over the loan tenure.
Since home loan is a huge loan amount and the tenure also is long, hence, almost all banks ask borrowers to furnish some collateral as security against the loan. This include the papers of property for which loan is being sought, some other property papers, any fixed deposit schemes or insurance schemes etc. that are on the loan borrower’s name.
Yes. You can apply jointly in your and your spouse’s name. Both of your incomes will be considered for determination of loan quantum.
Generally, all banks ask for proof of address, proof of identity, bank account statements and salary details from home loan borrowers. This list may differ a bit from one bank to another.
Home loan EMI payments can be made to the bank either by using offline channels like cheque, demand draft and cash or by availing the net banking facility that all banks offer to their home loan customers. Post dated cheques and Standing Instructions are another popular way to make EMI payments.
Any property document that you submit as security collateral is returned to you only once the entire home loan amount is repaid and the home loan on your name is closed.
Yes. Home loans are offered under various sub-heads. Housing finance for renovation of property or construction of house is also offered by all major banks in the country.
Yes. Most banks allow switching between fixed and floating rates. However, customers may be charged a particular fee for the same.
Home loan balance transfer is being considered by an increasing number of individuals across the country, and here’s why: Firstly, the rates made available by lenders, which are based on market conditions as well as other lending institutions, are quite attractive. Secondly, the fact that interest rates are lower, the EMI’s you will pay towards the end of each month will also come down to a considerable extent, thereby enabling greater savings. Then, the fact that EMIs can be paid off on time considering they are relatively low means that there will be an improvement in your credit score.
Considering the benefits you can avail through it, a home loan balance transfer is a good idea.
23nd March 2017
The Retirement Fund body, Employee Provident Fund Organisation (EPFO) is all set to launch a housing scheme that will allow its 40 million subscribers to make down payments for loans and pay their EMIs through their EPF Accounts. To avail this facility, subscribers as well as employers will need to form a group housing society to tie up with banks, builders or home sellers. Each housing society formed for this purpose will require a minimum of 20 members. The various benefits available to the subscribers can be clubbed under various central and state schemes, such as, the Pradhan Mantri Awas Yojana (PMAY). The EPFO will provide a certificate indicating the member’s repayment capacity, thereby, improving the individual’s creditworthiness. The EPFO will not be party to any agreement between the home buyer and seller and will not involve itself in any dispute or legal battle. In case of a dispute, the EPFO can exercise its right to stop the down payment or monthly instalment of the loan on request of the promoter or the executive head of the housing society.
22nd March 2017
Borrowers who previously enjoyed tax benefits on the properties they had made available on rent are in for bad news as the government has reduced such benefits. During the Budget 2017-18 speech, the Finance Minister of India, Mr Arun Jaitley, said “"In order to address the existing anomaly of interest deduction in respect of let out property vis-a-vis self-occupied property, it is proposed to restrict set off of loss from house property against income under any other head during the current year up to Rs. 2 lakh. The loss not so set off would be allowed to be carried forward for set off against house property income for eight assessment years.
As per the prevailing tax laws, borrowers can subtract the whole interest paid on home loan provided the rental income has been adjusted, for properties that have been rented out. However, individuals who have taken a home loan for self-occupied properties can avail a deduction of Rs.2 lakhs per annum provided the rental income has been adjusted, and the amount in excess of Rs.2 lakhs could be carried forward for eight assessment years.
13th March 2017
The union cabinet recently approved the extension of the duration of loans under the CLSS (Credit Linked Subsidy Scheme) vertical of Pradhan Mantri Awas Yojana Mission from 15 years to 20 years. The cabinet also introduced the scheme for the middle income group category. The amount of money allocated for 2017-18 is Rs.1,000 crore. The lower income group and the economically weaker sections of society are the main targets of the scheme.
07th February 2017
Piramal Finance Pvt. Ltd. plans to start lending to smaller corporate groups, lend to newer sectors, form a joint venture platform for investments that are related to slum redevelopment and also begin housing finance operations within a period of four months. Piramal Finance Pvt. Ltd. comprises the complete financial services business of the Piramal group. This firm that is based out of Mumbai is setting up a new line of business wherein the focus is on emerging corporate lending, for all transactions that are between Rs.30 crore to Rs.90 crore, similar to lending to SME which is a segment that has not been tapped as of yet.
At the beginning of 2017, Piramal Finance announced its new housing finance business wherein 70% to 75% of its lending book will provide housing finance to individuals and the rest will consist of construction loans of a maximum of Rs.50 crore to small developers. Under the real estate investment business, this company is at an advanced stage of forming a joint venture with other investors to do structured lending deals and equity in slum redevelopment projects in Mumbai.
30th January 2017
The upcoming budget of 2017 is probably going to be the most important budget for the Narendra Modi government since its ascent to power. The government will have to resort to some damage control post demonetization and also offer some SOPs to the general populace to soothe the burns of the current cash crisis, with assembly elections also round the corner.
