A "low interest" loan shouldn't mean you have very little interest in paying it back!
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    Bankbazaar Home Loan

    We found 43 Home Loan
    Bank Name
    Interest Rate Range
    Processing Fee Range
    Loan Amount
    Tenure Range
    8.6% - 8.95% Floating
    Up to 0.5% (min. ₹5900) One time fee
    5L Min
    1-30 Years
    Response Time : Within 30 minutes
    Rs.5,000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    8.40% - 8.85% Floating
    0.5% (max. ₹11,800) One time fee
    5L - 10Crs
    3-30 Years
    Response Time : Within 30 minutes
    Rs.5,000 Amazon voucher free Paperless approval available
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    8.35% - 8.60% Floating
    Up to 0.5% (max. ₹11,800) One time fee
    5L - 10Crs
    1-30 Years
    Response Time : Within 30 minutes
    Rs.5,000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    8.40% - 10.05% Floating
    Up to 0.5% One time fee
    2L - 3Crs
    1-30 Years
    Response Time : Within 30 minutes
    Rs.5,000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    8.35% - 9.25% Floating
    0.50% (min. ₹10,000) + applicable tax
    12L - 5Crs
    1-20 Years (10 yrs plot loan)
    Response Time : Within 30 minutes
    Rs.5,000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good To Know
    Eligibility Criteria
    8.35% - 11.75% Fixed/Floating
    0.50% (min. ₹10000) One time fee
    5L - 10Crs
    1-30 Years
    Response Time : Within 30 minutes
    What you'll love
    Documents
    Perks
    Think about
    Fees & Charges
    Good to Know
    Eligibility Criteria
    8.25% Floating
    5,000 + applicable tax One time fee
    40L - 5Crs
    1 - 25 Years
    Response Time : Within 30 minutes
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    11.5% - 13% Floating
    2% One time fee
    25L - 3Cr
    1-20 Years
    Response Time : Within 30 minutes
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good To Know
    Eligibility Criteria
    8.55% - 8.99% Floating
    ₹5,000 to ₹10,000 + applicable tax One time fee
    20L - 10Crs
    1-30 Years
    Response Time : Within 30 minutes
    Rs.5,000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Think about
    Fees & Charges
    Good to Know
    Eligibility Criteria
    10.67% Floating
    1% One time fee
    5L - 5Crs
    1-30 Years
    Response Time : Within 30 minutes
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good to Know
    Eligibility Criteria
    8.40% - 8.50% Floating
    0.5%
    20L - 10Crs
    1-30 Years
    Response Time : Within 30 minutes
    Rs.5,000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Fees & Charges
    Good To Know
    Eligibility Criteria
    8.6% - 8.95% FIXED:3 years,FLOATING Thereafter
    Up to 0.5% (min. ₹5900) One time fee
    5L Min
    1-30 Years
    Response Time : Within 30 minutes
    Rs.5,000 Amazon voucher free
    What you'll love
    Documents
    Perks
    Fees & Charges
    Value Adds
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  • Home Loan Reviews

