Home Loan

Home Loan - Apply for Housing Loan @ 08.65% Interest Rates Online in India

Home Loan Overview

Buying a home could be one of the biggest achievements of a person's life. In most cases, it takes an entire lifespan to fulfil the dream of purchasing one's own home. Selecting the ideal property involves a lot of research and planning. Arranging funds is probably the toughest and the trickiest part of the process.

Most lenders get the property valued independently and provide loans based on their estimated value. It is important to remember, however, that frequently their valuation is significantly lower than the actual cost and hence the requirement of the borrowers goes up. Home loans in Indian Banks are provided up to maximum of 80% (90% for loan amount below INR 20 lakhs) of the value of the house. Home loans are repaid using Equated Monthly Installments (EMIs) spread over a fixed tenure.

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Home Loan Eligibility Criteria

Every bank has its own set of eligibility criteria so as to properly assess your repayment capacity. The Repayment capacity per say is based on your monthly disposable income or surplus income, (which is based on factors such as total monthly income / surplus less monthly expenses) and other contributing factors such as your spouse’s income, assets, liabilities, stability of income and so on.

The main concern from the bank’s perspective is to make sure that you can comfortably repay the home loan on time. The higher your disposable monthly income, the higher the amount you will be eligible for. A bank typically assumes that about 55-60 % of your monthly disposable income is available for repayment of the home loan. There are exceptions to this however where some banks calculate the income available for EMI payments based on an individual’s gross income and not on the disposable income.

As always, the loan amount depends on the loan tenure and the interest rate. Banks generally fix an upper age limit for home loan applicants.

Bank Home Loan Criteria

Different banks have different eligibility criteria, however, we can broadly classify them into the following buckets:

Monthly Income – One of the most important considerations when a bank decides the maximum loan amount it can disburse, is your monthly income (if you are a salaried individual. if you are a self employed person, your yearly profit would identify your maximum loan amount)

The loan amount basically depends upon the net income of an individual and a bank usually provides home loans up to 60 times of an individuals net income. For e.g. if a person take home salary is Rs 30,000 he /she may be offered a home loan of around Rs 18 lacs. However, the finality of this decision is based on a few other criteria.

Other EMI – If you have any previous loans or EMIs pending, a bank will always consider the risk and the financial load you are taking on to decide to give you a home loan.

Available Income – The income that is left in your bank account after deductions of any EMIs is a very important consideration for giving out a home loan. The Home Loan Eligibility Calculator will be calculated after deduction of the EMI’s that you are paying monthly.

Property Attributes – If you are a home owner already, you should know that banks provide upto 75% of your home property value as a loan amount. So for example, if your home or property is worth 50 Lakhs, you can get upto 75% of that amount as the loan amount, which in this case works upto 37.5 Lakhs. Here, based on your income and property value banks decide your exact home loan eligibility.

Banks also have certain norms for the property before granting a loan. These are with respect to the minimum area requirements for a flat which may be carpet area or built up area. The bank also considers the age of the property in case of an existing property, the location of the property and also the reputation of the builders constructing the property. Thorough analysis and inspection of the property to check whether the title is clear or not is an additional check in addition to things like ownership disputes and so on.

Credit History – The credit history of an individual plays an important role in deciding the amount of the loan. Credit history is basically the credit report of an individual based on credit information recorded by CIBIL through all your loan transactions. Based on your credit score, a bank or any other financial institution decides whether an individual is eligible for a loan or not. The credit history is generally affected by outstanding credit card payments and any unsecured loans.

Age – Age plays a crucial role in determining your eligibility for a home loan. One has be atleast 21 years of age to apply for a home loan. The minimum age requirement may be different for different lending institutions. The maximum age may vary from 58 to 65 years depending on the income source of the individual. Age also determines the tenure and EMI of the loan. For e.g. if an individual is 35 years of age and retires at 60 then his/her loan tenure will be 60-35=25 years and the EMI will be calculated accordingly. The longer the tenure the lower will be the EMI’s. However the longer the tenure, the costlier the loan is as one ends up paying more interest.

Co-applicant – In order to enhance the eligibility for having a loan one can have a co-applicant such as a spouse or close nominated relative or friend. As a result of this the total eligible income for having a home loan increases and thus as a result the loan eligibility becomes higher. However banks permit only certain relationships to become the co-applicant.

As mentioned earlier, every bank has its own set of Eligibility Criteria. In case of NBFCs customers can expect higher eligibility.


Documents Required for Home Loan

Every customer has to satisfy the Know Your Customer (KYC) norms stipulated by RBI. You have to provide the documents relating to your KYC, employment, business, and income.

