Home loan is a loan secured for obtaining a property purchase. Home loans are mostly offered as a high funding amount, available for long tenors and at economical interest rates, which are further repaid through EMIs. You can apply for a first-time housing loan for buying a house, repairing, extensions, and renovations.
Features of Home Loan
- Home loan is secured and requires collateral (security)
- Maximum tenure period of a home loan is 30 years.
- Home loans usually range from ₹2 Lakhs to ₹10 Crore depending on income, eligibility, and repayment capacity.
- Your purpose can range from buying a house to extension/renovation of an existing house.
Home Loan EMI Calculator
Format: 12m, 36m, 3y, 7y
Monthly Payment (EMI):
₹85.61
Total EMIs:
12
Total Payments:
₹1,027.29
Total Interest:
₹27.29
Home loan EMI can be calculated by a mathematical formula,
EMI Amount = [P x R x (1+R)^N]/[(1+R)^N-1]
Where, P is the loan amount, N is the tenure period in number of months, and R is the rate of interest. A change in any of these three variables will affect the EMI value every time.
The home loan calculator above will help you to calculate your Home Loan EMI with ease. By entering loan amount, rate of interest, and tenure period, you can calculate your required home loan EMI.
Home Loan Comparison
Mostly two types of lenders offer home loans, housing finance companies and commercial banks. Different terms and conditions and interest rates are quoted by different lenders, therefore, to contact multiple lenders is important to be sure about getting the best value for your money.
It is also important to be sure about the down payment and all the additional costs included in the loan. Below is a small comparison of home loan amount, tenure period, interest rate, and processing fee between banks & housing companies.
| Bank/NBFC | Loan Amount | Tenure | Interest Rate | Processing Fee |
|---|---|---|---|---|
| SBI Bank | Up to 90% of property value | 1-30 Years | 7.55% p.a. onwards | 0.35% onwards (min. ₹2,000; max. ₹10,000) |
| HDFC Bank | Up to ₹75 Lakh | 1-30 Years | 7.55% p.a. onwards | 0.5% or ₹3,000 whichever is higher |
| Union Bank of India | ₹25 Lakh Min | 1-30 Years | 7.40% p.a. onwards | 0.5% (Max. ₹15,000) |
| LIC Housing Finance Ltd. | ₹30 Lakh – ₹5 Crore | 5-30 Years | 6.90% p.a. onwards | 0.35% of loan amount subject to maximum of ₹50,000 |
| PNB Housing Finance | Up to 90% of the cost of the property | 1-30 Years | 6.99% p.a. onwards | Up to 0.5% of the loan amount |
| Axis Bank | ₹5 Lakh – ₹10 Crore | 1-30 Years | 6.90% p.a. onwards | Up to 0.5% of the loan amount |
| Aditya Birla Capital | ₹20 Lakh – ₹10 Crore | 1-30 Years | 9.00% p.a. onwards | ₹ 5,000 to ₹ 10,000 |
| Indiabulls | ₹2 Lakh – ₹3 Crore | 1-30 Years | 7.60% p.a. onwards | 0.5% – 1% of the loan amount |
| IDFC Bank | ₹30 Lakhs Min | 5-30 Years | 6.50% p.a. onwards | ₹5,000 |
| Bank of Baroda | ₹1 Lakh – ₹10 Crore | 5-30 Years | 6.90% p.a. onwards | Contact the bank for information |
| Canara Bank | Depending on the applicant’s profile | Up to 30 Years | 7.05% p.a. onwards | 0.5% of the loan amount |
| Kotak Mahindra Bank | ₹10 Lakh – ₹10 Crore | 1-20 Years | 7.00% p.a. onwards | 0.5% of the loan amount |
| DSB Bank | ₹50 Lakh – ₹5 Crore | 1-25 Years | 7.20% p.a. onwards | ₹10,000 + Taxes |
| Sundaram Home Finance | ₹12 Lakh – ₹5 Crore | 1-20 Years | 6.95% p.a. onwards | ₹3,000 + Taxes |
| Bank of Maharashtra | Depending on the applicant’s profile | 1-30 Years | 6.80% p.a. onwards | 0.25% of the loan amount |
Home Loan Eligibility
Your home loan eligibility is decided by your lender after assessing your repayment capacity. Your capacity of repayment is calculated based on your monthly disposable/ surplus income. Other factors are also responsible such as
| Eligibility Criteria | Requirements |
| Age of applicant | Min Age: 18 years, Max Age: 70 years |
| Employment Type | Applicant can be any one of these: Salaried personnel or Self-employed personnel |
| Net Income (Annual) | Min ₹5-6 Lakhs (depending on employment type) |
| Resident type | Applicant must be one of these: Resident of India, NRI (Non Resident of India), PIO (Person of Indian Origin) |
| Residential status | Applicant must have any one of these: A Permanent residence, A rented residence (minimum residing period of 1 year prior applying for loan) |
| Credit score | At least 750 or more (from a certified credit bureau) |
The lender is most concerned about your comfortable repayment of the loan on time. Your home loan eligibility amount also depends on your monthly disposable income. If the percentage ranges from 50-60%, a bank assumes that surplus amount is available for repayment.
Home Loan Documents
Apart from all the legal documents that prove the house is bought. A lender will also demand for the below list of documents.
- Application form with one Photograph
- Latest salary slip attested by the employer (3 months)
- Residence Address and Ownership proof
- Identity proof
- Address proof
- Income Proof
- Balance sheet or bank statement (last 6 months)
- Advance Processing Check
- Photo ID proof (DL/PAN/Voter ID)
- Financial Documents
- For Salaried: Bank statement, Form 16, Salary slip (3 months)
- For self-employed (professionals): IT returns (2 years)with computation of income (2 years) (must be CA certified)
- For self-employed (non-professionals): IT returns (3 years) with computation of income (2 years) (must be CA certified)
Home Loan Interest Rates & Fees
Banks and lenders mostly offer two types of home loan interest rate options, Fixed Rate and Floating Rate. In a Fixed Rate loan option, the rate of interest is fixed through the entire tenure period. Whereas, in the Floating Rate loan option the rate fluctuates along with market rates. Interest rate for home loan may range anywhere from 6.40% to 18%.
To find out the lowest home loan interest rate option, you need to shuffle through different lenders and choose what best suits your requirements.
Various fees and charges associated with home loan mostly include
- Processing fees (up to 2%)
- Late payment fees (up to 3% of delayed amount)
- Administrative fees (INR 2500 – INR 6500)
- Prepayment charge (up to 6% of outstanding amount)
- Partial prepayment charge (up to 2% of outstanding amount)
- Documentation charges (include stamping charge, NOC charge, Interest Certificate charge, Income Tax Certificate charge, Agreement copy fee, etc.)
- Conversion charge (up to 3% of balance amount)
- Legal charges (include legal fees, inspection fees, MOD charge, CERSAI charge, etc.)
- Recovery charge (depends on processing expenses)
- Repayment mode swap charge (usually INR 500 per request)
Other fees and charges may also be applicable varying from lender to lender. Be sure to go through the Most Important Terms & Conditions (MITC) and the loan agreement provided to you by the bank. All details of fees and charges applicable to your loan are mentioned here.