    • Punjab National Bank Home Loan
      "Be consistent in the details"
      0.5 1.0/5 "Really Bad"
      PNB housing finance was not a good one for me, though they were okay in the process. They have charged me 100% of the processing fees when I was supposed t be charged only 50%. I had to pay more than 11k. They need to be consistent in the whole process.
      Was this review helpful? 0
      , vadodara
      Reviewed on Sep 23, 2017
    • Bank Bazaar Home Loan
      "Satisfactory"
      0.5 4.0/5 "Great!"
      The services at Bankbazaar has been good and the experience is satisfactory. I faced no issues or inconvenience faced. The website is also good and it is very much informative and very easy to browse through and choose the best bank in the market.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Sep 23, 2017
    • Punjab National Bank Home Loan
      "Overall good"
      0.5 4.5/5 "Excellent!"
      PNB housing finance was very much cooperative and they collected my documents and processed my papers. The disbursement also happened as earlier as possible. The interest rate and processing charges is normal and the overall experience is perfect.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Sep 23, 2017
    • Bank of India Home Loan
      "Fantastic"
      0.5 5.0/5 "Blown Away!"
      I am having the home loan with the Bank of India and their interest rate is around 8.9%. The loan amount got disbursed within specified time period, also I am really happy with the Bank of India for my home loan disbursal.
      Was this review helpful? 0
      , mumbai
      Reviewed on Sep 23, 2017
    • Bank Bazaar Home Loan
      "GOOD SERVICE"
      0.5 4.0/5 "Great!"
      It was a very good service from Bankbazaar ,everything was fine from Bankbazaar service ,even the customer service and the representatives were very helpful and responsible during my loan process they explained everything regarding my loan process.Bankbazaar website was also user friendly. friendly.Overall service was good from Bankbazaar.
      Was this review helpful? 0
      , chandigarh
      Reviewed on Sep 23, 2017
    • ICICI Bank Home Loan
      "WORST SERVICE"
      0.5 1.0/5 "Really Bad"
      It was a worst service from ICICI ,I got only one call from their representatives after that there was no proper response from ICICI representatives . They didn't give any proper information's regarding interest rate ,overall I am not happy with the service of ICICI.
      Was this review helpful? 0
      , chandigarh
      Reviewed on Sep 23, 2017
    • Bank Bazaar Home Loan
      "GOOD SERVICE"
      0.5 3.5/5 "Pretty good"
      The Service was very good from Bankbazaar , I got lot of options from Bankbazaar for my loan process . Even the response was very good ,I checked Bankbazaar website which was easy to use and user friendly overall it was an good experience from Bankbazaar.
      Was this review helpful? 0
      , bangalore
      Reviewed on Sep 23, 2017
    • HDFC Limited Home Loan
      "GOOD SERVICE"
      0.5 3.0/5 "Satisfactory"
      It was a very good service from HDFC ltd,response was very good from their representatives ,helpful customer service .Their interest rate was high compared to market value ,overall it was a good service from HDFC ltd for my loan process .
      Was this review helpful? 0
      , bangalore
      Reviewed on Sep 23, 2017
    • Bank Bazaar Home Loan
      "GOOD SERVICE"
      0.5 3.5/5 "Pretty good"
      The Service was very good from Bankbazaar , I got lot options from Bankbazaar for my loan process . Even the response was very quick ,I checked Bankbazaar website which was easy to use and user friendly overall it was an good experience from Bankbazaar.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Sep 23, 2017
    • ICICI Bank Home Loan
      "GOOD SERVICE"
      0.5 4.0/5 "Great!"
      It was a good service from ICICI ,very helpful and responsible representatives from ICICI during the loan process . I had personal issues so I postponed my loan plan for next year also their interest rate was also 8.4 which was high ,still the overall service was good from ICICI .
      Was this review helpful? 0
      , hyderabad
      Reviewed on Sep 23, 2017
    • HDFC Limited Home Loan
      "GOOD SERVICE"
      0.5 4.0/5 "Great!"
      It was a excellent experience with hdfc ltd for the home loan. They have explained everything very clearly to me. The process took some days not sure about it. I also got a good rate of interest at that time 8.75%. And also a processing fee was charged nominal I had taken it for 20 years but I pre closed it later.
      Was this review helpful? 0
      , mumbai
      Reviewed on Sep 23, 2017
    • ICICI Bank Home Loan
      "GOOD SERVICE"
      0.5 4.0/5 "Great!"
      I have taken home loan from ICICI bank. The approved loan amount from the bank is 15 lakhs with a rate of interest of 10.75%. I am satisfied with the rate of interest as the promise to give me in that rate and the processing fees was bit high with ICICI bank,processing fee was normal. Tenured is for 20 years i have taken.
      Was this review helpful? 0
      , kharagpur
      Reviewed on Sep 23, 2017
    • Allahabad Bank Home Loan
      "GOOD SERVICE"
      0.5 3.0/5 "Satisfactory"
      The loan amount which ALLAHABAD BANK offered me was good. The customer services and representatives where very helpful. They contacted me and informed me the details. I was fine with the interest rate which was 8.5. Overall I can say it was good service.
      Was this review helpful? 0
      , kolkata
      Reviewed on Sep 23, 2017
    • Bank Bazaar Home Loan
      "EXCELLENT SERVICE"
      0.5 5.0/5 "Blown Away!"
      The Service was very excellent from Bankbazaar , I got lot of options from Bankbazaar for my loan process . Even the response was very excellent from their representatives ,I checked Bankbazaar website which was easy to use and user friendly overall it was a excellent experience from Bankbazaar service.
      Was this review helpful? 0
      , kolkata
      Reviewed on Sep 23, 2017
    • Punjab National Bank Home Loan
      "EXCELLENT SERVICE"
      0.5 5.0/5 "Blown Away!"
      It was an very good service from PNB ,during my loan process the representatives of PNB was very helpful and very responsible representatives . But I was little busy with my personal issue ,even with a interest rate it was fine so I can say overall it was a excellent service.
      Was this review helpful? 0
      , kolkata
      Reviewed on Sep 23, 2017
    • Bank Bazaar Home Loan
      "EXCELLENT SERVICE"
      0.5 5.0/5 "Blown Away!"
      The Service was very good from Bankbazaar , I got lot options from Bankbazaar for my loan process . Even the response was very quick ,I checked Bankbazaar website which was easy to use and user friendly overall it was an good experience from Bankbazaar.
      Was this review helpful? 0
      , hyderabad
      Reviewed on Sep 23, 2017
    • ICICI Bank Home Loan
      "GOOD SERVICE"
      0.5 4.0/5 "Great!"
      It was an very good service from ICICI ,response was very good from their representatives ,helpful customer service . Even their interest rate was also fine it was low compared to others ,overall it was an good service from ICICI .
      Was this review helpful? 0
      , hyderabad
      Reviewed on Sep 23, 2017
    • Bank Bazaar Home Loan
      "EXCELLENT SERVICE"
      0.5 5.0/5 "Blown Away!"
      Service was very good from Bankbazaar , I got lot options from Bankbazaar for my loan process . Even the response was very quick ,I checked Bankbazaar website which was easy to use and user friendly overall it was an good experience from Bankbazaar.
      Was this review helpful? 0
      , new delhi
      Reviewed on Sep 23, 2017
    • Punjab National Bank Home Loan
      "EXCELLENT SERVICE"
      0.5 5.0/5 "Blown Away!"
      The loan amount which PNB housing finance offered me was not sufficient. So I cancelled my plans in taking the home loan. Else the customer services and response was good. They contacted me and informed me the details. I was fine with the interest rate and charges. Overall I can say it was excellent service.
      Was this review helpful? 0
      , new delhi
      Reviewed on Sep 23, 2017
    • Bank Bazaar Home Loan
      "GOOD SERVICE"
      0.5 4.0/5 "Great!"
      Service was very good from Bankbazaar ,customer service of Bankbazaar was very good and responsible. I even have checked with Bankbazaar website which was user friendly I like most in Bankbazaar is I can check my credit profile through Bankbazaar website which was very useful for me ,so overall it was an good service from Bankbazaar .
      Was this review helpful? 0
      , chennai
      Reviewed on Sep 23, 2017
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    Home Loan is Rated as "Great!" by 23759 Users

