What is Home Loan ?
Any amount of money borrowed from a bank or an NBFC for the purchase, expansion, or construction of a home at a certain fixed or floating rate of interest, payable in EMI or Equated Monthly Instalment over an agreed period, is termed as a Home Loan. The property remains as security with the lender for the term or period of the loan. You may avail a home loan for purposes such as:
- Purchase of Residential Property
- Acquisition of Land
- Home Construction
- Home Expansion
- Home Renovation
- Balance Transfer
Home Loan Types
Home Loan
A Home loan happens to be the most common type of loan wherein the house is held as collateral until you repay the loan. Numerous housing finance companies and public and private banks make such offerings with a choice of repayment options.
Home Construction Loan
If you have a plot of land and lack financial support to construct a home on that piece of property, you may choose a house construction loan. Such borrowing is mainly made to construct or repair a major part of your home.
Home Extension Loan
Should you already own a home, and feel the need to extend the building, add an annexe, or build another floor, etc., Home Extension Loan is your go-to option that finances such needs.
Home Improvement Loan
All of us wish to improve and upgrade our homes for a better life. From your old-age furniture, fixtures to faulty lightning systems, Home Improvement Loan funds all your plans.
Home Loan Balance Transfer
Burdened with high-interest rate debt on your current home loan? Home Loan Balance Transfer lets you transfer your debt to a low-interest rate charging plan to lower your burden and improve your paying capacity.
Composite Home Loan
A Composite Home Loan empowers you to purchase a plot and construct a house as well on the acquired land; both with a single loan and within a stipulated time mentioned by your Bank.
Home Conversion Loan
Should you want to move from your present dwelling place to a new dwelling due to professional or personal reasons, you may opt for a Home Conversion Loan. A home conversion loan facilitates the smooth conversion of your current loan from your old home to your new home.
Pradhan Mantri Awas Yojna
The plan of the Government of India to allow every Indian Citizen an opportunity to own a home in India via the drafting of the Credit Linked Subsidy Scheme or CLSS is known as Pradhan Mantri Awas Yojna. Under the PMAY, a citizen can avail Home Loan from almost all banks allied with this scheme.
NRI Home Loan
If you are a patriot, a Non-Resident Indian, and wish to own residential property in India, NRI Home Loan is your choice. Though the formalities for application may be a little different, you can still get a loan up to a certain percentage of your property value.
Home Loan Eligibility Criteria
A Home Loan requires a borrower to pledge the property to be purchased as collateral. You may qualify for this type of credit by fulfilling your lender’s set eligibility criteria.
- Age
Typically, you must be above 21 years of age at the time of the commencing of your loan, and up to 65 years or less at home loan maturity
- Salaried Person - 21 years to 58 years
- Self-Employed Person - 25 years to 65 years
- Income
- Salaried Person - Minimum Rs. 10,000 per month
- Self-Employed Person - Minimum Rs. 2,00,000 per year
- Employment
- Salaried Person - Minimum 2 to 3 years of Experience in MNC, or a Private or Public Limited Company
- Self-Employed Person - Minimum 3 years of Experience in the current field
- Credit Score
Typically, a credit score of 750 may be considered a good score for approval. – CIBIL (For score check here)
Calculator
Home Loan Interest Rate
The term Interest Rate on a Home Loan or Mortgage Loan may be defined as an amount a lender charges you as a borrower in terms of a percentage of the Home Loan Principal Amount or Home Loan Value.
Also termed as Rate of Interest or ROI, this charge applies to the Principal Amount on an annual basis over the specified home loan tenure.
| Bank Name | Interest Rate | Lowest EMI(per lack) |
|---|---|---|
| Central Bank OF India | 7.5% | 12000 |
| Standard Chartered Bank | 7.7% | 0.15% |
| Bajaj Home Finance | 7.8% | 11800 |
| HSBC Bank | 7.9% | 11800 |
| IDFC First Bank | 7.95% | 11800 |
| L & T Housing | 7.95% | 5900 |
| PNB Housing Finance | 7.99% | 0.25% |
| Kotak Bank | 8% | 11800 |
| DBS Bank | 8% | 11800 |
| Tata Housing Finance | 8.05% | 0.35% |
| HDFC Home Loan | 8.1% | 2360 |
| Yes Bank | 8.1% | 11800 |
| Bank of Baroda Home Loan | 8.1% | 11800 |
| RBL Bank | 8.1% | 0.50% |
| Federal Bank | 8.15% | 11800 |
| Axis Bank | 8.35% | 11800 |
| Hero Housing | 8.5% | 0.50% |
| Indiabulls | 8.75% | 1% |
| Aditya Birla Housing | 9.5% | 0.50% |
| Capri Housing | 9.5% | 1.50% |
| DCB Bank | 9.6% | 0.50% |
| ICICI HFC | 9.75% | 1% |
| Fullerton Grahshakti | 10% | 1% |
| Priamal Housing Finance | 10% | 0.75% |
| Adhar Housing Finance | 10% | 1.50% |
| Ujjivan Housing | 11.5% | 1.50% |
| Chola Madalam | 11.6% | 1.25% |
| DMI Housing | 11.75% | 1% |
| Edelwessis | 11.75% | 1% |
| Shriram Housing | 12% | 1% |
| Vastu Housing Finance | 12% | 1% |
Documents Required for Home Loan
- Identity Proof
- Aadhaar Card
- PAN
- Voter ID
- Passport
- Driving License
- Residence or Address Proof
- Electricity Bill
- Telephone Bill
- Post-Paid Mobile Phone Bill
- Water Tax Receipt
- Property Tax Receipt
- LIC Policy Receipt
- Recognized Public Authority Verification Letter
- Age Proof
- Any of the above Identity Proof with Permanent Address
- Birth Certificate
- Bank Passbook
- Property Documents
- Sale Deed
- Stamped Agreement of Sale
- Allotment Letter
- No Objection Certificate or NOC
- Housing Society
- Builder
- Possession Certificate
- Land Tax Receipt
- Construction Cost Estimate
- Bank Account Statement of Payment Made to Seller or Builder
- Payment Receipt of Payment Made to Seller or Builder
- Incase of resale property share certificate is required
- Occupancy Certificate
A Home Loan Balance Transfer is a loan transfer process where you transfer your outstanding home loan balance from your existing lending institution to a new lender. It facilitates savings in terms of interest payments when you opt for a lender who offers to charge you a lower rate of interest than what your current lender charges you. This migration known as Home Loan Balance Transfer may also be termed as Refinance, or Balance Transfer.
Your current lender will charge you a foreclosure or prepayment charge predetermined in your Home Loan agreement. In the course of the transfer, your new lender may charge processing fees and stamp duty on your loan agreement, if applicable.
- Features
- Home Loan Balance Transfer involves the transfer of your outstanding Home Loan Balance from your existing lender to a new lender.
- Depending on the lender you have chosen for your home loan transfer, you may have to pay processing fees, and stamp duty on your loan agreement.
- Depending on the terms and conditions in your existing loan agreement, you will be allowed a Home Loan Balance Transfer after the time-period in your original loan agreement lapses.
- You will be charged a foreclosure or prepayment charge by your existing lender according to your loan agreement.
- Most cases are treated as a new home loan agreement following the completion of a Home Loan Balance Transfer.
- After the completion of your Home Loan Balance Transfer, you will owe the transferred principal loan sum with overheads to your new lender.