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Home Loan
Make your dream home a reality with our leading home loan services. Urban Money has tied knots with an array of banks providing nimble and hassle-free mortgage loans. Unlock home credit loans with a host of benefits, like low housing loan interest rates and smaller EMIs to space out your payments over a longer tenure.
All Bank Name
- PNB home loan
- Axis Bank
- ICICI Bank
- LIC Housing Finance
- Bank of Baroda
- Union Bank of India
- Kotak Mahindra Bank
- Canara Bank
- SBI HOME LOAN
- Aditya Birla
- Bajaj Housing Finance Limited
- State Bank of India
- Tata Capital
- Bank of Maharashtra
- IIFL
- IDFC Bank
Home Loan Features and Benefits
Home loan offers numerous benefits to the borrower including lower interest rates, tax benefits, flexible repayment time frame and much more.
1) Attractive Interest Rates
Home loans are accessible at lower interest rates than other types of loans. Obtaining a home loan is better than going for any other loan type to purchase your dream property. Housing loans are offered at cheap interest rates since the lenders do not want to deal with missed EMIs and unpaid dues.
2) Due Diligence Of the Real Estate Property
The finest aspect about housing finance is that the bank will carry it out if you missed out to determine the property’s validity. Furthermore, while evaluating the house loan documentation, bank employees conduct legal checks to verify that the borrower is not defrauded. Due diligence evaluates areas where the bank approves the transaction and alerts you if your property purchase is risky in any aspect.
3) Tax Benefits With Housing Loan
People who have mortgages are eligible for income tax benefits. The deduction of income tax is a fantastic benefit of getting a property loan. It is available for the interest paid on a yearly basis. The amount of interest paid is subtracted from the income tax that must be paid.
4) Flexible Home Loan Repayment Period
Another feature that distinguishes a home loan from other types of loans is the payback period. You can request longer payback terms whenever it is most convenient for you. One can stretch the loan repayment tenure up to 25 to 30 years. The monthly instalments decrease as the repayment period lengthens, easing the EMI burden on the borrower.
5) Availability of Home Loan Balance Transfer
A housing loan allows you to transfer the remaining loan balance from one lender to another. There could be a variety of reasons for this, including interest rates, service fees, an unpleasant customer experience, among others.
6) Capital Growth
As per real estate data, the cost of properties has been constantly rising over the last decade. According to analysts, the capital appreciation of the real estate properties is significantly greater as compared to the paid interest amount. It therefore serves as a lucrative opportunity for property owners as now they can sell them for a higher profit.
Home Loan Overview
A home loan or mortgage loan is a set amount of money borrowed from NBFCs and banks to purchase a property. Purchases of apartments, new houses, and plots are eligible for house loans whereas for renovations, extensions and repairs of an existing home, you can opt for a home loan for renovation purposes. However, when choosing such products, scrutinise home loan interest rate so that the EMI amount doesn’t weigh you down.
Skyrocketing real estate prices encourage people to take out a mortgage to become homeowners. The most important aspect of a home loan is that when you get it, the lender keeps your property as a mortgage. You must pay the debt amount through monthly instalments to gain complete ownership of the property. The house loan EMI is calculated by the lender using a home loan calculator or home loan cal.
Home Loan Tax Benefits
The repayment of a home loan consists of two parts: repayment of the principal amount and the interest rate. When filing income tax returns, these parts are claimed as a home loan interest deduction or a tax deduction.
Section 80 EEA allows you to claim tax benefits for the interest component paid on a house loan. This part offers house loan borrowers tax incentives of up to INR 1.5 lakhs on the interest rate they must pay.
| Particulars | Quantum Of Amount Deduction |
| Under Section 24 | a. For self-occupied property: Rs. 2,00,000b. For non-self occupied property: No set limit |
| Under Section 80 C | a. For self-occupied property: Rs. 1.5 Lakhsb. For non-self-occupied property: Rs. 1.5 Lakhs |
| Under Section 80 EEA | a. For self-occupied property: Rs. 1.5 Lakhsb. For non-self-occupied property: Rs. 1.5 Lakhs |
Home Loan Eligibility Criteria
Banks and finance companies have pre-determined home loan eligibility criteria to verify and provide maximum ease to loan borrowers. Apart from the eligibility criteria, banks look at the applicant’s credit history to establish creditworthiness and repayment patterns.
- Applicant must be between 21 to 65 years
- Salaried or self employed
- Annual income
- Collateral security
- Assets, financial stability and occupational continuity
- Residence status (Indian or NRI)
Reasons of Home Loan Rejection
Some of the home loan rejection reasons are given below:
- Unpaid dues and other ongoing debts
- Applicant’s address present on the defaulter’s list
- Applicant’s age does not come within the eligible age range
- Credit score below 600
- Multiple rejected loan applications
- Frequent job change
- Faulty repayment of ongoing debts
- Absence of required documents
How to Close Existing Home Loan?