    Fees & Charges

    Promised Interest Rate

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    Home Loan BYTES FROM OUR KITCHEN

    Home Loan

    You're eligible for a Home Loan if you:

    01
    02
    03
    04

    Are legally adult enough to handle it

    Have still got it

    Get a regular pay check

    Make more than a basic buck


    Your eligibility depends on

    01
    02
    03

    EMI limited to about 50%
    of monthly income

    Loan capped @ 75% - 85% on property value

    EMIs of other loans lower
    your eligibility


    Boost your eligibility by

    01
    02
    03

    Making your spouse a co-applicant

    Choose longer tenure loans of up to 30 years

    Alternatively add your parents as co-applicants


    Nothing gets done without that paperwork (which we'll happily carry over to the bank for you, no sweat). Here's what you'll need:

    • 1. Photo ID and age proof
    • 2. Signed application form with photograph
    • 3. Processing fee cheque
    • 4. Last 6 months bank statement
    • 5. Documentation for salaried applicants:
      • Last 3 months salary - slips
      • Form 16 or Income Tax Returns
    • 6. Documentation for self-employed applicants:
      • Last 3 years Income Tax Returns with computation of Income
      • Last 3 years CA Certified / Audited Balance Sheet and Profit & Loss Account

    Home Loan Interest RatesUpdated on 25 Sep 2017

    Home Loan Details
    Interest Rate (Monthly reducing balance) 8.35% to 18%
    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

    What is Home Loan or Housing Loan?

    A home loan or housing loan is an amount borrowed by individuals for a fixed tenure from financial institutions to buy, construct, repair or renovate a residential property. Lenders charge an interest on the amount borrowed, which has to be paid by the borrowers along with the principal amount.

    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.

    Why Home Loan:

    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.

