A "low interest" loan shouldn't mean you have very little interest in paying it back!
Home Loan - Avail home loans up to Rs. 10 crore with interest from 8.35% p.a., processing fees from 0.5%, and repayment tenure up to 30 years through BankBazaar.
Home loans are one of the most preferred financial tools that enables an individual to purchase a plot of loan or a residential property instantly.
These loans are provided by Banks and housing finance companies (HFCs), and they have designed special schemes wide range of customers, including farmers, women, doctors, CA, etc. Here are the required details of various home loans/Housing Loans offered by various banks and financial institutions.
*All loans are at the sole discretion of HDFC Home Loans.Terms and conditions apply.
The following is the list of eligibility criteria
| Eligibility Criteria | Requirement |
|---|---|
| Age | Minimum Age: 18 years and Maximum Age: 70 years |
| Resident Type |
The applicant must be (anyone):
|
| Employment |
The applicant can be (anyone):
|
| Net Annual Income | At least Rs.5-6 lakh depending on the type of employment |
| Residence |
The applicant must have (anyone):
|
| Credit score | A good credit score of at least 750 or more obtained from a recognised credit bureau |
The following is the list of eligibility criteria
| Identity Proof (any one) | Residence Proof (any one) | Other Documents |
|---|---|---|
| Driving License | Copy of Electricity Bill/Water Bill/Telephone Bill | Employer Identity Card |
| PAN | Copy of valid Passport/Aadhaar Card/Driving License | Duly filled loan application form affixed with 3 passport size photographs |
| Voter ID | Loan account statement for the previous 12 months if the applicant has any other ongoing loan from other banks/financial institutions | |
| Valid Passport | Bank account statements for all the bank accounts owned by the applicant for the last six months |
The following is the list of eligibility criteria
| For Self-employed Applicant/Co-applicant | For Salaried Applicant/Co-applicant |
|---|---|
| Income Tax Returns for the last 3 years | Salary Slips for the last three months |
| Certificate of Qualification (for Doctors/CA and other professionals) | Copy of Form 16 or Income Tax Returns for the last two years |
| Balance Sheet audited by a certified CA and Profit and Loss account for the previous 3 years | |
| Business License Details | |
| Business address proof | |
| TDS Certificate |
The following is the list of eligibility criteria
| Identity Proof (any one) | Residence Proof (any one) | Other Documents |
|---|---|---|
| PAN | Telephone bill | Attested copy of the applicant’s/co-applicants’/guarantor’s valid passport and visa |
| Valid Passport | Electricity bill | Proof of residence indicating the applicant’s current overseas address |
| Driver’s License | Water bill | Employer Identity Card |
| Voter ID Card | Piped Gas bill | If the applicant is employed in the Merchant Navy, the applicant is required to submit a copy of Continuous Discharge Certificate (CDC) |
| Valid Passport | PIO Card issued by the Government of India in case the applicant/co-applicant is a Person of Indian Origin (PIO). | |
| Driving License | The completed loan application form duly filled with three passport size photographs of the applicant and co-applicants. | |
| Aadhaar Card | The attestation of the documents can be done by: 1. Indian Embassy/Consulate 2. Overseas Notary Public 3. FOs/Representative Offices 4. Officials of Branch/Sourcing Units based in India |
The following is the list of eligibility criteria
| For Self-employed Applicant/Co-applicant | For Salaried Applicant/Co-applicant |
|---|---|
| Proof of income if the applicant/co-applicant is a self-employed professional/businessman. | Valid work permit |
| Business address proof | Employment contract (translated in English) attested by the employer/consulate/embassy/Indian foreign office if the contract is in another language. |
| Balance Sheet and Profit and Loss accounts audited by a certified CA for the last 2 years | Salary slips for the last 3 months |
| Individual Tax Return for the last 2 years – Not applicable to NRIs/PIOs located in the Middle East countries. | Bank statements indicating salary credit for the last 6 months |
| Bank statement of the individual’s as well as the business/company’s overseas account for the last 6 months. | Copy of the Identity Card issued by the current employer along with the latest salary slip (original). |
| - | Copy of the individual Tax Return for the last assessment year. - Not applicable to employees in the Merchant Navy and NRIs/PIOs located in the Middle East countries. |
Depending on the type of loan you are applying for, the following charges may be levied:
BankBazaar helps you track your loan application easily. Visit application status, enter your Application ID and mobile number, and get the status.
