Home loan is one of the most vital financial decisions of your life. In India, you can avail home loans mainly from two types of lenders: the housing finance companies such as LIC Housing Finance Ltd., DHFL and commercial banks like SBI, HDFC. However, most of the lenders sponsor 80% of the property value as a home loan. The remaining 20% needs to be capitalized as down-payment from your side. Although most of the NBFC banks can provide funds up to 90% of the property market value, the amount of loan sanctioned totally depends on your eligibility. The best course of action before applying for a home loan is to first calculate home loan EMI using home loan EMI calculator at Afino.com and then choose the best available options from different lenders.
- Avail Tax benefits on Loans: Enjoy the Tax benefits up to 2 lakhs on both principal loan amount and home loan Interest payments under the Section 24 and Section 80C of the income tax act. Once all the tax benefits are availed, you can then revel in lower EMI's and higher long-term savings.
- Improve your Credit Score: If you are paying your EMIs on their due dates of each month then you will see an increase in your credit score within a year itself. As long as you keep paying your repayments on time your credit score keeps on increasing.
- Benefit from Lower Interest Rates: With the RBI's recent rate cuts by 0.25%, new home loan borrowers can get a greater vantage of lower interest rates.
- Great Investments: Investing in properties has a great potential as the value of the property only increases over the long-term period. Thus, buying a home now means you are investing in increasing your profits over time.
- Joint Home Loan Advantages : Applying for a home loan with an earning co-applicant helps in increasing your home loan eligibility for a longer haul and gaining greater tax benefits. Moreover, if your co-signer is a woman then you can enjoy even higher tax concessions as per the Income Tax Act of 1961.
- Quick and Easy Application: Using easy and seamless online application processing such as Afinoz.com, you can apply for a home loan with minimum paperwork and get the approval in no time.
In order to be eligible for a home loan in India, the individual must fulfill certain eligibility criteria and based on that, the decision for the amount of home loan is made. Following are some of the key factors that are taken into consideration when applying for home loans:
- Age: Your age should be ranging from 21 to 60 years. Many times individuals in the age group of 30 to 50 are given more significance as they are considered more stable financially.
- Credit Score: There is no exact credit score benchmark fixed for home loans. Although, in order to avail lower interest rates you need a credit score of 720 or above?
- Income requirements: Banks expect you to pay 40 to 60 % of your salary towards EMI. So the income of both the salaried and self-employed professionals should be decent enough to be able to pay the loan EMI's.
- Co-applicant's income: If you have a co-applicant and your co-applicant is a working professional, then both of your income will be considered to determine the total loan amount.
- Employment stability and continuity: Minimum of 2-years employment at the current employer for salaried individual and minimum of 3-years in current business for self-employed business professionals.
DOCUMENTS REQUIRED FOR HOME LOAN
Documents required for home loans in India can be placed into two categories depending on the type of employment as:
Documents for Salaried Individuals:
- Loan application form: Completely filled loan application form attached with the recent passport size photographs of both applicant and co-applicants.
- Identity proof: Aadhar Card / Voters ID / Passport / Driving License / PAN Card.
- Income proof: Last 6 months salary slip or ITR, Most recent Form 16 and past 6 months salary bank statement, company ID card, appointment letter.
- Residence proof: Lease and License Agreement / Utility Bill (maximum three months old) / Passport.
Documents for Self-Employed Individuals:
- KYC Documents: Aadhar Card / Voters ID / Passport / Driving License / PAN Card.
- Residence proof: Lease and License Agreement / Utility Bill (not more than three months old) / Passport.
- Income Proof: ITRs or balance sheets/P&L accounts certified by a CA of the last 3 years and last 6 months of both self and business bank account statements.
- Proof of business ownership : Company license registration proof, property documents, recent Maintenance Bill.