    • Even though rising prices of real estate is one reason for borrowers availing home loans, another major reason behind this is that property transactions are generally hefty as compared to other day to day financial transactions. As such, it is not at all necessary that the buyer will have the entire property cost available with him or her, at the time of buying property. This is where home loans step in and bridge the gap between property seller and buyer.
    • Banks chip in to pay on behalf of property buyer in return for a particular rate of interest. The general rule is 80-20 which means that banks offer only 80% of the value of home to customers and the rest 20% is to be borne by the property buyer. This serves as a win-win situation for both banks and property buyers, since, banks are able to make profits by loaning out money while buyers are able to assimilate the entire cost of property and pay it back over a fixed period of time.
    • Home loans are eligible for certain income tax exemptions which can be used to save up on the amount of income tax that an individual pays every financial year. Under section 24 of the Income Tax Act, tax benefit can be claimed on up to Rs.1.5 lakh out of the interest component of your home loan. In case you are staying in the house bought on loan, then you can claim a maximum exemption of Rs.1 lakh on the principal amount of the home loan too.
    Home Loan

    Why to Apply for a Home Loan on BankBazaar.com?

    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:

    • Define loan parameters to receive free quotes, instantaneously, in an easy-to-understand manner.
    • Compare offers to identify the right lender to deal with.
    • Make real-time home loan comparisons to find the lowest rates in the market. At BankBazaar, interest rates are constantly monitored and updated to reflect the latest changes made by financiers.
    • Avail exclusive discounts and deals for huge savings through BankBazaar’s active collaboration with leading financial institutions and banks.
    • Check home loan eligibility online using BankBazaar’s home loan eligibility calculator and get immediate e-approvals.
    • Determine repayment amount as well as schedule using BankBazaar’s home loan EMI calculator which also provides amortization tables.
    • Browse user reviews to gain insights on service provided by various institutions.
    • Apply online for the chosen home loan product directly through the BankBazaar website.
    • Receive end to end guidance from a dedicated customer care team for smoother processing leading to quick disbursal of money.
    • Get regular status updates via emails and SMS for easy processing of your home loan.

    How to Apply for Home Loan on BankBazaar.com?

    Step 1 – As the first step, the applicant of the fill up the home loan eligibility form that is available online. This must contain all the data required to process the home loan application.

    After submission, the home loan tool checks automatically for the applicant’s eligibility and displays personalised home loan eligible options.

    Step 2 – As the second step, the user can choose to compare different home loan options offered on the page and then apply for the one that suits him/her the best.

    Step 3 – The final step in this process is receiving the immediate e-approval from Bankbazaar after successfully submitting the home loan application online.

    Home loan Interest Rates – September 2017

    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. The table below will let you examine the best floating interest rates from various banks/financial institutations in Indian according to the tenure of the home loan.Check Here: Home Loan Rate of Interest

    Home Loan Interest Rates from Top Banks as on Sept'17
    Bank Name Floating Interest Rate MCLR Rates
    SBI 8.35% - 8.70% 8.00%
    Axis Bank 8.35% - 11.75% * 8.25%
    HDFC LTD 8.35% - 8.60% * 8.15%
    ICICI Bank 8.40% - 8.85% * 8.20%
    Bank of Baroda 8.35% - 9.35% 8.35%
    DBS Bank 8.40% to 8.45% * 8.20%
    Bank of India 8.45% - 8.60% 8.30%
    Canara Bank 8.45% - 8.65% 8.45%
    Yes Bank 9.35% to 10.50% * 8.80%
    Indian Overseas Bank 8.55% to 9.05% 8.55%
    Karnataka Bank 8.60% to 8.90% 9.20%
    Oriental Bank 8.45% to 8.55% * 8.45%
    Syndicate Bank 8.60% 8.50%
    Citi Bank 8.60% to 9.10% 8.05%
    Kotak Mahindra Bank 8.50% 8.60%
    Corporation Bank 8.75% 8.75%
    United Bank of India 8.55% 8.75%
    HSBC 8.65% to 8.75% 8.05%
    Federal Bank 9.59% to 9.84% * 8.90%
    Allahabad Bank 8.75% to 9.25% 8.45%
    Central Bank of India 8.30% 8.30%
    UCO Bank 8.55% to 8.70% 8.45%