A home loan can be closed either on the completion of the repayment tenure when you have successfully paid the entire loan amount or via foreclosure.
If your repayment tenure is completed, you just need to visit the lender and fill out the required form for loan closure. Once you are done, the lender will provide you with the loan closure certificate and your property documents that were kept as mortgages at the time of loan approval.
If you have decided to repay the loan amount before completion of loan tenure, i.e. loan foreclosure, you will have to pay associated foreclosure charges.
Once you pay the outstanding amount and the foreclosure, your debts will be cleared. The bank will process your foreclosure application and provide you with a loan closure certificate.
Home Loan: Service Charges And Fees
Following fees and charges are associated with home loans throughout the loan tenure:
| Processing Fees | It is a one-time charge that the borrower is liable to pay to the bank or finance provider. Processing fee is charged for recovering the expenses incurred to process the home loan. It is non-refundable and is paid in advance. |
| Application Fees | It is also termed as administrative fee or login fee. The administrative fee is non-refundable and is charged before applying for a home loan. It is charged prior to loan approval. It can range from Rs. 2,500 to Rs. 6,500. In case of loan approval, the applicant will have to pay the applicable processing fee which will be computed after deducting this amount. |
| Prepayment or Foreclosure Charges | Lenders also term it as Pre Closure Charge or home loan closure charges. Home loan prepayment charges are applicable when a borrower decides to pay the loan amount in one go prior to the end of their tenure. Many banks and financial institutions don’t charge foreclosure fees specifically for floating-rate loans. It can range from 2 to 6 percent of the remaining loan amount. |
| Partial Prepayment Charges | Banks usually impose this charge when the borrower pays off a specific part of the outstanding balance amount. Afresh, floating interest rate home loans are exempted from this charge. If applicable, the part-payment charge varies from 0.5 to 2% of the outstanding loan amount. |
| Conversion Charges | Also known as Switching Fee, conversion charges are applicable when the borrower converts the floating-rate loan to a fixed-rate loan or vice versa. |
| Repayment Mode Swap Charges | This charge is imposed when you opt for a changed repayment method and dates. The charged amount for every request is Rs. 500. |
| Max Tenure of Any Home Loan | All major lenders offer house loans with a maximum repayment tenure of 30 years. The longer the repayment tenure, the lower the monthly instalments, which makes a loan tenure of 25 to 30 years quite appealing. |
| Maximum / Minimum Loan Amount From Bank | The maximum and minimum home loan amount that banks offer depends upon the property costs as per current market trends. At maximum you can get 85% of the property cost as loan amount based on property location, and your credibility. At minimum, you can loan 75% of the property price. |
Types of Home Loan
A housing loan isn’t simply for the purchase of a house. There are several types of home loans, and each has different interest rates.
1) Home Construction Loan
Many prefer to build their own homes rather than buying one. In such cases, the loan amount is determined by the overall building cost, the property’s age and any additional charges. Another benefit is that the entire loan amount can be accepted all at once or in instalments as needed. The rate of interest is determined by the loan amount and typically ranges from 6.85 to 9.50 percent.
2) Home Loan
The bank will lend the borrower up to 85 percent of the house’s cost at an interest rate ranging between 9.85 to 11.25 percent. This form of home loan is available from almost all banks that offer loans.
3) Land Purchase Loan
This is an option that banks and NBFCs offer to borrowers. The bank will lend up to 85 percent of the land’s value, with an interest rate ranging from 6.75 to 12.09 percent, depending on the area and credit score. Land is a good investment since a home can be built later after saving money. Additionally, land purchase loans are available at lower interest rates compared to other loan products.
4) Home Improvement Loan
A home renovation loan can be used to remodel your property. It can be used for a variety of purposes, including repairing flaws, painting, updating home interiors, waterproofing and much more.
Required Home Loan Documents
To avail of a home loan with utmost ease, you need to prepare the below depicted documents:
Required Home Loan Documents
To avail of a home loan with utmost ease, you need to prepare the below depicted documents:
Documents for Identity Proof
| PAN and Aadhar Card | Applicant’s Passport |
Documents for Address Proof
| Utility bills (electricity or telephone bill) | Salary slips of last 6 months and Form 16 |
| Identity proof that contain address, like Aadhaar Card | Bank account statements |
| Income proof and employment proof |
Other Documents
| Passport-size photographs of the applicant | For self-employed, business continuity proof will be required (5 years) |
FAQs
From refinancing to reducing your interest, we have the answers right here.
