A "low interest" loan shouldn't mean you have very little interest in paying it back!
Apply for a home loan of up to Rs.20 crore on BankBazaar with interest rates starting at 8.25% p.a. As a one-stop solution to your property loan needs, BankBazaar offers simple documentation procedures, quick processing, customised repayment schemes, and dedicated customer service with a response time of 30 to 45 minutes.
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| Interest Rate | Min. 8.25% - Max. 22.00% |
| Processing fees | Upto 3.00% |
| Loan Amount | Min. 1L to Max. 20 Crs |
| Loan Tenure | Min. 1 Year to Max. 30 Years |
| Partial pre-payment Charges | Nil |
| Pre-closure Charges | Nil |
| Compare Home Loan Interest Rates with other banks >> | |
BankBazaar brings you a simplified way of applying for housing finance of your choice online.
Follow the below 6 steps for a hassle-free experience:
Here’s what happens after you apply for a loan on BankBazaar:
As India’s leading online portal for financial services, applying for your housing loan through BankBazaar can benefit you in many ways. Take a look at some of them:
BankBazaar helps you track your property loan application easily. Simply click here, enter your Application ID and your mobile number, and get the status.
Banks in India provide different types of housing finance options for different purposes. Here’s a list of the prominent types of housing loans in India, based on a study of products offered by some of the top banks:
Buying a house is one of the most important financial decisions of your life. There are a host of things you need to be careful about before choosing a housing loan package. Here are some of the significant points to keep in mind when looking for housing finance:
You are never given the full value of your property as loan by a bank or NBFC (Non-Banking Financial Company). The maximum loan amount you’ll be given for a house purchase is known as the Loan-to-Value Ratio. LTV, therefore, is the ratio of the amount you can borrow against the value of the house. LTV is usually represented as a percentage of the total value of the house.
For example, if your house costs Rs.50 lakh, and your lender says the LTV is 80%, then the loan sanctioned to you will not exceed Rs.40 lakh. You will have to put in the remaining money as down payment from your own sources. LTV may include GST charges, but may exclude stamp duty and registration fees.
The LTV ratio is important for both the lenders and borrowers. For banks, a higher LTV means a greater risk in lending, because they may not be able to recover the loan amount in case of default on the loan or fall in value of the property. Therefore, a higher LTV might lead to a higher interest rate.
For borrowers, the LTV ratio determines how much money will have to paid as down payment out of their own pockets.
While most banks give an LTV of 70% to 80%, some banks/NBFCs may also give you up to 90% of the house value.
If you’re looking for a higher LTV, you could try negotiating with the bank/NBFC. Having a healthy prior relationship with the bank, a high credit score, or a high income are factors that may help you in this negotiation.
Home loan interest rates are dependent on a number of economic factors as well as customer-specific factors. Let’s first look at how banks determine the interest rate to offer to you:
Now, here are the economic factors that affect the rates advertised by the bank:
Interest rates are just one type of extra payment you have to give the bank. There are several other fees and charges applicable to property loans of different banks. Each bank may have their own charges and range of the fees levied. The main fees sought by Indian banks and NBFCs on property loans are:
Here are some of the reasons why a property loan could be rejected in India:
Haven’t found your reason here? Here are some more detailed reasons for home loan rejection.
To increase your chances of getting your housing loan approved, here are some things you can do:
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.
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.
With the buying of bad loans of beleaguered Jayaswal Neco Industries Limited by a group of investors led by Bank of America, the US bank has sealed its biggest deal in the country’s stressed assets segment. The group of investors of which the investment banking giant is a part has paid around Rs.3, 300 crore to acquire 88 percent of Chennai-based Jayaswal Neco’s debt.
With the acquisition, the bank is diving deeper into the growing distressed asset pile in the country. The US bank already has investments in the segment with SevenHills Hospital and telecom tower firm GTL Infrastructure Limited figuring in the list.
It needs to be mentioned here that the investments have been made via domestic asset reconstruction company Assets Care & Reconstruction Enterprise (ACRE). The bank will pay ACRE a commission to facilitate the deal given the fact that RBI regulations allow only asset reconstruction firms and domestic financial institutions to buy loans or debt from banks.