    * Customised Rates Offered Only On Bankbazaar 

    Factors that Determine Home Loan Rate of Interest

    • Prime Lending Rate (PLR): PLR is the point of reference interest rate that banks use to assess interest rates on different products. For instance, the home loan interest rate for a particular bank would be PLR + 0.5%. Assuming the PLR of the bank is 8%, the interest rate for their home loan product would be 8.50%.
    • Cash Reserve Ratio (CRR): CRR is the minimum percentage of the total deposits made by the customers that the bank has to hold as reserves. This can either be in the form of cash or as deposits with the RBI. The higher the CRR, the higher the interest rate that a customer pays. This is because the amount of liquidity in the system reduced with an increase in CRR.
    • Repo Rate: Repo Rate is the rate of interest at which the Reserve bank of India lends money to other banks. Quite naturally, the leaser the rate at which banks get their loan, the lesser the rate a customer pays. Therefore, lesser the repo rate, lesser the rate of interest for the end customers.
    • Reverse Repo Rate: This is the exact opposite of ‘Repo Rate’. This is the rate at which banks lend to the Reserve Bank of India. The banks are very happy to lend to the RBI if the Reverse Repo Rate is high. This means that the bank would gain attractive profits, which may then be passed on to customers in the form of lower interest rates.
    • Statutory Liquidity Ratio (SLR): SLR is the reserve required for commercial banks to maintain. SLR can be maintained in the form of gold, government securities, etc. Only after the SLR has been met can a bank offer credit to its customers.
    • Benchmark Prime Lending Rate (BPLR): BPLR is the rate at which a bank lends money to its customers. The RBI in place the BPLR as banks often loaned money at extremely low interest rates. With this in place, no bank can lend below the BPLR. This can visibly affect the interest rate that the bank offers a customer. Higher the BPLR, the higher the interest rate that a customer has to pay.

    How to Use Bankbazaar Home Loan EMI Calculator?

    The Home Loan EMI calculator offered by Bankbazaar is an easy-to-use tool that is available online.

    • There are two sliders in the home loan tool – Loan Amount and Tenure.
    • All you need to do is choose the desired loan amount and select the tenure of the home loan, respectively, on these sliders.
    • The minimum tenure for a home loan stands at 6 months and the maximum tenure stands at 30 years.
    • You can also choose the rate of interest and processing fee that will be associated with your home loan amount.
    • There is an option for choosing pre-payment on this tool. Choose ‘Yes’ or ‘No’ as per your needs.
    • After you enter all the required boxes, click on calculate.

    The monthly amount to be paid by you will be displayed below the ‘Calculate’ button. A pie chart is also presented along with the data for your better understanding of the home loan and the associated charges (interest and processing fee).

    How to Track Your Home Loan Application Status On BankBazaar.com?

    Bankbazaar allows you to track your home loan application easily.

    • All you need to do is go to the ‘Track Your Application Status’ page i.e /verifyOwnershipForm.html
    • Enter the Application ID.
    • Click on ‘Track Application’ and know the status of your home loan application.

    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.

    • Home Purchase 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

      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

      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 Extension/Renovation Loans

      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.

    • Home Conversion Loan

      If you have already taken a home loan for purchasing a house, but wish to shift to another house, then you can opt for a home conversion loan. It will help you in transferring the current loan to your new house.

    • Balance Transfer Home Loan

      Individuals can use the balance transfer option to transfer their home loan from one bank to another. Most people choose this option to avail better interest rates.

    • NRI Home Loan

      NRI Home Loans are specially designed for Non-Resident Indians (NRI) who wish to purchase a residential property in India. The requirements and procedure of availing this loan is different from the regular home loans.

    • Stamp Duty Loans

      Stamp Duty Loans are offered by banks to cover the stamp duty charges, which is incurred while purchasing a property.

    • Bridged Loans

      Existing homeowners who want to buy a new house can apply for a Bridged Loan, which will fund the new house. Generally, the tenure of this loan is below 2 years and it requires the borrowers to mortgage the new property with the lender until the loan is repaid.

    Purchasing a house means investing in a lifetime asset. If you are buying a house, it is plausible that you will be in need of a good home loan.

    There are several home loans available in the market today. Each of these loan come with a myriad of benefits and features. On Bankbazaar, you can compare various home loan products offered by different banks. You can also get a quote from the home loan providers and apply for a home loan on the Bankbazaar portal. Choose the product that suits your needs and requirements.

    Some of the most prominent features of home loans are outlined below.

