Home Loan
A home loan is a secured loan provided by banks and Housing Finance Companies (HFCs) to buy homes. Lenders provide loans for 75% to 90% of the property’s value for the repayment period of 30 to 40 years. On MybankingTips you can compare interest rates and features from top banks and HFCs to find the best home loan for your needs.
Intrest Loan
Starting from 8.30% p.a.
Loan Amount
Varies on case-to-case basis
Tenure
Up to 30 years with some lenders extending till 40 years
processing Fees
1% to 2% of the loan amount (may vary across lenders)
Eligibility Criteria For Home Loan
Home Loan requirements may differ from one lender to another, but here are key factors that most lenders will check to determine your eligibility:
Minimum Age: 18 years with some lenders setting the minimum age of 21 years
Maximum Age: Usually 70 years at the time of loan maturity with some lenders extending the tenure till 75 years of age
Credit Score: Preferably 750 and above
Work Experience: At least 2 years (for salaried)
Nationality: Indian Residents, Non-Resident Indians (NRIs), and Persons of Indian Origin (PIOs)
Minimum Salary: least Rs. 25,000 per month (varies across lenders & locations)
Loan Amount: Up to 90% of property value
Business Continuity: At least 3 years (for self-employed)
Documents Needed Availing Home Loan
Basic Documents (For Everyone)
- Identity Proof: Aadhaar Card, PAN Card, Passport, Voter ID, Driving License (Any one)
- Address Proof: Electricity Bill, Water Bill, Telephone Bill, Ration Card, Bank Passbook, Passport (Any one)
- Age Proof: Birth Certificate, Aadhaar Card, PAN Card, Passport, Driving License, 10th Class Mark-sheet (Any one)
Property Documents
- Sale deed or allotment letter
- Approved building plan
- NOC (No Objection Certificate) from Society or Builder
- Detailed cost estimate for house construction
- Latest property tax paid receipt
- Ownership papers (title deed)
Income Documents
For Salaried People:
- Latest salary slips
- Form 16 or Income Tax Returns (ITR) for the last 3 years
- Bank statements for the last 6 months showing salary deposits
- Proof of any savings or investments (if any)
For Self-Employed People::
- Business address proof
- ITR for the last 3 years
- Balance sheet and Profit & Loss statement audited by a CA
- Business license or professional registration certificate
Additional Documents for NRIs (Non-Resident Indians)
Identity and Address Proof:
- Passport with visa stamps or PIO Card
- Proof of current overseas address (e.g., utility bill, government ID)
For Salaried NRIs:
- Recent salary slips or certificate
- Work permit/employment letter (translated if needed)
- Bank statements for the last 6 months showing salary deposits
- Form P60 or employment contract
For Self-Employed NRIs:
- Last ITR and financial statements
- Bank account statements for the last 6 months
- Business license or professional certificate
Other Important Documents
- Completed loan application form with 3 passport-size photos
- Loan account statement (if you have previous loans)
- Credit report (if available)
Note: Prepare these documents to ensure a smooth home loan application process. The bank may also ask for more documents based on your situation.
Home Loan Processing Fees & Other Charges
The fees and charges for home loans can vary significantly based on the lender and the credit profile of the applicants. The following table provides a general overview of the common fees and charges associated with Home Loan:
| Particulars | Charges | |
|---|---|---|
| Processing Fee | 1% – 2% of loan amount | |
| Foreclosure/Prepayment Charges | For floating rate: Nil
For fixed rate: Around 2% – 4% on the principal outstanding |
|
| Overdue Charges on EMI | 2% per month of the unpaid EMI | |
| EMI Bounce Charges | Around Rs 400 | |
| Legal Fee | As per Actuals | |
Tax Benefits on Home Loans
People with Home Loans can enjoy tax benefits under different sections of the Income Tax Act. These benefits help borrowers save a significant amount of money each year. Here are the tax advantages you can receive on your home loan EMI payments:
| Section of Income Tax Act | Nature of Home Loan Tax Deduction | Max. Tax Deductible Amt. |
|---|---|---|
| Section 24(b) | Interest paid | Rs. 2 lakh |
| Section 80C | Principal (including stamp duty and registration fee) | Rs. 1.5 lakh |
How to Apply for a Home Loan
Applying for a home loan is quick and simple. Just follow the following three easy steps:
Step 1: Share Your Details
Fill out your personal information and loan requirements, such as the loan amount and repayment tenure.
Step 2: Check the Offers
Based on your details, you’ll see a list of home loan options. Compare the interest rates, processing fees, and the maximum loan amount offered by each lender.
Step 3: Apply for the Loan
Pick the home loan offer that works best for you based on your requirements and submit your application.
After submitting your application, you’ll get a confirmation with a reference number. Then you will be contacted by a loan expert within 24 hours to guide you through the next steps.
Types of Home Loan
Home Construction Loan
A Home Construction Loan is designed specifically for individuals who want to build their house. It can help you manage construction costs efficiently.
Step-Up Loan
A Step-Up Loan is designed for young professionals who need smaller payments at first but can pay more as their income rises. It allows for smaller payments in the early years, with the flexibility to increase EMIs later.
Home Purchase Loan
A Home Purchase Loan is the most common type of home loan for buying a house. You can also use it to purchase a residential plot for future construction.
Composite Loan
A Composite Loan is a combination loan that covers both purchasing a plot and constructing a house. It is a good way to manage both expenses under a single loan application in a hassle-free way.
Bridge Loan
A Bridge Loan provides short-term financial support for transitioning to a new property. It helps you purchase a new house while you wait to sell your current one.
Home Extension Loan
A Home Renovation or Improvement Loan is perfect for homeowners who want to upgrade or repair their existing property. Banks charge the same interest rate as regular home loans.
Interest Saver Loan
An Interest Saver Loan works like a home loan overdraft, where your loan account is linked to a bank account. Any surplus funds deposited in the account reduce the loan interest, effectively saving you money over time.
Features and Benefits Home Loan
Here are the key features and benefits of home loans:
- 1. No Collateral Needed
- 2. Flexible Usage
- 3. Affordable Rates
- 4. High Loan Amounts
- 5. Flexible Tenure
- 6. Top-Up Options
- 7. Easy Documentation
- 8. Fast Disbursal
Explore Our
Personal Loan Lenders
Kotak Mahindra
Axix Bank
HDFC Bank
SBi Bank
Federal Bank
IDFC Bank
ICICI Bank
AU Bank
FAQs Home Loan
What is a Home Loan?
A home loan is a type of loan provided by a bank or financial institution to help people in buying or building a house. It can be used to purchase a ready home or a house under construction, or you can even construct your own home.
How to Choose the Best Bank for a Home Loan?
Compare interest rates, processing fees, loan tenure, and the Loan-to-Value (LTV) ratio offered by various lenders to find the best bank for the Home loan and make an informed decision to meet your budget.
