A "low interest" loan shouldn't mean you have very little interest in paying it back!
Hyderabad is one of the larger cities in India and it has a population of about 69 lakh people. Naturally, considering the number of people living in the city, demand for housing is high. Reports indicate that along with the increase in the demand for houses, there has also been a shift towards larger houses in general. The average house size that the people prefer in the city appears to be over 1,700 square feet as opposed to demands for smaller spaces in preceding years.
With increases in demand for housing and space requirements, the price of houses has also, quite naturally, increased. There is a report that indicates that the city has seen a close to 30% increase in housing prices. This necessitates a need for home loans. There are a number of financial institutions, both banks and non-banking financial companies that offer home loans in Hyderabad. These institutions are listed here.
There are a number of banks and NBFCs in Hyderabad that offer home loans for those wishing to avail them for reasons ranging from the purchase of a home to purchase of land or renovation of an existing house. The lowest home loan interest rates in Hyderabad starts at 8.40% p.a.
| Banks | Interest Rate (p.a.) |
| Union Bank of India | 8.70% |
| Central Bank of India | 8.35% p.a. to 9.35% p.a. |
| State Bank of India | 9.15% |
| HDFC LTD | 8.60% |
| LIC Housing Finance | 8.45% |
| Bank of Baroda | 8.60% |
In order to be eligible for a home loan, there are some criteria that have to be fulfilled. These criteria are mostly common across all providers with minor changes being applicable. For instance, some may allow people as young as 18 years of age to avail a loan while some may require a minimum eligibility age of 21 years. The following table gives the generic eligibility criteria to avail such a loan:
| Eligibility Criteria | Requirement |
|---|---|
| Minimum and maximum age | Minimum age: 18 Maximum age: 70 |
| Net annual income | Depending on the type of employment, a minimum of Rs.5 lakh is required |
| Employment | Can be an employee of a company or self-employed |
| Residence | Own residence or rented residence but should have resided in the same place for at least one year prior to the loan application |
| Credit score/rating | A good credit rating is required and this should be obtained from a recognized credit bureau |
One thing to note while availing a loan is that the bank or NBFC will not provide the applicant with the full amount required to finance the purchase or renovation. Instead, the institution will typically finance about 70–80% of the total amount required.
In order to avail any home loan, a person has to provide documentation to support their application. The following documentation is generally required:
| Type of Documentation | Purpose | Permitted documents |
|---|---|---|
| Identity proof | This is to serve as a photo ID and for proof of address |
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| Income proof | This is serve as proof of income to indicate that there is a supply to repay the loan |
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| Loan application form | To serve as a request for a loan application |
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| Other documents | To serve as additional proof for the institution granting the loan |
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There are a number of different types of home loans available and some of the most popular ones are given in the following table:
| Home Loan type/purpose | Details |
|---|---|
| Loan for new or pre-owned property | Can be availed by a person who wishes to buy a new or pre-owned property. This is the most commonly availed loan type. The interest rates can be either fixed or floating. |
| Loan for construction of property | Can be availed by a person in the event that they wish to construct a house instead of buying an already constructed one. The cost of the plot of land used will also factor into the loan approval process. |
| Loan for property expansion | Can be availed by a person who wishes to increase the size of their property. |
| Loan for home improvement/renovation | Can be availed by a person who wishes to modify or renovate their house. |
| Loan for NRIs | Can be availed by non-resident Indians in order to purchase property within India. |
There are other facilities like home conversion loans and home loan balance transfers that can also be availed by a home loan applicant. Home conversion loans can be availed when a person has already made use of a loan to buy a property and wishes to avail another loan. Home loan balance transfers allow a person to move their loan from one financial institution to another in order to take advantage of benefits offered by the second financial institution.
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