    • Home Loans are secured advances.
    • 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.
    • Interest rates are flexible being either Fixed, Floating or a combination of fixed and floating. The Indian government has come up with the new marginal cost of funds based lending rate or MCLR which is to be used by banks to decide the rate of interest at which they can lend money to a home loan applicant. Earlier base rate used to be the rate based on which banks used to decide their lending rate. MCLR is a more flexible rate which takes into account a lot of factors like funding composition and strategies. MCLR will be reset by banks after every specific interval of time. For example, if a bank decides to reset their MCLR annually then your home loan rate will get reset after every one year.
    • Home loan interest rates are lower when compared to unsecured personal advances. Unsecured personal loans have a higher risk ratio associated to them since the bank does not have any security deposit to fall back on in case of a loan default. Hence, these loans are charged a higher rate of interest as compared to home loans which expect the borrower to deposit some kind of collateral as security.
    • The advance can be used to fund property for residential or investment purposes.
    • Whether you need a house to stay in or for investment purposes, home loan can be availed from a bank of your choice.
    • Amounts offered are higher than under other types of loans; up to 85% of the property value.
    • 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.
    • Repayments are made in EMIs (Equated Monthly Installments).
    • 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-payments are allowed, to reduce liability.
    • 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.
    • They are long-term in nature; tenors usually vary between 5 - 30 years
    • 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.
    • Non-interest charges include processing fees, pre-payment charges, inspection fees, documentation fees etc. Apart from the interest charged on home loan amount, there also are various charges that are levied while the loan sanction process is underway. These charges are communicated to loan applicants at the time of application.
    • Co-applicants/joint-applicants are allowed.
    • 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.
    • They qualify for tax benefits as per provisions of the IT Act, 1961 and hence, make for a good investment option.

    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.

    • Age: The minimum age at the time of application should be 21 years. Repayments have to be completed before the age of 60 or 65.
    • Employment: Ability to service interest charges, as reflected in the borrower’s earning capacity, is important. Borrowers should:
      • Be salaried employees or self-employed persons (professional/non-professional)
      • Have been in employment/business for at least 3 years of which current employment should account for at least 1 year.
    • Income: A minimum income varying between Rs.5 - 7 lakhs would be required. This depends on the nature of employment i.e. salaried or self-employed.
    • Residence: At least one year of stay at the current residence is required to display stability with respect to employment as well as financial. This is an indirect indicator but is taken into account by almost all banks while calculating home loan eligibility.
    • Credit Rating: A good credit score is required (a score of 750-900 from CIBIL is considered good). Besides this, a healthy financial background is vital for approval and to determine the interest rate and loan amount.
    • Parallel debt channels: While sanctioning home loan to customers, banks also look into the current credit standing of the loan applicant. If a borrower has other home loans, personal loans or car loans in-progress then the lending entity calculates the loan quantum eligibility accordingly. Banks do this to make sure that the loan applicant is able to pay the minimum monthly installment towards his/her home loan.

    Documents to be submitted differ according to the eligibility requirements. The following, however, are commonly requested for from all the applicants:

    The application form which has to be signed and affixed with the specified number and size of photographs.

    Proof of identity (Copy of Passport/Voter ID/PAN Card/Driving License).

    Proof of address (Copy of latest Electricity Bill/Telephone Bill/Property Tax Receipt/Voter ID/Passport).

    Last 6 months’ Pass Book/Bank Account Statement.

    Business proof in case of non-salaried individuals.

    Statement of Personal assets and liabilities.

    Identification of signatures from present bankers.

    Documents Requested from Guarantors:

    • Identity and address proof.
    • 2 passport sized photos.
    • Proof of business.
    • Statement of Personal assets and liabilities.
    • Identification of signatures from his/her present bankers.

    Additional Documents Requested from Salaried Applicants:

    • Salary certificate from the employer (original).
    • Copy of ITR or Form 16 for last 2 years.

    Additional Documents Requested from Non-Salaried/Self-Employed/Professionals/Other IT Assesses:

    • Copy of challans proving that Advance Income Tax has been paid.
    • Copy of ITR/Assessment Orders of 3 years.

    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
    • ICICI Bank
    • LIC Housing Finance
    • HDFC Bank
    • Axis Bank

    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.

    • Processing Fee:

      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:

      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.

    • Pre-payment charges:

      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.

    • Conversion charges:

      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:

      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.

    • Administrative Fee:

      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.

    • Statement of account:

      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.

    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.

    • Perform thorough research:

      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.

    • Learn About Interest Rates:

      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.

    • Find Out the Various Fees and Charges:

      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.

    • Check Your CIBIL Score:

      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.

    • Understand Pre-Closure Terms and Conditions:

      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.

    • Read the Fine Print Carefully:

      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.

    • Understand Your Financial Stand:

      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.

    1. When do I make my home loan application?

      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.

    2. Is visiting the lending bank compulsory to avail 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.

    3. Will the lending bank provide the entire cost of the property that I wish to buy?

      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.

    4. When does the repayment period start?

      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.

