Home Loan

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Home Loan

Home Loan at a glance

A home loan is kind of loan people take from banks and NBFCs to buy, repair, renovate and construct their homes. There are two types of interest rates in home loan- one is fixed interest rate and the other is floating interest rates.

Owning a house is not that easy nowadays. If you have an ancestral house, you have to maintain it. Otherwise you have to buy a flat, house or plot. But the present condition is not helping anything. So if you are planning something about your home or for your home, you have to take a home loan. The interest rate is also low for home loan. And the tenure is also long which will help you to repay the loan.

The most important part is if you repay your home loan timely your CIBIL Score will be also high. That will help you in your portfolio if you apply for loan for the next time. The interest rate of any loan depends a lot on CIBIL so if you have a CIBIL score in the range of 650-850 it will be easier to get any kind of loan.

Why Home Loan? And what are the benefits of home loan?

This question comes often that why home loan? Why you will take home loan if you have an option of personal loan? Because we all know that personal loan is an unsecured loan and home loan is a secured loan. While you are taking a home loan you must mortgage your property to that financial institution. But there are some points you should know why home loan is more preferable for you. Let’s discuss about it.
  • Lowest Interest Rate- When you are getting a personal loan with the interest rate of 15% same time you are getting a housing loan with interest rate of 8% isn’t it attractive? And taking a housing loan is a long term decision so you should check interest rates very carefully.
  • Time- There is so many banks out there offers home loan for a long tenure. Don’t fall for this. Your home loan becomes more expensive with longer tenure. So try to choose tenure which is helpful to you. At the end of the day you have to repay your loan so why should choose longer tenure!
  • Income Tax Act (I)- Here is one of the thing you should know about home loan. When you are paying housing loan, it has two sections- payment of interest and principal repayment. The interest you paid for the EMI of that year can be claimed as a deduction of up to 2lakhs under the section of 24 Income Tax Act 1961.
  • Income Tax Act (II)- The principal portion of EMI you are repaying to bank can be claimed as a deduction of 1.5lakhs under the section of 80C income tax 1961.
  • Apply Online - You can apply offline but the process is not hassle free but when you are applying online the process is hassle free and the documentation will be minimum and our experienced executive will be able to help you on your housing loan and your documents will be picked up from your door step.
  • Transferring Balance
  • Flexibility in Tenor
  • Minimum Documentation
  • Avail easy home insurance

Types of Home Loan

So, you are taking a home loan and you are confused what kind of housing loan you should choose now it’s time to talk about it. It will be lot more easy to you after reading this. It depends what kind of property you are purchasing.
  • Construction (Home Loan)- This is the kind of home loan which is offered to the customer who already have existing piece of land and they need to make a house or home there. If that piece of land was bought from earlier than one year the price of that land will be omitted from that loan amount.
    Construction loans are slightly different from other home loans.
  • Loan for purchasing home- It is the easiest loan in the categories as its names says “Home Loan”. You can avail this loan to purchase a new home or apartment. Most of the banks and NBFCs give this kind of home loan.
  • Loan for Home renovation- This is one kind of home loan people take who already have property and if you want to renovate it your old house you can easily take a loan for home renovation.
  • Loans for Plot- This is the kind of housing loan people take for buying plots and lands. But all Banks and NBFCs doesn’t give this kind of loan.
  • Home Conversion Loan - If you already have a home loan on your head and you have mortgage that house to the bank and then you move out to another house that house will be mortgaged house on bank which is called home conversion loan.
  • B.T. Home Loan In this home loan you can transfer your housing loan from one bank to another. This loan is called Balance Transfer Home Loan. This thing helps you to get better interest rate.
  • Home Loan for NRI NRI home loans are for non resident Indians. This is little bit different from regular home loan.
  • Stamp Duty LoansTo cover up the stamp duty charges this kind of loan is offered from bank.
  • Bridged LoansIf you already have a home and want to buy a new one you can apply for this kind of loan. The tenure of this loan is really short and you have to mortgage that new house till the last day of repaying your loan.

Home Loan Eligibility

There are some eligibility criteria, you have to follow before taking a home loan. Because bank will check your eligibility if you are able to repay your loan or not. So if you are planning to take a loan you should check yourself if you have these eligibility criteria-
  • Age - You are taking a home loan for your dream home so your age should be in 21 to 50. Your loan repayment should be complete between 60 to 65 years.
  • Employment Status- You should be salaried or self employed for getting a home loan.
  • Earning- You should earn at least 5-7 lakhs in a year for getting a home loan. Basically it depends on if you are salaried or non salaried.
  • Living Quarters- You should live in the current residence at least one year to prove your residence. This is a hidden home loan eligibility which matters a lot.
  • On- Going Loans- - Banks and other financial institutions always check that fact if there is any other ongoing loan on your head. So you can repay minimum installment of your loan.
  • Credit Score- Last but not the least you’re Credit Score which matters a lot in your loan eligibility criteria. If you have a credit score of 650-950, it will be very easy to get a home loan on lowest interest rate for you but if your credit score is under 650 it will be a huge problem.