What is the EMI for a Rs. 20 lakhs home loan?
The EMI for a Rs. 20 lakh home loan will depend upon the interest rate offered by the lender and loan repayment tenure.
Which bank is best for applying for a home loan?
There are multiple premium banks (both private and public) in India offering attractive home loans and associated products. Some of them include HDFC, ICICI, Axis, and SBI.
How much home loan can I get on a Rs. 30,000 salary?
With a salary of Rs. 30,000, you can avail of a home loan of upto Rs. 20.50 lakh based upon your credibility.
What is the EMI for a Rs. 10 lakhs home loan?
The EMI for a Rs. 10 lakh home loan will fall somewhere between Rs. 8,000 and Rs. 10,000, based on chosen tenure and applicable interest rate.
What credit score is required to get a home loan?
A credit score above 700 is mandatory to avail of a home loan at an attractive interest rate.
How do I calculate the EMI on a home loan?
You can either compute the EMI through the mathematical formula i.e. EMI = {P x (R/100) x (1+R/100)^n} / {(1+R/100) ^n-1} or via home loan EMI calculator.
How do I get a housing loan without a pay slip?
Numerous banks and finance providers offer home loans without payslips. However, you will have to provide bank statements, income proofs and PAN card details.
Do I have to pay off all my credit card loans to get a home loan?
Yes, it is recommended to pay off your dues before applying for a home loan for easy approval.
Yes, it is recommended to pay off your dues before applying for a home loan for easy approval.
Yes, a home loan is a tax-saving deduction. It is part of Section 80C of the Income Tax Act that states the borrower is entitled to a tax deduction, notably for the amount being paid as prepayment of the mortgage loan. An individual can claim up to Rs. 1.5 lakh as tax deductions.
Can I get a 100% home loan?
The maximum loan to value ratio in India remains at about 90%. Various lenders offer loans up to this amount. However, depending on the creditworthiness of the borrower, banks may also provide 70% to 90% of the loan amount with respect to the value of the property.
How many Indians take home loans?
Home loans are a very popular option for Indians. And for many, it is a necessity as well. As per recent research done in the year 2021, 90% of Indians have availed of a home loan scheme. Moreover, the most popular price range was for houses under INR 35 lakh.
Is taking home loans good?
Taking home loans can benefit an individual for various reasons. They can purchase a new house, renovate an existing house, purchase a plot for construction, or rebuild a house. With several financial institutions in place, the interest rates are always competitive, giving customers the advantage of availing of a home loan within their budget as well.
What should be the minimum salary to get a home loan?
The minimum salary requirement varies from bank to bank. However, in general, banks prefer their customers to have at least INR 15,000 to INR 25,000 per month in salary. This is mainly to establish their creditworthiness.
Can home loan principal be claimed in 80C?
Yes, home loan principal can be claimed under Section 80C of the Income Tax Act of 1961. The maximum amount one can claim remains at INR 1.5 lakh per annum.
Can a home loan be taken for a land purchase?
Yes, one can apply for a home loan for land purchase, given that the land will be used for residential purposes only. Moreover, there need to be documents showing the construction of a residential building has been approved or is already in progress.
Can home loans be restructured?
Banks offer the provision to their borrowers to avail of the benefit of home loan restructuring. One can get this benefit if they are facing financial difficulties. This provision allows borrowers to avoid any EMI defaults. However, one must present valid reasons approved by the lenders in order to be able to enjoy the benefits of the policy.
Can a home loan be taken for renovation?
Yes, many individuals take home loans to also finance their home renovation plans. However, they should consider researching before applying for a home loan to get the best loan interest rate that suits their budget.
Can we increase the home loan tenure?
As notified by the Reserve Bank of India, borrowers have the provision to request a home loan tenure extension. They may do so to extend their repayment period and avoid any loan defaults.
Can home loans be cancelled after sanction?
A loan sanction can be cancelled by both the borrower and the lender. In the case of the borrower, they should apply for a cancellation, preferably, before the loan amount is disbursed. However, the lenders can also cancel a home loan sanction in the event of any missing documents or procedural discrepancies.
What is the maximum age for a home loan?
The maximum age to apply for a home loan generally varies from bank to bank. Usually, individuals can be of a maximum age of 65 to apply under the senior citizen loan scheme policies.
Can I take out three home loans?
In India, the number of loans that can be taken by an individual is not legally defined. So, borrowers can apply for multiple loans from different banks. However, it should be noted that one should carefully consider their financial situation before proceeding with the application.