Identity Proof

  1. PAN Card
  2. Aadhar Card
  3. Voter ID
  4. Driving Licence
  5. Passport 

Address Proof

  1. Registered Rent agreement
  2. Aadhar Card
  3. Driving License
  4. Lease agreement
  5. Passport
  6. Latest Gas or electricity bill

Financial Documents - Employment or Business Proof

  1. Salary slips for the last 6 months in case you are a salaried employee (In addition, you can provide IT returns for the past 3 years along with Form 16)
  2. IT returns for the past 3 years in case you are self-employed (Some banks accept 2 years IT returns as well)
  3. Statement of A/c for the past 1 year where your salary is credited (in case of salaried people)
  4. Profit and Loss statement and Balance sheet for the last 2 years in case of self-employed persons
  5. Sales tax, GST registration certificates, if applicable
  6. Partnership deed in case of partnership firms (if the applicant is one of the partners)
  7. Certificate of Incorporation in case of limited companies(if the applicant is one of the directors)

Other documents:

  1. Loan application form duly filled in
  2. Photographs
  3. Signature Proof

Property documents:

  1. Copies of all property documents that can establish the chain of ownership for the past 30 years
  2. Encumbrance certificate for 30 years
  3. Property tax paid receipt in case you reside in the property being mortgaged (usually when you apply for Home Loan Balance Transfer)

Home Loan Interest Rates

Home loan offerings differ from different bank providers. Home loan interest rates vary depending on a number of factors such as:

Employment Type: Personal loan interest rates differ for salaried and non-salaried personnel, considering non salaried personnel can pose risky investment possibilities

Company Type: Companies are organised into Category A, B and C based on parameters like revenue, adherence to standards and so on

Salary: Your salary dictates how much your interest rate could be. Lower salaries usually warrant higher interest rates to mitigate the banks lending risk

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Home Loan Interest Rates

Floating Interest rate Per lac EMI Processing Fee Prepayment Charges
ICICI Bank For Women – 10.10% For Women: Rs.972 0.50% of loan amount upto Rs. 1 crore N.A
For Others -10.15% For Others: Rs. 975
HDFC Ltd 8.65% Rs.909 0.5% or maximum 10,000 + Service Tax (12.36%) No prepayment charges shall be payable for partial or full prepayments irrespective of the source
HSBC Bank For Salaried: 10.15% – 10.35% Salaried: Rs.974 – Rs.988 1% of the loan amount applied for, subject to a minimum of Rs 10000 plus service tax. This fee is payable on application and is not refundable Nil
For Self Employed: 10.25% – 10.45% Self Employed: Rs.981 – Rs.995
AXIS Bank 10.25% Rs.982 Upto 1% of the loan amount subject to minimum of Rs.10,000/- Nil
IDBI 10.25% Rs.982 0.50% of loan amount + applicable tax subject to maximum of Rs. 50,000/- + applicable tax If Balance Transfer then 2% Otherwise Nil
PNB Housing Finance Ltd. 10.50% – 11.25% Rs.998 – Rs.1049 0.50% NIL
ING Vysya 10.75% – 11.25% Rs.1015 -Rs.1049 0.5% of the loan amount NIL
Standard Chartered 10.26% Rs.982 Rs.5500/- + Service tax NIL
Citibank Scheme I: 10.25%*(No Home Credit facility) Scheme I: Rs.982 (No Home Credit facility) For Salaried: 0.25% NIL
Scheme II: 10.50%*(Home Credit facility available) Scheme II: Rs.998 (Home Credit facility available) For Self Employed: 0.5%
Deutsche Bank 10.50% Rs.998 12000 + Service Tax Nil
DHFL For salaried: 9.35% For salaried: Rs. 922 For salaried: 1% NIL
For Self Employed: 9.45% For Self Employed: Rs. 929 For Self Employed: 1.5%
India Bulls Upto Rs. 25 Lakhs: 10.15% Upto Rs. 30 Lakhs: Rs. 7500 + 12.36% NIL
Above Rs. 25 Lakhs: 11% Above Rs. 25 Lakhs: Rs. 1032 Above Rs. 30 Lakh: 0.5% of Loan Amount
Kotak Bank 10.25% Rs.982 0.25% – 0.5% 2% on Balance transfer else NIL
PNB Housing Finance Ltd. 10.25% Rs.982
First Blue Home Finance For Salaried/Self-Employed: 10.25% For Salaried: Rs. 982 Salaried (Up to 30 lakhs): Rs. 7300 Nil
For Salaried/Self Employed (Upto Rs 25 Lakhs): 10.75% For Self Employed: Rs. 1015 Rs. 30 – 75 lakhs: Rs. 11800
For Salaried/Self Employed (Above Rs 25 Lakhs): 11.25% Above Rs. 75 lakhs: Rs. 15,000 + Service Tax (12.36%)
Development Credit Bank 11.50% Rs.1066 1% of Loan Amount Nil
Tata capital Housing Finance ltd For Salaried: 10.25% – 10.9% For Salaried: Rs. 982 – 1025 0.5 to 1% Of Loan Amount N.A
For Self Employed: 10.75% – 11.50% For Self Employed: Rs. 1015 – 1066