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Best Home Loans in India

Best Home Loans in India

Last Updated : March 28, 2022, 1 p.m.

How do you define a home? A home is a place where the times spent today become beautiful memories that are cherished forever. But, how many people are able to buy a home without a loan? Not many and that’s fine. We are living in a time when dreams are expensive and when you have top lenders offering home loans at a rate within your budget, everything seems sorted.

Compare Best Home Loans at Lowest Interest Rates in India April 2024

List of BanksHome Loan Interest Rates
Allahabad Bank8.75% - 9.90%
Andhra Bank8.60% - 11.20%
Axis Bank8.75% - 9.15%
Bandhan Bank8.65% - 13.00%
Bank of Baroda8.50% - 10.60%
Bank of India8.85% onwards
Bank of Maharashtra8.60% - 10.80%
Canara Bank8.85% - 11.25%
Central Bank of India8.55% - 9.10%
Citibank8.45% Onwards
Corporation Bank8.60% - 11.20%
Dena Bank8.50% - 10.60%
Federal Bank10.15% - 10.30%
HSBC8.75% - 9.10%
ICICI Bank9.00% - 10.05%
IDBI Bank8.80% - 12.25%
IDFC First Bank8.85% - 9.25%
IndusInd Bank8.40% - 9.75%
Jammu & Kashmir Bank9.10% Onwards
Karnataka Bank9.08% - 10.35%
Karur Vysya Bank9.23% - 12.13%
Kotak Mahindra Bank8.70% onwards
Lakshmi Vilas Bank8.25% Onwards
Nainital Bank10.50% Onwards
Oriental Bank of Commerce8.60% - 9.95%
Punjab & Sind Bank8.85% - 9.95%
RBL Bank9.10% - 11.55%
State Bank of India (SBI)9.15% - 11.30%
Standard Chartered BankStarting at 8.65%*
Syndicate Bank8.85% - 11.25%
UCO Bank8.85% - 10.40%
United Bank of India8.60% - 9.95%
Vijaya Bank8.50% - 10.60%
YES BANK9.15% - 11.25%

Compare Housing Loan Interest Rates at NBFCs in India April 2024

List of NBFCsHousing Loan Interest Rates
SMFG India9.50% - 10.50%
HDFC Limited8.50% - 9.40%
Indiabulls Housing Finance9.30% Onwards
LIC Housing Finance (LIC HFL)8.50% - 10.75%
PNB Housing Finance (PNBHFL)8.50% - 11.95%
Reliance Home Finance9.75% - 13.00%
Tata Capital8.95% - 12.00%
Piramal Capital & Housing Finance (PCHF)10.50% Onwards

But the best home loan is not restricted to just the interest rate. There are many aspects you need to consider before zeroing on the best home loan. So, without wasting any time, let’s check out all such aspects –

  • Minimum processing fee
  • Flexible & extended repayment options
  • Scope for increased home loan eligibility
  • Minimum Fee on rate conversion
  • Relaxed norms on part or full prepayment
  • Special Offers, if any

Let’s talk about each of them individually.

Why Is Processing Fee an Important Criteria While Evaluating a Home Loan?

The processing fee is the one-time fee you pay to the lender. As the home loan amounts remain much higher, with the average home loan size being INR 30-40 lakh, the processing fee even at the rate of 0.25%-1% can be a significant amount to pay. The processing fee may or may not include the legal and technical fees , so it depends pretty much on the lender. If the processing fee is not inclusive of legal and technical charges, you should check your savings and see whether you can pay that or not. To make it easy for you, lenders can give you the option of including the processing fee and legal & technical fee (if not included in the former) in the loan amount. That will enhance your EMI and interest outgo than normal. So, like interest rates, you should compare the processing fee of different lenders too.

