Banks and other financial institutions offer home loans for the purchase of the property. You can also buy/construct/renovate/extend your house with this money and repay it gradually within the chosen time period. Home loans are secured against the property, and if you fail to repay, the lender can take over the property from you and sell it to recover the dues.
The eligibility for a home loan depends on an applicant's income, credit history, property value and location. Based on these factors, the maximum loan amount is calculated.
|List of Banks/NBFCs||Home Loan Interest Rate||Processing Fee|
|State Bank of India (SBI)||6.70%-6.90%|
|LIC Housing Finance (LIC HFL)||6.66% - 7.90%|
For loan amount below INR 1 Crore - 0.25% of the loan amount + AT or INR 10,000 + AT. whichever is lower
Loan Amount Above INR 1 Crore to Up to INR 15 Crore - INR 20,000 + AT
|HDFC Ltd||6.70% - 8.00%|
Salaried & Self-employed Professionals - INR 3,000, + Taxes
Self-employed Non-professionals - INR 5,000 + Taxes
Self-employed non-professionals - Up to 1.50% of the loan amount or INR 4,500, whichever is higher, + GST
|PNB Housing Finance Ltd (PNBHFL)||7.20% - 8.90%||INR 10,000 + GST|
6.70% - 7.55%
|INR 3,000 + GST|
|India Shelter Finance Corporation||12.99%-18%||2%-3% of the loan amount (Including GST)|
|Axis Bank||7.75% - 8.55%||Up to 1.00% of the Loan amount subject to minimum of INR 10,000 + GST|
|Bank of Baroda||6.75% - 8.25%||Upto 0.50% of the loan amount or Max INR 7,500 + GST|
|Bank of India||6.85% - 8.35%||0.25% of the loan amount, subject to a minimum and maximum of INR 1,500 and INR 20,000, respectively|
|Citibank||6.65%-7.40%||Up to 0.40% of the loan amount + GST|
|IDBI Bank||6.95% - 10.05%||Up to INR 5,000 + GST|
For inward BT irrespective of the amount & PMAY proposals – Nil
|Kotak Mahindra Bank||6.60% - 7.20%||Zero processing fee for online application and Upto 1.25% of Loan amount for offline applications|
|Piramal Capital & Housing Finance (PCHF)||9.65% Onwards||0.10% - 0.25% of the loan amount + GST|
|Punjab National Bank (PNB)||7.00% - 7.60%||0.35% of the loan amount, subject to a minimum and maximum of INR 2,500 and INR 15,000, respectively|
|Tata Capital||9.25% Onwards||0.50% of the loan amount + GST|
HDFC Home Loan Interest Rate at 6.70%* onwards. All loans are at the sole discretion of HDFC Limited
Note - Please note that there are different types of charges which a borrower has to pay upfront. These charges are not negotiable and processing/application fee is one of them. So, do check all these details before applying for the loan.
Grab the lowest rate deal to ensure a greater reduction of the home loan EMI.
Compare Banks by their Interest Rates
Compare Banks by their Interest Rates
Wish Experts guide you through the process of selecting a home loan with lowest interest rate as per your eligibility. The process is much simpler as compared to visiting different lenders offline.
Steps to follow to apply for a home loan
You need to provide the following details in the form given at the top of this page:
After the submission of the form, another form appears where you have to mention property details such as property value, applicant's gender, residence address, PAN number, and then click on 'Get Quotes'. Subsequently, you'll get a list of banks where you are eligible for a home loan.
Wishfin has partnered with WhatsApp to enable consumers to apply for a home loan on WhatsApp. This is the first ever facility where a consumer can apply for a loan on WhatsApp just like chatting with your friends. You just need to answer a few basic questions and the chatbot will show you a list of options. The simplicity of the process makes it for a pleasant user experience.
Check out below the different types of housing loans that banks & NBFCs to individuals in India.
