A home loan is a financial product that enables individuals and families to purchase residential property by borrowing from banks or financial institutions. The borrower repays the loan amount along with interest over a specified period, typically ranging from 10 to 30 years. Home loans are designed to make homeownership affordable by spreading the cost across a longer timeframe.
To qualify for a home loan in India, borrowers must meet specific eligibility requirements set by lenders. These criteria vary slightly across banks but generally follow similar guidelines.
| Criteria | Requirement |
|---|---|
| Age | 21-23 years (min) to 65-70 years (max maturity, dependent on employment type) |
| Citizenship | Indian Citizen - Resident or Non-Resident Indian (NRI). |
| Minimum Income (Annual) | Generally Rs. 2.5 lakh to Rs. 3 lakh (varies by city and loan amount). |
| Employment Stability | Salaried (min 1-2 years continuous experience) or Self-Employed (min 3 years business vintage). |
| Loan-to-Value (LTV) | Typically 75% - 90% of the property value. |
| Fixed Obligation to Income (FOIR) | Existing & proposed EMIs must be below 50% - 60% of Gross Monthly Income. |
Your CIBIL score is the most critical factor for approval and for securing favorable interest rates:
| Credit Score | Status | Rate Impact |
|---|---|---|
| 750+ | Highly Favorable | Best rates (0.25% - 0.5% lower) |
| 700 - 749 | Standard Approval | Standard rates |
| 650 - 699 | Conditional Approval | May require a higher down payment or higher rate |
| Below 650 | Difficult | High chance of rejection, though some lenders still accept |
Home loan interest rates can be categorized primarily into two types:
| Bank | Interest Rate Range |
|---|---|
| Karnataka Bank | 7.30% |
| Central Bank of India | 7.35% |
| Bank of Maharashtra | 7.35% |
| Bank of India | 7.35% |
| Saraswati Bank | 7.35% |
| Canara Bank | 7.40% |
| Union Bank of India | 7.45% |
| Bank of Baroda | 7.45% |
| Punjab National Bank | 7.45% - 9.35% |
| State Bank of India (SBI) | 7.50% - 8.95% |
| Bank | Interest Rate Range |
|---|---|
| HDFC Bank | 7.90% onwards |
| Kotak Mahindra Bank | 7.70% - 7.80% |
| South Indian Bank | 7.70% - 7.80% |
| HSBC | 7.70% - 7.80% |
| ICICI Bank | 8.75% - 9.65% |
| Institution | Interest Rate Range |
|---|---|
| LIC Housing Finance | 7.50% onwards |
| ICICI Home Finance | 7.45% - 7.50% |
| Bajaj Housing Finance | 7.40% - 10.25% |
| Tata Capital | 7.75% onwards |
| Aditya Birla Capital | 7.75% onwards |
| Charge | Typical Range | Notes |
|---|---|---|
| Processing Fee | 0.5% - 2% of Loan Amount | Non-refundable; levied upfront. |
| Legal & Valuation Fee | Rs. 3,000 - Rs. 15,000 | For property title verification and assessment. |
| Stamp Duty & Registration | 5% - 7% of Property Value | State-dependent tax, paid to the government. |
| Prepayment Charges | 0% (Floating) to 2-4% (Fixed) | Varies based on the rate type and lender. |
A well-planned repayment strategy can save you significant money and help you achieve financial independence sooner.
Directly reduces the principal, cutting down interest costs that accumulate over decades.
Maintaining timely payments and reducing debt utilization positively impacts your CIBIL score.
Becoming debt-free earlier provides peace of mind and improves your profile for obtaining other loans.
A debt-free status improves your profile for obtaining other loans.
Paying off loans reduces vulnerability to EMI defaults during emergencies.
Start your journey with us today. Fill out the details below.
Note: All logos and trademarks are the intellectual property of their respective owners.