Home Loan for Government Employees

Owning a home is considered a major milestone when it comes to achieving milestones in life. Number of banks offer a variety of Home Loan for Government Employees in order to help them purchase a home. Home Loan is considered to be one of the most affordable financing options available, with low interest rates and benefits helping you save money on taxes or providing tax benefits, as well as providing sufficient liquidity and allowing your money to grow.

Banks design offers and concessions on home loan for government employees to appreciate their valuable contributions as a state or central government employee. In addition to these home loan advantages, you can take advantage of a variety of policies designed to help government employees to meet their home loan demands.

Government Employee’s Benefits in a Home Loan

For the services offered by government employees, the banks try to compensate by offering them various benefits while opting for a home loan, such as:

Flexible and Affordable EMIs

Government employees can take advantage of unique home loan schemes offered by the lenders. According to the new home loan policy, you can make loan repayments via EMIs (Equated Monthly Instalments) that are capped at 50% of your net monthly income until you reach the age of 75. Government employees on immediate payroll as well as retired government employees on pension can take advantage of these benefits.

No Processing Fee

To be eligible for a home loan, a government employee must meet the standard home loan eligibility criteria. Applicants who are eligible for a loan will get their loan sanctioned without having to wait days for approval. Some lenders remove the processing fee on the home loan amount in addition to providing instant loan approvals. You can get a loan with low interest rates and flexible terms without having to pay a large portion of your savings.

Competitive Interest Rates

If you qualify for a home loan, you may be able to get a loan with a low interest rate. However, if you work for the government, you can acquire a loan with even lower interest rates, especially for female government employees, who can get loans with interest rates as low as 0.05 percent. Benefits like these make applying for a home loan even more attractive for government employees.

Benefits for Married Couples

The government changed the rules for home loans, and now married couples who work for the government can take advantage of the offer. The couple can easily obtain a loan through the House Building Advance (HBA) scheme.

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Increased Advance Corpus

For central government and state government employees, the House Building Advance (HBA) scheme provides a home loan for the construction of a new home. Previously, government employees were entitled to take an HBA of up to INR 7.5 lacs. However, due to recent policy changes, you can now get a loan of up to INR 25 lacs. The previous HBA limit of INR 1.8 lacs for home extension projects has been increased by at least five times to INR 10 lacs.

Details Home Loan for Government Employees

Now you must go through all the details of the home loan offered by different banks to the government employees.

Government Employee Home Loan – Interest Rates and Fees

The following are the Home Loan Interest Rates for Government Employees.

Fee TypeCharges Applicable
Rate of Interest6.70% onwards (for salaried individuals)
Processing feesUp to 1% of the loan amount for salaried individuals
Loan statement chargesNIL
Interest & principle statement chargesNIL
EMI bounce chargesRs. 3,000
Penal interest2% / Month
Secure feeRs. 3,999

Eligibility Criteria and Documents Required for Government Employee

The Home Loan Eligibility for Government Employees::

  • You must be an Indian citizen to be eligible.
  • Three years of work experience is a must.
  • A home loan is available to people between the ages of 23 and 70.
  • Must have a CIBIL score of at least 700.

The documents required to apply for a home loan are listed below.

  • Aadhaar Card/Passport/Driving License
  • Address Proof
  • Identity Proof
  • Form 16 or your most recent salary slip
  • Bank account statement for the last three months.

Government Employee Home Loans by SBI

SBI Privilege Home Loan

Exclusively for government employees, SBI has launched the SBI Privilege Home Loan. Individuals with pensionable service who work for the central or state governments, including PSBs, PSUs of Central Government Of India and other government employees, are eligible to apply for this home loan. In other words, this is exclusively a home loan for central government employees and state government employees. The loan amount is calculated on the basis of the applicant’s income and repayment capacity, age, assets and liabilities, and the cost of the proposed house/flat, among other factors. Government employees can get a home loan from SBI at affordable interest rates starting at 6.95 percent per annum. Employees of the Central and State governments, as well as employees of Public Sector Banks (PSBs), Central Government-owned PSUs, and others with pensionable service, are eligible for SBI Privilege Home Loan.