Home loan eligibility is based on income, age, credit score, property value and location, etc. The table shows general eligibility criteria at all banks/NBFCs.
|Age||Should be between 21-60 years||Must be between 21-65 years|
|Income||Minimum income of INR 1,80,000 p.a.||Minimum income of INR 1,80,000 p.a.|
|Current Experience||2-3 years of current job stability||3 years of current business stability|
|CIBIL Score||720 or above||720 or above|
You can also check your home loan eligibility to know the maximum loan amount you are eligible for. This will only help you plan your purchase better. Your income, CIBIL score, age and professional stability, property location are very important. Lenders demand a CIBIL score of 720 or above with the property in an authorized location. However, if you have a genuine reason for your credit score to be lower than 720, some NBFCs can consider your application, but will approve the loan at a higher rate of interest.
How much loan amount can you get based on your salary?
Lenders calculate the maximum loan amount eligibility based on your salary. Only 50% of your net take home salary is considered for calculating the eligibility which means you can get a higher loan amount if your salary is high. The existing loan EMIs, if any, can also impact your home loan eligibility. If a home loan applicant is already paying an EMI, that will be deducted from the 50% of the salary and the remaining amount would decide your maximum loan amount eligibility.
Lenders calculate Fixed Obligations to Income Ratio (FOIR) based on your existing EMIs and net monthly income. The percentage of FOIR should be 75% or less. For instance, if your in-hand salary per month is INR 1,00,000 and you are currently paying a car loan EMI of INR 6000 and personal loan EMI of INR 10,000 and you want to know how much loan amount you can get for a home loan, your FOIR would be:
Your disposable income for a new loan is: INR 50,000 - INR 6,000 - INR 10,000 = INR 34,000
FOIR = Sum of existing obligations/Net take home salary*100
= ((INR 6000 + INR 10,000)/ INR 1,00,000) * 100
= (INR 16,000/ INR 1,00,000)*100
So, lenders will approve the loan amount having monthly installment of INR 34,000 or less even for the longest tenure. Other factors such as your credit score help you fetch a better deal from the lender.
Loans made pocket friendly
Choose your desired EMI first... then identify the loan that fits your pocket!
A home loan is not financed to the extent of the property cost. So, as a borrower, you should be fully aware of the loan you are likely to get for the property you wish to buy. Most lenders, especially banks follow the loan to value (LTV) ratio as shown below.
|Upto INR 30 Lakh||Upto 90% of the property cost|
|Above INR 30 Lakh - 75 Lakh||Upto 80% of the property cost|
|Above INR 75 Lakh||Upto 75% of the property cost|
You shall check the home loan EMI calculator in advance to get an idea of the monthly installment amount applicable. The calculator computes the EMI based on the loan amount, interest rate and tenure. The calculator is available online to make it easy for you. Just enter these three variables at their respective space in the calculator and see the EMI flashing on the screen. You will even get to see the total interest payable to the lender over the loan tenure you opt for.
The documents required to apply for a housing loan are a bit different for salaried and self-employed applicants. Below are the documents you need to submit along with loan application form:
Please note that income proof is the most important document to get a home loan approval. If you do not get your salary in a bank account, you can not apply for a home loan. Only a few NBFCs will consider your application. But they will most likely approve the loan at a higher rate of interest. Recently, the Union Cabinet declared 10 per cent reservation for economically weaker upper castes recently and now ministry might bring in another surprise for the middle class people of India. The finance ministry might increase the tax exemption limit under Section 80C of the Income Tax Act.
Home loans are available at almost all top banks/NBFCs , so choosing one might be a little time-taking. Wishfin helps you in selecting the best lender based on your requirements. Here are the reasons to choose Wishfin:
Here's a list of questions that people ask with respect to home loans.