As home loan interest rates are linked to the base rate dictated by RBI directives and with RBI's repo rate cut in basis point, borrowers can now avail the benefits of lowered home loan interest rates. Some additional aspects that may affect the interest rate on home loans include the loan amount, loan tenure, credit history and your reputation with the bank. Apply for a home loan with Afinoz and you can avail best home loan interest rates.
|S.N||BANK NAME||RATE OF INTEREST||PROCESSING CHARGE|
|1.||HDFC Limited||8.35% to 11.90%||0.50% of loan amount|
|2.||ICICI Bank||8.40% to 8.85% for General Borrowers, |
8.35% to 8.80% for Women Borrowers
|0.50% of loan amount + Service Tax|
|3.||Bank Of Baroda||8.35% to 9.60%||Upto Rs.7,500|
|4.||Axis Bank||8.35% onwards||0.50%of loan amount + Service Tax|
|5.||Bank of India||8.55% to 8.60%||0.25% of loan amount|
|6.||State Bank of India||8.30% to 11.40%||0.30% of loan amount|
|7.||Canara bank||8.35% to 8.55%||0.5.% of loan amount|
|9.||Indian Overseas Bank||8.55% to 9.05%||0.53% of loan amount|
|10.||Allahabad Bank||8.50% to 9.00%||0.40% of loan amount|
|11.||IDBI Bank||8.35% to 8.65%||0.50% of loan amount|
|12.||TATA Capital||8.75% to 9.05%||0.5% of loan amount|
|13.||Punjab National Bank||8.60% to 10.75%||0.5% of loan amount|
|14.||LIC Housing Finance||8.50% to 8.90%||Upto Rs. 5,000|
|15.||Bajaj Finserv||13.49% to 16%||2.25% - 3% of loan amount|
|16.||Kotak Mahindra||8.35%||0.50% of loan amount|
|17.||Indiabulls Housing Finance||8.35% to 11.75%||0.50% to 1.00% of loan amount|
|18.||L&T Housing Finance||8.70 to 9.65%||Upto 2% on loan amount + Service Tax|
|19.||Oriental Bank of Commerce||9.70%||0.50% of loan amount|
|20.||Central Bank of India||8.50%||0.50% of loan amount|
|21.||UCO Bank||8.60% to 8.80%||0.50% of loan amount|
|23.||DHFL||8.60% to 10.00%||Upto Rs. 20,000 + Service Tax|
Disclaimer: *Rates are subject to periodic change. Home loan interest rates & other fees and charges are subject to regular review and can vary with each customer. These can differ depending on your credit worthiness & other factors. The final interest rate will be based on different criteria including the bank’s internal policies & applicable rates at the time of approval. Please note that the interest rates provided here are based on the market research. To facilitate the comparison insight, certain set of data has been reorganized/restructured/tabulated. It is advisable to recheck the same with the individual companies / organizations. This website does not take any responsibility for any sudden or uninformed changes in interest rates. Banks or Financial Institutions can contact us at email@example.com for inclusions or updates.
For any further query, please contact us at +91-8795021552 or e-mail us at firstname.lastname@example.org.
Q. Who can apply for Home Loan?
Any salaried individuals, self-employed person or businessmen who overcome the eligibility criterion set out by the lending institutions can avail the benefits of home loan.
Q. Can I apply for the loan with a co-applicant?
Any immediate members of your family say your spouse/children/parents are allowed to act as your co-applicants in case of home loan.
Q. What security do I need to provide to avail the loan?
The property deed of the house for which loan is being taken should be provided as security against loan. If the house is under construction and you are not able to provide the required documents, then any collateral as security such as bank deposits, government bonds, deeds of other immovable property you own would need to be provided.
Q. How do I pay the EMI for home loan?
Two options are available to repay your loan:-
- Post dated Cheques : In case you don’t have an account with the specific bank, then you can draw a cheque to pay the EMI’s at the end of the month.
- Debit from account : Your EMI amount will automatically be debited from your bank account.
Q. What is the tenure of a home loan?
As home loans are related to long term loans their tenure ranges from a minimum of 15 years to the maximum of 30 years. It totally depends on your loan amount along with some other factors. Usually, the maximum tenure for salaried individuals is 25 years and for self-employed individuals, it is 20 years.
Q. Can I save money by paying off my home loan early?
With prepayment, you will able to reduce the EMI, which in turn will result in the reduction of the principal loan amount. Low principal amount leads to lower interest. Thus, you will be able to save lots of money with lower interest payments.
Q. Are there any penalties for pre-payment off a home loan?
Some banks such as SBI do not charge any penalty on pre-payment of home loans.
Q. What happens if I don't pay EMI's on time?
Banks will ask you to pay late payments penalty, you will be put on a high-risk loan borrower category and your CIBIL score will get affected.
