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Overview

What is Home Loan ?

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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

Different Types of Home Loan for Your Varied Needs

A vast array of institutions offer you the best home loan rates at the most competitive rates and affordable EMIs.

Types of mortgage and home finance are discussed in brief below

  • 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, 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.

Application Process

How To Apply For A Home Loan

Check

1

Check your eligibility

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Apply

2

Click on apply now

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Fill

3

Fill in home and financial details

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Submit

4

Submit application

Features

Characteristics of a Home Loan

Home Loans are Secured Advances, which can be availed by mortgaging the property you seek to purchase. Existing property can also as collateral.

Lenders offer a Minimum Home Loan Value of Rs. 2,00,000 payable in Equated Monthly Instalments (EMIs)

Lenders offer a Maximum Home Loan up to 100% of the Value of your Property

You are offered a Home Loan subject to your income, employment type, credit history, the location of your property, and other factors.

Interest Rates available on Home Loan are of three kinds. Fixed Rate, Floating Rate, Marginal Combination of Fixed and Floating

Lenders offer you a Minimum Home Loan Repayment Period or Tenure of 5 years & a Maximum of 30 years.

Registration charges, processing fees, prepayment penalty, commitment charge, and miscellaneous charges for documentation and consultation, may apply on your home loan.

Depending on the lender you select, you may be offered a home loan pre-payment facility with or without a prepayment charge.

You are entitled to tax benefits on your home loan according to the Income Tax Act, 1961.

You may avail a home loan with your spouse or parent as a co-applicant or a joint applicant, for which you can avail tax benefits too.

Process

Steps To Acquire A Home Loan

1

Enter your details in the Home Loan Application Form

2

Furnish your essential documents as asked to further the process

3

Pay Home Loan Processing Fee

4

Your Home Loan Application and Documents will be inspected and verified

5

Your Home Loan Application will be queued and sent for approval or sanction

6

Your lender will visit the property you intend to purchase for a legal check.

7

After approval, your Home Loan Amount will be disbursed to your Bank Account

Getting Started

Frequently Asked Questions

A Home Loan stands for the amount of money that you borrow from a Bank or an NBFC for a certain period for home purchase, improvement, construction, or land purchase, which you repay in Equated Monthly Instalment with interest at a pre-decided rate. Your property becomes the collateral against which you avail the home loan. The lender reserves the legal right to the property, which may be personal or commercial, and he may recover the outstanding loan amount in case of default by selling off the property.

Listed below are the types of Home Loan available
  • Decide the Exact Amount to Borrow
  • Home Purchase Loan
  • Home Improvement Loan
  • Home Construction Loan
  • Land Purchase Loan
  • Home Extension Loan
  • Joint Home Loan
  • Home Loan Balance Transfer
  • Top Up Home Loan

Home Loan Balance transfers feature the following benefits.
  • Enhanced Interest Rate
  • Better Features
  • Extended Loan Tenure
  • Augmented Loan Amount
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Eligibility Criteria & Calculator

Frequently Asked Questions

The following are the eligibility criteria for a Home Loan
  • Age
    • Salaried Person - Minimum 21 years and 58 years home loan maturity
    • Self-Employed Person - Minimum 25 years and 65 years at home loan maturity
  • 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 Experience MNC, or a Private or Public limited Company
    • Self-Employed Person - Minimum 3 years Experience in current field
  • Credit Score
    • Typically, a credit score of 750 may be considered a good score for approval

Your home loan eligibility will be determined after considering the prescribed eligibility criteria based on the following parameters

  • Net Monthly Salary
  • Tenure
  • Other Income
  • Current EMIs or Obligations

A home loan eligibility calculator happens to be one of the many easy methods used to determine your eligibility for a home loan. Monthly salary, loan tenure or period of loan, other monthly income, and your current EMIs and obligations are used in the algorithm of the online calculator to determine your home loan amount. When you input the required figures in the parameter form-fields, the results are displayed instantly. This gives you the opportunity to make an informed choice with much more accuracy than when you use the manual calculation method.

A co-applicant cannot be deemed as mandatory for a home loan application, yet a lender considers this as an added risk-lowering factor. A co-applicant adds a higher degree of credibility to your commitment to repay your home loan. A co-application thus has a better chance of home loan eligibility when you share the responsibility of loan repayment with another.
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EMI Calculator

Frequently Asked Questions

The principal portion and the interest of your loan makes up the EMI or Equated Monthly Instalment of your home loan. In other words, EMI = Principal Amount + Interest Amount. Paid on a monthly basis, the EMI remains constant throughout the period of your loan, when you choose the fixed interest rate method.

Your Home Loan EMI depends on three factors

  • Loan Amount or Loan Value
  • Rate of Interest
  • Loan Tenure or Period of Loan

Use the following mathematical formula to calculate you EMI.

EMI = P x r x ( 1 + r ) n / [ ( 1 + r ) n - 1 ]

Where,

  • P = Loan Amount
  • R = Rate of Interest
  • N = Loan Tenure in Months
Interest Rate & Processing Fees

Frequently Asked Questions

Interest charges range from 8.65% to 14.60 percent on home loans.

Processing fees are charges collected at the time of applying for a home loan. Most financial institutions charges process fees at application, while some do not charge any processing fee or just waive of the fee as a special offer. Process fees typically include:
  • Document Handling Charges
  • Lawyer Fees
  • Property Valuation Fees, etc.

The term home loan tenure indicates the period of the home loan, or the time by which the home loan has to be repaid in full, along with interest and other applicable fees, and charges.
Documents Required

Frequently Asked Questions

Documents you need to while applying for a Home Loan are listed below
  • Application Form - Completely Filled-Out with Signatures
  • 3 Passport Sized Photographs
  • Identity Proof
  • Proof of Age
  • Residence or Address Proof
  • Income Documents
  • Property Documents
Check the detailed List of documents required / Additional Documents required for Salaried Employees and Self Employed person.
Balance Taransfer & Topup

Frequently Asked Questions

A home loan can be transferred to one bank to another bank by availing a home loan balance transfer facility. The term home loan balance transfer refers to the process of moving your home loan outstanding balance from you current lender to a new lender. This you can do for better interest rates offered, and other benefits offered by you new lender.

A home loan balance transfer features a host of profitable benefits, which are as follows
  • Lower Interest Rates

    Most people go for a home loan balance transfer for reasons of reduced interest rates, which in turn lower EMIs, and lead to savings.

  • Reduced LoanTenure

    When you go for a home loan transfer at lower interest rates, which reduce your EMIs, this may also reduce the overall tenure of your home loan.

  • Top Up loan

    Many institutions offer you top up loan facilities when you request a home loan balance transfer. This top up facility may help you pay off your immediate debts to reduce debt burden, or use the same for home renovation purposes.

  • Other Offers

    Check with your lender if there are any additional offers on your home loan balance transfer facility to make the most of a balance transfer.

A one-time charge payable to a Bank or an NBFC to cover the cost incurred by the lender on the loan process may be known as a processing fee. This fee cannot be deducted from the loan amount, and you have pay this charge separately at the time of application.

Your home loan can be transferred by following the steps mentioned below:
  • Obtain Necessary Documents
  • Obtain Consent Letter from Existing Bank
  • Submit the Consent Letter to New Bank
  • New Lender will Pay your Outstanding Balance to New Lender
  • Your Old Account will be Closed
  • Old Bank will transfer Property Document to New Bank
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