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Features of SBI Privilege Home Loan

  • Wherever the government has extended the check-off facility in partnership with the bank, employees can benefit from a lower interest rate, which is reduced by 0.05 percent above the home loan card interest rate.
  • Annual interest rate – 6.95 percent – 7.40 percent
  • EMIs will be lower during the post-retirement period because the limit is set at 50% of current net monthly income.
  • The loan maturity age is increased up to 75 years, compared to more than 70 years under the standard home loan scheme. The maximum repayment period is, however, 30 years.
  • Employees of the central government can transfer the outstanding balance of a loan from another bank to SBI.
  • Even if the processing fee is totally eliminated, you must still pay the Advocate Fee for legal advice, the Valuer Fee for the Valuation Report, and the CERSAI and CIBIL charges.

SBI Shaurya Home Loan

Apart from SBI Privilege Home Loan, SBI Shaurya Home Loan is also one of the two major programs launched by SBI. Central government employees and army personnel can take out a home loan with low interest rates and no difficulties using these services.

Both of these home loan packages have favourable interest rates. SBI has also raised the maximum age for repaying a home loan from 70 years to 75 years. According to the scheme, Army, Navy, and Air Force personnel are eligible for the SBI Shaurya Home Loan. 

Features of SBI Shaurya Home Loan

  • The maximum EMI payment during the post-retirement period is fixed at 50% of the existing net monthly income.
  • Interest rate is 6.95 – 7.40 percent per annum
  • The maximum age at maturity of the loan is 75 years, compared to more than 70 years for a traditional home loan. The repayment period is limited to 30 years.
  • Even if the processing price is completely waived, you must still pay the Advocate Fee for legal advice, the Valuer Fee for the Valuation Report, and the CERSAI and CIBIL fees.
  • Defence personnel can transfer the outstanding balance of their home loan from another bank to SBI and take advantage of the offers.

HDFC Home Loan for Government Employees

HDFC Arya Home Loan

The HDFC Arya Home Loan Scheme, introduced by HDFC Bank, offers the lowest interest rate on a home loan. With Flat Processing Fees, you get the loan at Interest rates starting from 6.70 percent per annum. 

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Features of HDFC Arya Home Loan

  • The lowest interest rate among all the major banks that offer home loans.
  • No prepayment charges.
  • No hidden charges.
  • Lowest processing fees – INR 2500 plus taxes.
  • Loans are processed quickly and easily.
  • Repayment period has been extended to 65 years of age.
  • Quotes are customized to the demands of the consumers.
  • Easy custom – made EMI Alternatives – Aside from the standard EMI scheme, HDFC offers customers step flip and other payment options.

PNB Government Employees Home Loan

PNB Pride Home Loan

This loan type is designed to ensure that home loans are available at reasonable rates and that all government employees have a place to call home.

Features of PNB Pride Home Loan

  • The MCLR (Marginal Cost of Funds based Lending Rate) of PNB currently stands at 8.45%.
  • On home loans up to INR 75 lac, PNB’s interest rates are MCLR plus 0.20 percent. MCLR plus 0.25 percent is applied to loans above INR 75 lac.
  • Procedure for repayment on loan for repair, restorations, or modifications to the property is set to a maximum of 15 years, including any moratorium period. While a loan for others has a maximum term of 30 years, including any moratorium period.
  • For the purpose of calculating borrowers’ repaying capacity, the income of the partner and earning children (whether married or unmarried) as well as the income of joint owners might be added.

Bajaj Finserv Home Loan For Government Employees

Bajaj Finserv offers a Home Loan that comes in with benefits exclusively limited to Government Employees. The benefits offered with this loan are as follows:

  • Convenient Repayment terms and Reasonable EMI’s
  • Lower Interest Rates, Especially for Women.
  • Zero Processing Fee
  • To benefit further, Bajaj Finserv also offers Home Building Advance.


SBI, HDFC, PNB and Bajaj Finserv Home Loans are among many other Home Loan for Government Employees in India. Apart from these four home loans, there are other banks and financial institutions as well that provide certain benefits to government employees in the home loan category but these four are generally considered to be the best home loan for government employees. You can compare other banks as well on our website if you wish to apply for a Home Loan. 

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  • Home Loan Interest Rates February 2024
    Axis Bank8.75% - 9.15%
    Bank of Baroda8.50% - 10.60%
    Citibank8.75% - 9.15%
    HDFC8.50% - 9.40%
    ICICI Bank9.00% - 9.85%
    Indiabulls Housing Finance Limited8.65%
    Kotak Bank8.70%
    LIC Housing8.50% - 10.50%
    Piramal Capital & Housing Finance10.50%
    PNB Housing Finance8.50% - 10.95%
    Reliance Home Finance8.75% - 14.00%
    State Bank of India/SBI9.10% - 9.65%
    Tata Capital8.95% - 12.00%
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