List of Banks/NBFCsProcessing Fees
Allahabad BankUp to 0.40% of the loan amount to a max INR 50,000
Andhra Bank0.50 % of loan amount subject to maximum of INR 10,000 + GST
Axis BankUp to 1% of the Loan amount subject to minimum of INR 10,000
Upfront processing fee of INR 2,500 + GST
Bandhan Bank1% of Loan Amount , Min INR 5,000 + GST
Bank of BarodaUp to 0.50% of the loan amount or a maximum of INR 7,500 + GST
Bank of India0.25% of the loan amount + GST
Bank of MaharashtraAs applicable
Canara Bank0.5% of the loan amount + GST
Central Bank of India0.50% of the loan amount subject to maximum INR 20,000 + GST
CitibankUp to 0.40% of the loan amount + GST
Corporation Bank0.50% of loan amount. Max INR 50,000 + GST
Dena BankAs applicable
Federal Bank0.50% of the loan amount to a maximum of INR 7,500 + GST
SMFG India3% of the loan amount + GST
HDFC LimitedUp to 0.50% of the loan amount or INR 3,000 whichever is higher, plus applicable taxes.
HSBC1% of the loan amount + GST
ICICI BankUp to 1.00% of the loan amount + GST
IDBI Bank0.50% of loan amount to a maximum of INR 2,500 + GST
IDFC First BankUpto INR 10,000 + GST
IndusInd BankINR 10,000 + GST
Indiabulls Housing Finance0.50% of the loan amount to a maximum of INR 15,000 + GST
Jammu & Kashmir Bank0.25% of the loan amount to a maximum of INR 10,000 + GST
Karnataka Bank0.50% of the loan amount + GST
Karur Vysya BankUp to INR 7,500 + GST
Kotak Mahindra BankZero processing fee for online application. (Upto 1.25% of Loan amount for offline application)
LIC Housing Finance (LIC HFL)
  • Loan Amount Upto INR 50 Lakh: - NIL
  • Loan Amount More than INR 50 Lakh to Upto INR 1 Crore - 50% of 0.25% of the loan amount + GST or 50% of INR 10,000 + GST, whichever is lower
  • Loans more than INR 1 Cr to Upto INR 5 Cr - 50% of INR 25000 + GST
Lakshmi Vilas BankAs applicable
Nainital BankAs applicable
Oriental Bank of Commerce0.50% of the loan amount to a maximum of INR 20,000/- + GST
Punjab National Bank (PNB)0.35% of the loan amount, subject to a minimum and maximum of INR 2,500 and INR 15,000 respectively
PNB Housing Finance (PNBHFL)INR 10,000 + GST
Punjab & Sind BankUp to 0.25% of the loan amount to a maximum of INR 15,000 + GST
Reliance Home FinanceUp to 0.75% of the loan amount + GST
RBL BankINR 5,000 - INR 15,000 of the loan amount + GST
State Bank of India (SBI)0.35 % of loan amount and maximum INR 10,000 +GST
Standard Chartered BankINR 10,000 + GST
Syndicate Bank0.125% of loan amount or a maximum of INR 5,000 + GST
Tata CapitalAs applicable
UCO Bank0.5% of the loan amount, to a maximum INR 15,000/- + GST
United Bank of IndiaAs applicable
Vijaya BankINR 4,000 + GST
YES BANK0.5% of the loan amount or a maximum of INR 10,000 + GST

Flexible & Extended Repayment Options

Home loan interest rates and processing fees are vital and so is repayment. Yes, the maximum time you can get to pay the loan is 30 years. But all that is subject to your age. While some lenders keep the loan running for the time you attain the age of retirement i.e. 60 years, others keep it for the time you become 70 years old.

Scope for Increased Home Loan Eligibility

The home loan quantum is dependent on your income and repayment capacity, besides the value of the property you are looking to buy. In case the home loan eligibility comes less based on your income and repayment capacity, you might struggle to buy a home on your own. So, if you can add an earning co-applicant, the loan eligibility will enhance and boost your chances of buying a dream home.So, which lender is offering you the maximum based on your as well as the co-applicant’s income? Check that and decide accordingly.

Fee Payable on Rate Conversion

As you would know the home loan is basically offered on a floating rate. But some borrowers are servicing the loan at a fixed rate basis too. Fixed rates can be 3%-4% above the floating rate and can make you pay more by the time the loan wraps up. You need to check the lender that charges less on converting the fixed rate into a floating rate. If we come to the floating rate system, housing loan interest rates are benchmarked to base rate, MCLR and RLLR.

RLLR-based home loans have followed the policy rate changes by the RBI in the same proportion. Now, as the RBI is on a rate cut spree by slashing the repo rate by 100 basis points from October 2019 (including the massive 75 basis point cut made by it on March 27, 2020), the RLLR-linked loans have fallen by 100 basis points i.e. 1%. This makes it the cheapest of the three. If you speak of the MCLR-based loans, the rate has come down to the tune of around 60% to the policy rate changes. Base rate reductions are even lower. But the RLLR-based home loans are the newest, so many of you may be servicing home loans under MCLR and base rate. So, if you wish to convert that into RLLR and enjoy the benefits of lower interest rates, check the fee that your lender is charging. If that is higher than what prevails in the market, you can think of a home loan balance transfer to the lender that is charging less.

Check Prepayment Norms Carefully

People do prepayment either in full or parts to reduce the interest obligations. Usually, floating rate loans don’t come with charges on part prepayment. But there could be some lenders which will charge on part payment of a floating loan too. If you happen to be servicing your loan there, the joy of part payment could reduce to a degree. But, if you are yet to take a home loan, read the terms and conditions pertaining to part payment and act accordingly. Full prepayment comes with no charges if you do it from your own resources. But if you do via a balance transfer, lenders can deduct applicable charges. Fixed rate loans, on the other hand, have charges on both part and full prepayment doesn’t matter if you do from your own sources or via a balance transfer.

Special Offers

Check for special offers on home loan interest rates and processing fees if you are about to take a home loan. Lower interest rates can be the case if you already hold a relationship with the lender you are looking to take a loan from. Also, if you are working in a reputed MNC or any top rated firm, you can get special rates on your home loans. There could be processing fee waivers too. But that will be for a limited period.

See Which Lender Can Offer You the Best Home Loan Rate Based on Your Good Credit Score

A credit score may not hold relevance as far as getting the approval for a home loan is concerned, but it does influence the interest rate of this loan type. If you have a good credit score of 750 and above, the interest rate will be quite low and help keep the EMIs lower. Top lenders, including SBI, ICICI Bank, HDFC Limited and LIC Housing Finance, are offering home loans at lower interest rates to individuals having a good credit score. However, the score criterion for the lowest rate changes from one lender to another. Click on Home Loan Interest Rates based on Credit Scores to know more about it.

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