The Equated Monthly Installment (EMI) would most likely remain unaffected with the change in home loan interest rates. The change in rates would, however, ensure a change in the proportion of interest and principal over the years. If the lender raises the interest rate, the interest portion of the EMI will increase. The principal portion would decrease in such a case. When the lender cuts the rate, the interest portion will come down. The principal portion of the EMI would increase. Apply Home Loan Now
Since October 2019, banks have started following the external benchmark i.e. Repo-linked Lending Rate (RLLR) to price floating rate home loans. So, whenever the Reserve Bank of India (RBI) makes a change to the Repo Rate, the rate at which the central bank lends to commercial banks, there will be a change in the home loan rate in the same proportion. A spread will be charged over the external benchmark rate and will remain fixed throughout the loan tenure unless the credit profile of the borrowers undergoes a substantial change. Since October 2019, the RBI has slashed the repo rate by as much as 140 basis points (1.40%), including the latest 40 basis point reduction on May 22, 2020.
Before 2019, banks used to offer floating home loans on the basis of the Marginal Cost of Lending Rate (MCLR), a loan pricing mechanism that was introduced by the Reserve Bank of India (RBI) in April, 2016. Before that, banks used to charge home loans on the basis of base rate.
Housing Finance Companies (HFCs), on the other hand, benchmark Retail Prime Lending Rate (RPLR) or any other reference rate. The actual rate is arrived by deducting a few percentages from the said benchmarks.
A teaser home loan is an offering where the rate of interest will remain fixed for the first few years before floating rates will apply to the outstanding loan balance. As these loans are offered at higher rates than a full-fledged floating rate loan, having them won’t be good. Currently, as the economy continues to face challenges due to weak demand that has got accentuated further by the COVID-19 induced lockdown, floating rates will come down even further. The RBI, which advanced its monetary policy meet scheduled to be held in June to May 20-22, 2020, has lowered the repo rate by a further 40 basis point to 4%. So, possibly from June 1, 2020, you could see floating interest rates coming down to even below 7%. The weak demand may continue for some more time. This could only widen the difference of interest rate between a teaser home loan and a complete floating rate loan. So, choosing a teaser home loan will translate into massive interest payments which can be avoided using the repo-linked floating rate home loan.
No, the interest rate won’t change whenever the lender changes the MCLR. For example, if the lender has provided you a loan on 1-year MCLR, the rate will be subject to change after a year from the date of home loan sanction. The same pattern will follow afterward. When the reset date arrives, the loan will be repriced according to the prevailing MCLR.
The concept Pre-EMI interest is applicable to partly disbursed home loans. A borrower has to pay only the interest portion of the loan till the time it is fully disbursed.
It is a loan extended by banks and housing finance companies to individuals wanting to buy a plot. However, this loan would be given when you construct a home on the plot. Apply Now
You need to submit the following documents
The home loan amount would depend on a variety of factors such as your income, age, property value, etc.
It means the amount of home loan you can get on the total value of the property. Loans up to 30 lakh can be financed at up to 90% of the property value. Loans above 30 lakh to 75 lakh can be granted at up to 80% of the property value. Loans above 75 lakh can be offered at 75% of the property value.
Yes, you can avail the home loan balance transfer facility to save on the overall interest outgo. The balance transfer is a process by which the outstanding loan balance gets transferred to another lender at lower rates of interest.
Home loans come with tax benefits for borrowers to avail. The tax benefits apply to both principal and interest repayments. You can get a maximum tax savings of up to 1.5 lakh on principal repayment in a financial year under Section 80C of the Income Tax Act. On the other hand, you can get a maximum tax savings of up to 2 lakh on interest repayment in a financial year under Section 24 of the IT Act.
A home loan balance transfer will be ideal when there’s a lot of time for the repayment to be over. More repayment period means a scope for massive interest payments is prominent. For example, you still have more than 10 years left to repay a 20-year home loan, you can transfer your home loan to a new lender and make significant savings. You also need to ensure the new lender offers you the balance transfer facility at an interest rate at least 0.25%-0.50% lower than the existing one.
The balance transfer will result in a reduced EMI that you need to pay every month. This will also reduce the overall interest payments on a home loan.
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