    5. Can loan repayment be made ahead of schedule?

      Yes. All banks allow pre-payment of home loans. Some banks charge a pre-payment fee for that while others do not.

    6. Do I have the right to choose between base rate and MCLR for my home loan request?

      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.

    7. How long does it take for home loan to get sanctioned?

      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.

    8. Do I get to avail tax benefits on home loan?

      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.

    9. Is taking a home loan a smart investment move?

      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.

    10. What is meant by EMI?

      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.

    11. What collateral do I need to furnish as security?

      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.

    12. Can I apply jointly for a home loan with my spouse? Will both our incomes be considered for loan quantum?

      Yes. You can apply jointly in your and your spouse’s name. Both of your incomes will be considered for determination of loan quantum.

    13. What documents do I need to submit to avail home loan in India?

      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.

    14. How can I make EMI payments against my home loan?

      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.

    15. If I deposit my property documents as security with the bank, when will I get those back?

      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.

    16. Can I avail home finance for renovation or construction of house?

      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.

    17. Can I switch from fixed to floating rate of interest and vice versa during the tenure of my home loan?

      Yes. Most banks allow switching between fixed and floating rates. However, customers may be charged a particular fee for the same.

    Home Loan Checklist:

    If you only look at rates of interest while choosing a home loan, you are doing it wrong. Learn how to apply for a home loan:

    • Processing Fee: The processing fee is a part of the home loan. If the processing fee is higher, the loan gets expensive. The idea is to avail a home loan with zero processing fee.
    • Payback: Some of the banks or lenders might not offer an option for pre-payment. Others might charge penalties for pre-payment. It is advisable that you go for a home loan that offers pre-payment and have low charges associated with it.
    • Tenure: You will be paying lower equated monthly instalments if the tenure is longer. However, do remember that you will be paying a larger amount effectively if the tenure is too long.
    • Waiting Period: Most home loans come with waiting period. It is good to choose a home loan that is associated with shorter waiting period so that you can save on the interest.

    Reasons for Home Loan Rejection

    • Builder not approved by the bank offering the loan
    • Builder has been approved but not the property
    • Rejections related to valuation
    • Defaulter tenants earlier
    • Issues with the credit history
    • Instability with employment

    How to Avoid Home Loan Rejection?

    It is clear that there can be several reasons for rejection a home loan. Maintaining a good credit score or earning a good salary is not always enough to get a home loan. The reasons mentioned above can also lead to home loan rejections. Thus, the best way to avail a home loan without any problem is by doing proper research about the property and builder. A property that has disputes or a builder that is not approved by the bank can also lead to rejection of a home loan.



    Read Home Loan news or Enjoy it on the go Google Play

    • Delay in Loan Repayment Pressurising Home Finance Companies

      Developer loans paid out by housing finance companies (HFCs) are facing a delay in repayment due to stretched balance sheets and project delays.

      The asset quality indicators of HFCs have deteriorated Q1 of FY18. The increase in gross non-performing assets from 0.84% to of gross advances as on March 31 to 1.15% as on June 30 is attributed to the deterioration.

      20th September 2017

    • New Housing Launch takes a hit from RERA’s Introduction

      It has been month and a half now since the Real Estate Regulatory Authority (RERA) is launched by Karnataka government. It was recorded that there were about 977 applicants for the registration of the project and about 273 registrations of real estate agents as of 24th August, 2017. The number is slightly disappointing as it has not reached the expectation. It is due to RERA and however we should remain silent about this as the real estate in Bengaluru is crawling up to a much organized future, which was much needed.

      According to Colliers International report, in H1 2017, with 13,400 new unit launches, Bengaluru ranked at the second place in the total residential launches in India. It was also recorded that there was a high demand from IT employees for mid-segment category. Places like Yelahanka, Devanahalli, Ranchenahalli, and Kogilu had the highest launches in the city.

      Demonetization has become the major reason for the fundamental changes in the real estate developers approach towards their business and with the introduction of RERA, they are forced to put their house in order. Colliers report also says that the residential market has dropped after the launch of RERA.

      19th September 2017

    • Simpler Financial Products Suggested by Household Finances Panel

      RBI or Reserve Bank of India constituted a household finances panel recently. The committee suggested that the households must get a range of customised, simple and innovative products with a default structure for opting out.

      This panel is being headed by Tarun Ramadorai. He is a professor if financial economics in ICBS (Imperial College Business School). Certain recommendations that are sector specific have also been put forward. The panel suggested that all the banks should use the repo rate while quoting loans instead of going for MCLR or marginal cost of funds based lending rate regime.