Our EMI calculator helps you calculate the amount you must pay the bank monthly. Input your loan amount, tenure, interest rate, and processing fee to get your EMI and loan amortisation details.
Interest rates are the charges a lender will levy on you for borrowing a certain amount over a specific period. They directly impact your EMI. These rates will differ from one lender to another.
Banks charge this fee for processing your loan application. It is non-refundable and is charged before disbursal. It’s calculated as a percentage of the loan or a fixed amount..
Each bank has specific parameters based on which they approve a property loan for you. These include age, income, employment status, where you work, what builder you’re buying a house from, etc.
For the housing loan to be sanctioned, you must provide your identity and address proof, income documents such as ITR and payslips, bank statements, and proof of house purchase..
Pradhan Mantri Awas Yojana (PMAY) is a Government of India initiative that provides an interest subsidy of 6.5% on housing loans availed by the beneficiaries.
Banks in India provide different types of housing finance options for various purposes. Here’s a list of the prominent types of housing loans in India based on a study of products offered by some of the top banks:
| Do's | Don't |
|---|---|
| Ensure that you have researched the loan you want to apply for | Do not blindly sign the documents before you read every term and condition on it |
| Read the fine print before taking the loan | Do not forget to compare interest rates offered by different loan providers |
| Look out for any charges applicable on prepayments and foreclosure | Do not default on your monthly payments |
| Make sure you pay the equated monthly instalments (EMIs) on time | Do not apply for a loan just for the sake of it |
| Ensure that you have a good credit score before you apply | Do not sign the home loan agreement before reading the clauses |
| Apply for a loan amount you are eligible for | Do not request for a change in tenure unless you have considered all the aspects |
| Submit all the necessary documents | Do not submit an incomplete or mismatched loan application |
| Ensure that you have stable employment | Do not have too many ongoing loans |
You can always re-apply for a home loan if your first loan application was rejected by the lender. However, there are a few aspects you must consider before doing so.
Credit score: Since housing loans are generally long-term retail loans, lenders look into the applicant’s repayment capacity before approving or rejecting a loan application. Your credit score plays a major role in deciding your repayment capacity against a loan.
If you have a poor score on your credit report, chances of your loan application being rejected are high. The unsatisfactory credit score gauges your creditworthiness which banks and financial institutions consider before processing your loan application. Hence, it is advised to go through your credit score and credit report before you apply for a loan.
In case you have a poor credit score, consider improving your score by making your debt repayments on time before you reapply for a housing loan again. If you do not know what your current score is, you can get your credit score along with the credit report on BankBazaar.
Loan Amount: Since purchasing/constructing a home is a one-time investment, we often tend to overlook the financial costs involved in it. Banks and financial institutions fix the maximum loan amount you are eligible for by taking your present monthly income. There is a high chance your application was rejected because of the loan amount you have applied for.
If the loan amount applied for exceeds your eligible loan amount, the lender can decide to reject your application. In such cases, you can consider increasing the down payment on your home loan to bring down the loan amount.
Other Ongoing Loans: Banks can also choose to reject your home loan application if you have too many other ongoing loans. Since home loan lenders see to it that not more than 50% of your monthly income is being contributed to your loan repayments, any other ongoing long-term loans can result in your application being rejected.
Having too many ongoing loans will not only impact your personal finances but also your repayment capacity. Hence, it is advised to clear the ongoing loans, if any, before you apply for a housing loan.
Co-applicant: There can be instances where applications are rejected due to low income. In such cases, you can consider adding a co-applicant such as a member of your immediate family. This will increase the maximum amount you are eligible for as the income and creditworthiness of the co-applicant will also be taken into account while deciding your eligibility.
Employment: In some cases, the employment of the applicant can act as the deciding factor on whether the loan application is being approved or rejected by the lender. Your application can be rejected if the lender learns that you have been switching between jobs frequently.
Unstable employment can sometimes prove to have a negative impact on your loan application. On the other hand, stable employment with a recognised institution on your application can have a positive impact.
In case your housing loan application was rejected, and you have only been working with the current employer for a short period of time. You can consider giving it some more time before re-applying for another one.
Documentation: Housing loans include a lot of documentation such as identity proof, residential proof, bank account statements, income tax returns, income proofs, property papers, documents approved by concerned authorities, etc. Your loan lender can reject your loan application even if one of the required documents are not submitted.
You can always consult the banks’ customer relationship executives to assist you with proper loan documentation.