The bad loans were purchased from lenders led by the country’s largest public lender i.e., State Bank of India (SBI). Other banks which have offloaded their loan exposure to ACRE were Bank of Baroda, Bank of India, Central Bank of India and IDBI Bank.
22 March 2019
Despite the Reserve Bank of India having lowered the repo rate by 25 basis points (bps) to 6.25% from the 6.50% earlier in its bi-monthly monetary policy review meeting last month, commercial banks haven’t completely transmitted the interest rates cut to its customers yet. This may force RBI to loosen its monetary policy furthermore to provide support to the economic growth of the country. The increasing gap between credit growth and deposit growth coupled with the government’s competition for small savings limit the banks from transmitting the interest rate cuts completely. Shaktikanta Das the RBI governor, has met with bank chiefs regarding the monetary policy transmission and urged them to lower their lending rates. Once the transmission of RBI’s key rates to borrowers is complete, home loan borrowers will able to avail of benefits of cheaper home loans at reduced interest rates. However, according to some bank chiefs, the transmission will only be able to be accelerated if the repo rates are reduced to a great extent to have an impact on the banks’ lending rates.
21 March 2019
As per the data released by Reserve Bank of India (RBI), the credit growth of private banks in the third quarter of the current fiscal was at 22 percent year-on-year. This is the fifth consecutive quarter when the credit growth has remained over 20 percent.
Non-food credit or loans to individuals and companies grew 14.5% year-on-year during the fortnight ended March 1. It was marginally faster than what was reported in the previous fortnight.
While the credit growth of private banks was on the upward curve, the credit growth of the public sector banks remained subdued at 8.4% year-on-year.
It needs to be mentioned here that credit growth has managed to recover from record lows over the past few quarters with the banking system slowly but steadily getting out of the impact of demonetisation and a majority of lenders focusing on retail lending.
As per the provisional data released by the central bank, outstanding loans to companies and individuals as of March 1 stood at 94.73 lakh crore. The net corporate bonds outstanding and the net outstanding on commercial papers as of 31 December 2018 stood at 29.48 lakh crore and 4.98 lakh crore. Taken together with loans, consolidated credit outstanding in the system stood at 129.42 lakh crore as of March 1
It is noteworthy to mention here that bank credit in the country is expected to grow at 13 to 14 percent on an average between FY19 and FY20.
21 March 2019
Vinay Sah, the Managing Director and CEO of LIC Housing Finance has stated that there is some revival in the housing sector. He stated that the growth rates are improving, and the company is expecting good business in Q4. Sah added that they were looking to end the year with a growth rate of around 14-15 percent.
Talking about affordable housing, the CEO of LIC Housing Finance stated that till February the company has done about 31,000 loans, which constitutes about 20 per cent of the total sales. With regard to general home demand, he said that the growth rate was about 7-8 per cent.
He was hopeful that the growth rates would pick up for the sector as a whole in the upcoming days and not just for LIC Housing Finance.
20 March 2019
Till January, Non-banking Finance Companies (NBFC) dependence on bank credit has grown massively as per the data released by Reserve Bank of India. The growth which was 48 percent year-on-year reflects a shift in focus from money markets to banks for funds during tighter liquidity condition. This is the highest growth in any loan segment reported by banks.
The data released by the central bank shows that personal loans to buy consumer durables suffered a 75 percent drop while credit to manufacturing fell 0.7 percent. Overall bank lending, however, grew by 14.6 percent year-on-year.
CARE Ratings, in a report said that with the recent liquidity issues increasing the cost of raising funds for NBFCs, they have been prompted to shift from the corporate bond market to banks for their financing needs.
The agency in the report mentioned that as of January 18, bank loans to NBFCs stood at Rs.5, 57,600 crore. The report also highlighted that there was an increase in borrowing costs across all categories apart from housing finance companies during the month of February with regard to January. This was accounted to the 10-year average G-sec yields, which has remained more or less unchanged at best. It is noteworthy to mention here that as per the agency the 10-year average G-sec yields rose to 7.37 percent in February from 7.35 percent.