5 changes that are most likely to be seen in the 2017 budget session are as follows:
Income Tax Relief
Some major tax relief might be on the way for the middle class and salaried individuals. The Minister of Finance, Arun Jaitley hinted at a possible tax relief in the fiscal year 2017-2018.
Home loan interest rate is also showing signs of going down due to the effect of demonetization, with sources saying that a reduction of 5% to 6% is in the offing.
Automobiles sales have gone down by 10% since the demonetization drive began. So, to counter the effects, the government might cut costs of small cars, commercial vehicles and two-wheelers.
Increased Budget for MNERGA
The MNERGA scheme might see a significant influx of money to offset the effect demonetization had on the livelihoods of the daily wage earners.
Crackdown on Benami Properties
The Modi government has already indicated that their next target in the war against black money hoarders is going to be benami properties. Chances are that agricultural land and other immovable property could get linked with Aadhar and PAN cards to counter cash laundering through property buying and selling.
5th January 2017
The speculation on the diminishing real estate value has led mortgage companies to seek margin money on loans against property. According to analysts, the LAP portfolio has become riskier due to higher loan-to-value ratio, high ticket size, high balance transfer and loans granted based on cash flows to small businessmen. There is said to be a 5 to 10% fall in LTV ratio of new loans, while existing borrowers will be asked to make part payments. R Vardarajan, MD of Repco Home Finance, said that since they offer LTV at 50% they will not be affected by the fall in realty prices. Realty prices may fall 15 to 20% due to a decrease in cash transactions. SMEs are now leaning towards cashless transactions as business has dropped by 30 to 50% in November.
22nd December 2016
The recent demonetization drive has hit the real estate business hard in the premium property sector. But the same move can prove to be a boon in the affordable housing market as the prices of real estate climb down.
The Country Head and Chairman of JLL India, Anuj Puri says that with land prices coming down especially in fringe areas of the cities, the development cost of projects on these lands will also come down making the housing units cheaper and more affordable. Also, interest rate on home loans are likely to decrease by almost 2% in the current demonetized market.
The RBI has declared that deposits worth Rs.45 lakh crore has flowed into the banking system, with only Rs.1 lakh crore of disbursal till date. Experts predict that the huge surplus of liquidity will bring down the lending rate by 50-75 basis points in the coming 4 to 5 months.
The affordable housing sector has already attracted big firms like Tata housing, Mahindra Lifespaces, Shapoorji Pallonji Group, Puravankara Projects, Assetz property Group and Emgee Group among other players, due to the government emphasis on providing housing for all by 2022.
19th December 2016
After demonetization, RBI had raised the CRR for banks to 100% of their deposits to absorb excess liquidity, and bring down the cost of funds. HDFC Bank had cut its 1-year MCLR to 8.9%, to bring it on par with SBI and ICICI Bank. Melwyn Rego, CEO of Bank of India, said that bond yields rose sharply following RBI’s decision to hold rates. Despite excess liquidity, interest rates are expected to remain low as loan demand has decreased due to demonetisation, and the fall in capacity utilisation.
According to ICICI Bank CEO, Chanda Kochhar, deposit, and lending rates are expected to continue their downward trend due to excess liquidity. Yes Bank MD, Rana Kapoor said that post the US Fed meeting, and stabilization of the demonetisation initiative, there will be room to deliver a 50 to 75 bps cut in the repo rate at the next RBI meeting in February 2017. R Sivakumar, Head of Fixed Income at Axis Mutual Fund, said that short-to-medium term rates may remain contained, while yields on short-to-medium term bonds will likely fall.
19th December 2016
The affordable housing sector which already has 14 players in the field is attracting 17 new entrants into the market.
There’s also a shortage of around 19 million housing units in urban pockets and 40 million units in rural areas. With the government pushing for housing for all by 2022, the Indian home loan sector is bound to grow exponentially in the coming years.
The current market of home loan consisting of 76 housing finance firms, and government and private banks is focussing on the middle and the lower middle class population with an income of around Rs.1.5 lakh to Rs.10 lakh p.a. Finance institutions are using new technology to reach those at the very end of the consumer pool, and have started a rate competition to entice them.
Axis Bank Ltd, with over Rs.60,000 crore mortgage portfolio, gives out close to Rs.2,000 crore in home loans per month. Rs.150 crore of that goes into the affordable housing sector. The case is similar for Dewan Housing Finance Corp Ltd, PNB Housing Finance Ltd, Yes Bank, DCB Bank Ltd, and others in the home loan business.
The mortgage market of Rs.10 trillion has been increasing at 18-19% per year, but it’s still only 8% of India’s GDP. But the mortgage to GDP ratio is anticipated to rise up to 20% by the year 2020.
19th December 2016