A home loan is a secured loan from a financial institution to buy a residential property. You can avail a home loan to buy a ready-to-move-in house, apartment, or one under construction. Home loans can be availed from both banks and Non-Banking Financial Companies (NBFCs).
Before signing up for a home loan product, it’s best that you compare loans offered by different banks and lending institutions. While comparing, consider the interest rate, Loan-to-Value (LTV) ratio, processing fees, and tenure offered by the bank. Use a home loan EMI calculator and calculate your EMI based on these factors. Compare multiple home loan products by various banks by using this method. Also, certain lenders roll out home loan offers with reduced interest rates from time to time. Keep an eye on that too while looking for a loan. Also, know your requirements first before applying. You can go through the above list to get an idea regarding which bank’s home loan would suit your requirement.
Usually, it takes 3 to 4 weeks to get a home loan sanctioned. However, you need to keep a few factors in mind for a better understanding. First of all, you need a pre-approval of your home loan from the concerned lender to get your loan sanctioned. However, pre-approval doesn’t always mean that your loan will be disbursed immediately and depends on certain external as well internal factors. For instance, your loan sanction can be delayed if there’s delay in submission of property or income-related documents.
Banks/financial institutions consider the following factors such as your age, annual income, occupational stability, resident type, number of co-applicants, credit score, ongoing loans if any, etc.when determining your loan eligibility.
The rate of interest associated with fixed-rate loans remains unchanged during the entire tenure of the loan. On the other hand, the interest rates applicable on floating rate loans can be revised from time to time depending on the RBI key policy rates. The equated monthly instalments can increase or decrease depending on the prevailing RBI rates in the case of floating rate type loans.
Yes, partial or full prepayment is possible. Floating-rate loans usually have no prepayment fee, but fixed-rate loans may incur a penalty of up to 2%.
Yes, you can avail tax benefits on both the interest and principal component paid against your home loan. As per Section 80C of the Income Tax Act, you can avail deductions up to Rs.1.50 lakh on the principal amount repaid annually. Under Section 24 of the IT Act, taxpayers are also eligible for benefits up to Rs.2 lakh on the interest repaid against a home loan annually.
The co-applicant can be an immediate family member such as your spouse, your parents or even your major children. It is also mandatory for all co-owners of the property to be co-applicants while applying for a loan. However, the co-applicant need not be a co-owner.
Pre-EMI is the interest paid until the entire loan amount is disbursed, after which regular EMIs, comprising principal and interest, apply.
Marginal Cost of funds-based Lending Rate is the benchmark rate set by a lending institution below which they cannot provide loans to their customers.
Yes, you can switch from a fixed to floating rate of interest on your home loan during the repayment tenure. However, you will be charged a conversion fee by the lender in such cases.
The loan repayment period begins only after the loan provider has disbursed the entire home loan amount. However, you will be required to pay the interest i.e. pre-EMI on the partially disbursed loan on a monthly basis, in most cases.
Yes, you can take 2 home loans at the same time provided that your lender approves your eligibility to manage 2 Equated Monthly Instalments (EMIs) at the same time. However, the tax benefits on the second house will be different and you will be required to establish the property as self-occupied or let-out property.
No. Banks/financial institution do not grant 100% of the property value as home loan. Home loan lenders establish a margin on their loan i.e. the percentage of the cost that the lending institution will be covering. For example, if the margin on the loan is set at 10%, the bank will cover 90% of property value. In such cases, you will be required to a make a down payment of the balance amount, i.e. 10% in order to cover for the rest of the cost.
When determining your home loan eligibility, the lender makes sure that your monthly repayments are not being affected by any other ongoing loans such as personal loan, two-wheeler loan, etc. However, other ongoing loans ultimately tend to affect your eligibility as your overall spending power is reduced. If your other loan commitments exceed 50%-60% of your monthly income, your home loan application may be rejected.
For buying a house, a home loan is more suitable due to higher amounts. Personal loans are ideal for non-specific personal needs.
No, availing two home loans for the same property is considered fraudulent and prevented by authorities.
A joint home loan can be availed by adding a co-applicant such as your spouse, parents, or an immediate family member on your application. Adding a co-applicant will increase your home loan eligibility as the lending institution will also be considering the co-applicant's income and credit score when determining your loan eligibility. All co-owners of the property are required to be the co-applicant for a loan. However, the co-applicants need not necessarily be the co-owner of the concerned property.
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