20 March 2019
As per Section 24B and 80C of the Income Tax Act, taxpayers can avail deduction on their home loan repayments. While taxpayers can claim tax benefits for the interest payment on the home loan products such as home purchase/construction loans and home repair/renovation loans under Section 24B of the IT Act, Section 80C allows tax deductions on the principal payment of the housing loans utilized for the purchase/construction of the house/property. However, the benefits can be claimed only if the home loan being availed is utilized for the above mentioned purposes irrespective of the type of loan, i.e., a new home loan or a top-up loan. Furthermore, as per the IT Act, only the interest on the top loan taken is eligible for tax deduction under Section 24B and no additional benefits can be availed for a home loan transfer though the Act has not defined the number of times a home loan can be transferred.
19 March 2019
Indian overseas Bank, the state-owned loan lender, has reportedly reduced its marginal cost of funds based lending rates across various loan tenures. The one-month and overnight MCLR were however left unchanged. The new MCLR rate will be effective from 10 March 2019. The MCLR for one year tenure has been reduced by 10 basis points to 8.70% from the 8.80% earlier. Retails loans such as home loans and vehicle loans are benchmarked against the one-year MCLR. The two-year MCLR and three-year MCLR rates were also lowered by 10 basis points (bps) each to 8.80% and 8.90% respectively. The six-month MCLR which was recorded at 8.60% earlier has also been reduced to 8.50%. In the same line, the marginal cost of funds based lending rate (MCLR) for three-month tenors was lowered by 5 bps to 8.45% from the 8.50% set earlier.
18 March 2019
According to reports, many banks have reportedly begun revising the marginal cost of funds based lending rates (MCLR) after the Reserve Bank of India (RBI) announced its decision to cut down its key repo rates by 25 basis points in its bi-monthly monetary policy review meeting held in February. Though many banks have already lowered their lending rates this month, the RBI is expected to cut down on its repo rates again in the following months, especially the monetary policy review to be held on 04 April 2019. With banks lowering their MCLR, more and more home loan borrowers are being tempted to transfer their existing home loan to another lender for comparatively lower interest rates. Financial experts believe that it would not be wise decision to switch home loans for such minimal change. One of the reasons being poor rate transmission, where banks have only slashed their MLCR by 5-10 bps despite the RBI having cut repo rates by over 25 bps. Hence, existing home loan borrowers are advised to wait for further repo rate cuts to show any impact with their home loan balance transfer.
15 March 2019
With all the major banks such as Bank of Baroda, Punjab National Bank, Allahabad Bank, Kotak Mahindra and Union Bank of Bank of India all lowering the MCLR rates, the loan EMIs are set to decline in the coming months. The banks have reduced the MCLR rates after the RBI indicated them to do so. India’s largest bank, State Bak of India has reduced the home loan rate by 5 basis points for loans having principal amount up to Rs.30 lakh. On Tuesday, another major financial institution in the country in the form of Bank of Baroda reduced the MCLR rates by 0.1 percent. The changes have been in effect since March 7.
Punjab National Bank is another major financial institution to have decreased the MCLR rates. For the term of period of one year, the MCLR rates have been slashed from 8.55% to 8.45%. For the term period of three years, the rates have been reduced to 8.65%. Union Bank of India has also reduced the MCLR rates for a year’s tenure from 8.705 to 8.60%. Among banks that belong to the private sector, Kotak Mahindra has reduced the rates by 5 basis points bringing it down to 9%.
The reduction in rates comes after RBOI reduced the repo rate by 25 basis points to 6.25%. After meetings were held between RBI and all the major banks in the country, the rates have been reduced.
12 March 2019
State-owned Bank of Baroda (BoB) reduced benchmark lending rate by 0.1% points on Tuesday. The move could make loans such as home, auto and others cheaper. The bank has cut the lending rate by 10 basis points across all tenors up to 1 year. In a regulatory filing, the bank said that the new rates are effective from 7 March 2019. For overnight and one-month tenors, the Marginal Cost of Funds Based Lending Rate (MCLR) would be 8.25% and 8.30%, respectively. The MCLR for 1-year tenor was cut to 8.65% from 8.75%. Usually, most of the retail loans are benchmarked against 1-year MCLR. BoB’s lending rate cut comes a month after the Reserve Bank of India (RBI) reduced key lending rate by 0.25% points to 6.25% amid expectation of inflation remaining within its target range. Banks have been slow to pass on the RBI cuts to borrowers saying higher credit cost due to the high NPA.
11 March 2019
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