Q. What is the maximum amount of a loan that I can avail?
The maximum amount of home loan disbursed depends on two factors:
- Your credit score
- Your potential to repay the loan
Banks usually take into account 40 to 60% of your net annual salary for EMI and the market value of the property as a factor to decide on the maximum loan amount to be disbursed.
Q. How can I estimate my monthly loan payments?
Your EMI is calculated using three main factors:
- Your borrowed loan amount
- Rate of interest
- Tenure of loan
You can easily calculate your estimated monthly loan payments by using this home loan EMI calculator available at afinoz.com.
Q. Why should I apply for a Home Loan from Afinoz.com?
Applying for home loans from Afinoz.com has the following advantages:
- Convenient: Afinoz.com provides an online platform where you can do all your dealings with the lender online and you don't have to visit different banks for loans in person.
- Compare rates of different lenders at one place: Afinoz.com provides a fuss free loan comparison and application platform.
- No agent involved: Applying for a loan from Afinoz.com saves unnecessary expenses and delays with the loan procedure.
Q. Should I go with the fixed or floating interest rate?
Fixed interest rate means the EMI's are fixed for the home loan over the entire period of repayment of the loan. While in floating, the rate of interest on the loan borrowed fluctuates with the market conditions. Research thoroughly and do your inquiries before taking the loan as each one of them has their own benefits and drawbacks.
Q.Can I trade my floating interest rate with fixed interest rate?
Not many banks allow you to trade from floating to fixed interest rates. However, some banks can permit you to switch with a small penalty charge. Make an enquiry to your lenders about the requirements and the procedure.
Q. Should I switch my base rate home loan to MCLR lending rate?
Reserve Bank of India has introduced a new set of guidelines for banks called MCLR (Marginal Cost of Lending Rate) wherein banks are allowed to set their own convention of lending rates and give loans to the borrowers as per their creditworthiness. If you have taken a loan on the basis of base rate then it would be tangible for you to transfer to MCLR lending rates, as you can a save large portion of money with the drop of interest rate in the future.
Q. How long does it take for the disbursement of the loan?
If all valid documents are submitted then the loan will be disbursed in 14-days. However, if you apply for a home loan online then after submitting all the prescribed documents online, it will take just 3 days for the approval of loan.
Q. Does the bank disburses the loan amount in full or in installments?
Once the loan is sanctioned, banks will then dispense loan in 3 to 4 installments based on the sale deed and builders demand notes of payments.
Q. Can I sell my property even before the loan amount is fully paid off?
You can sell your property after 7 to 10 years depending on the terms and conditions declared by the lender in the loan agreement.
Q. Can a pre-payment of home loan affects my credit score?
Doing so will not have any effect on your CIBIL score, but it will definitely increase your eligibility for a home loan.
Q. How can I apply for Home Loan Online on Afinoz.com?
You can apply for home loan from Afinoz.com with these three hassle-free easy to understand steps:
- Enter all your personal and employment details such as your full name, employment type, contact details, date of birth and your new property details.
- In the next step, view and compare the specifications like tenure, EMI amount, processing fees of different lenders and apply to the one you find most suitable.
- Upload the specified documents and submit the application form to get the home loan approved.
Q. What benefit can I get in terms of income tax on home loans?
You can get two benefits:
- 1. Tax benefits on interest - You can claim a benefit of maximum 2 lakhs on the interest amount paid on a home loan as stated in the section 24 of the income tax act.
- 2. Tax benefits on principal loan amount - You can also get a tax benefit of 1.5 lakhs on the repayment of principal home loan amount as per the section 80C of the income tax act.
Q. Can I get a home loan if I have a low credit score?
Banks are very selective when it comes to credit score. A low credit score will make it difficult for you get a home loan. However, many NBFC’s can compensate your low credit score with higher interest rates for availing a home loan.
Q. What are the top finance institutions providing home loans in India?
Some of the stellar housing financial institutions in India are: HDFC Bank, State Bank of India (SBI), Housing Urban Development Corporation (HUDCO), LIC Housing Finance Limited, IHFL, ICICI Home Finance Company Limited, DHFL, CHFL, PNB Housing Finance institution, GIC Housing Finance Limited, and others.
For any further query, please contact us at Afinoz.com, mo: +91-8795021552 , email email@example.com