Documents you require for home loan-

  • Identity proof
  • Residence Address proof
  • Income proof
  • Appointment letter and job continuity proof
  • Bank documents- 6 months bank statement, 3 months’ salary slip, 2 years Form 16
  • Investment proof
  • Property documents
  • Cancel Cheque

Documents specific for Salaried/Self-Employed/Senior Citizen

Salaried Self-Employed Senior Citizen
Loan form- Fill loan application form with affix passport size photo. Loan form-Fill loan application form with affix passport size photo. Loan form-Fill loan application form with affix passport size photo.
Address proof- Passport, Registered Agreement of Rent, Any kind of bill up to 3 months (electricity or gas), Leave and License. Address proof- Any kind of utility bill (gas or electricity bill), License. Address proof- Registered Agreement of Rent, Any kind of bill up to 3 months (electricity or gas), Leave and License.
Identity proof- AADHAR card, PAN card, Driving License, Passport. Identity proof- AADHAR card, PAN card, Driving License, Passport. Identity proof- AADHAR card, PAN card, Driving License, Passport.
Income proof-2 years FORM 16, 3 months’ salary slip, Income Tax Report. Income proof- Balance Sheet, Profit & Loss A/C, Report Of Audit, Latest 3 year’s Income Tax return. Income proof- Bank Statement or Pension record.
Bank Statement- for 6 months. Bank Statement- for last 1 year. Bank Statement-
Office address and ownership proof- Maintenance bill, any kind of Utility Bill, Documents of Property Age proof- AADHAR card, PAN card, Passport.
Business Existence proof- License of the company registration, SARAL copy for last 3 years.
Now we are giving a list of Banks and Financial Institutions who give housing loans-
Banks/ NBFCs Maximum Loan amount Maximum Tenure Interest rates Fees and other charges
ICICI Bank ₹3,00,00,000 30 Years 8.35%p.a- 9.45% pea 10,000+ GST as PF + O.20% of the loan amount as MOD charges
Indiabulls ₹30,00,00,000 30 years 8.35% p.a. – 11.50% p.a. 10,000+ GST as PF + O.20% of the loan amount as MOD charges
Aditya Birla Capital ₹10,00,00,000 30 Years 8.55%- 8.99%(floating) ₹5,000 to ₹10,000+ applicable tax
Yes Bank ₹5 crores 25 Years 9.35%-10.50%(floating) 0.5% of loan amount, prepayment charges – 2.5% on the outstanding principal
Fullerton India ₹5 crores 30 Years 8.50%-17% Up to 3% of the loan amount
Capital First ₹25 lakhs 20 years 9%-11.5% 1% (as per agreement)

Home Loan EMI Calculator

We all know that every different bank has different interest rates. But also they have different charges and fees. Now we will talk about those fees and charges.
  • Processing Fee

    - The processing fee is charged by banks and NBFCs for the process of the loan. You won’t get this amount back. This is non refundable. Every bank has different processing fees.
  • Late Payment Charges

    - Let’s appreciate one fact sometimes we all run out of money or sometimes we all have some financial issues that’s why we can’t repay our loan on time. That’s why bank charges some extra money from us as late payment charge.
  • Charges for prepayment

    - Now a day’s maximum banks don’t take any kind of pre closure charges. Basically, pre closure or prepayment charges are if you repay your home loan before the time banks take a charge which is called pre closure charge or prepayment charge.
  • Charges for conversion

    - Bank gives loans either fixed interest rate or in floating interest rate every time you change from fixed interest rate floating interest rate or floating interest rate to fixed interest rate bank charges an interest rate of principal that is the conversion charge.
  • Fee for legal

    - There is a fee for legal which means you have to pay a charge to the lawyer who does all those verifications.
  • Administrative Fee
  • Account Statement

FAQ's

Home Loan is a loan people take from bank or NBFC’s to renovate or buy their home.

You can get a long time to repay your home loan. Though it varies from bank to bank. Approximately you get 25 years to repay your home loan.

No, bank doesn’t give the entire amount they give only the 80% of that amount.

Basically the list is so long but briefly you should be 21 years or more and you should be a salaried or self- employed.

Yes you can take a joint home loan.

Your parents, your spouse and your family members can be joint borrower in home loan.

It takes 10 to 13 days to sanction your home loans if you match the eligibility criteria.

Important Points to remember-
Why sometimes home loans get rejected?

  • If builder doesn’t approved the bank who is offering home loan.
  • If property doesn’t approve.
  • Bad CIBIL Score.
  • Valuation of property.
  • Not having stable employment.
Learn the Interest rate
  • Out there are so many Financial Institutions who are giving home loans. But if you are taking home loan or any kind of loan for the first time you can be make a mistake and can go in a wrong path so your interest rate will be high and you won’t get proper loan for avoiding these kind of issues you should verify your lender before taking a home loan or any kind of loan. And home loan is a long term decision that’s why you have to be more careful about it.