      6th September 2017

    • Real Estate Impacted by RERA

      In November 2016, demonetisation had affected the real estate market substantially. Further impact has been caused by the Real Estate Regulation and Development Act or RERA. The execution of Goods and Services Tax (GST) has also added to the impact.

      GST compliance and RERA will continue to stand as a challenge for most developers for at least a period of 6 months. A decline in new launches is also expected in H2 2017. However, the sales are expected to go up as the festive season is almost here. Purchasers who are planning to invest in the next couple of months should go for ready to move-in and RERA registered properties.

      28th August 2017

    • Fence Sitters Must Come Forward and Take a Call on Buying Homes After the Repo Rate Cut

      The inflation is under control and it has hit an all-time low of 1.54%. This can definitely prove to be the right time to reduce the rates of interest. The Reserve Bank of India or RBI has brought down the repo rate by 25 bps or basis points. At present, the repo rate stands at 6%.

      From the point of view of the real estate industry, a reduction in the rates by the Reserve Bank of India has a good effect on the sale of the residential properties.

      24th August 2017

    • Increase in home loan application following the 25 cut in BPS rate

      Though the 25 cut in BPS rate was expected by any banks, financing institution have noticed a significant growth in home loan applications. The rate cut has attracted many homebuyers and borrowers to take advantage of this benefit. A home loan is provided by lending institutions either under the MCLR or BPS rate system. The MCLR is comparatively a recent system that is reviewed on a monthly basis, however BPS rate calculation is carried on a quarterly basis based on various factors. The drop in BPS rate is sought my home loan applicants since it affects the interest rates and reduces the overall cost for the home or plot.

      16th August 2017

    • Banks being Forced By the Reserve Bank of India to Offer Cheaper Loans

      Governor of the Reserve Bank of India has stated that the repo rate has been brought by 25 basis points. Currently, the repo rate of the Reserve Bank of India stands at 6%. This is not the only good news right now. The Reserve Bank of India understands that various banks are not completely offering the rate cuts to their customers. A new benchmark (market linked) is being considered for making base rates more responsive.

      Since January 2015, the policy rates are down by approximately 2%. However, the banks only passed on less than a percent to their customers. In April 2015, the home loan rates offered by State Bank of India went down to 8.4% from 9.85%. The new customers can avail the lower rates of interest but the existing customers have still not been able to get out of the 9% slab.

      8th August 2017

    • Repo rate cut by Reserve Bank of India

      The Reserve Bank of India was brought down then repo rate by 0.25%. Individuals who have home loans will be able to avail the decline in equated monthly instalments. However, the benefit will only be felt when the reset date for the loan comes up.

      The MCLR or marginal cost of funds based lending rate is just a part of the story. The spread that the banks can choose to levy on top of MCLR also affect the interest outgo of the borrowers. The actual home loan might be equal to the MCLR or have a spread or markup. It cannot be lower than the marginal cost of funds based lending rate. Despite marginal cost of funds based lending rate’s expected reduction, borrowers should look at various other factors while going for a loan. These factors are prepayment conditions, reset period, foreclosure, etc.

      7th August 2017

    • Buying Small Homes Gets Easier than Renting

      Stagnant prices of property and lower rates of interest combined with interest subsidy under PMAY (Pradhan Mantri Awas Yojana), have substantially helped in the improvement of the economics for the home purchasers. The rates of interest has gone below 200 bps or basis points in the past fifteen months. For some properties, the rent is higher than the EMIs, at present.

      As per bankers, for a housing loan of Rs.25 lakh, the real rate of interest for a home purchase with an annual income between Rs.12 lakh and Rs.18 lakh stands at 4%. The current rate of interest on housing loans is 8.5% to 9%. However, after calculation of interest subsidy under Pradhan Mantri Awas Yojana and Tax Benefits, the actual rate goes down to 4%. Subsidy is higher when the income is lower.

      4th August 2017

    • Bank’s PAN details are essential for tax benefits on home loans

      PAN is an important document to take advantage of the tax benefits available on home loans. In order to be eligible for tax benefits, salaried individuals are required to obtain and furnish the bank’s PAN number. Though it might turn out to be a difficult task, an individual can get in touch with their bank (home loan lender) to obtain the PAN number. The tax benefits are available on the principal repaid and also on the interest paid towards the home loan. The taxpayer is required to furnish the name, address, and PAN of the lender in order to carry out the tax benefit formalities.

      21st July 2017


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