This is dream of every individual to buy own home with lowest interest rates available in the market. There are lot of public sectors , private sectors banks, and financial institution who can provide you affordable home loans. We team Credit Bajar has bring you a complete information to get your dream home at lowest interest rate. Credit Bajar will clear all your doubts & misconception about Home Loan and help to get lowest and affordable home loan.
Age
The minimum age to avail home loans in India is 21 to 60 for Salaried class. And 21 to 65 for working professional like Doctors, Engineers, Advocates, CA, Self-Employed Business man. These ranges are mostly common for PSBs, Private Sector Bank & NBFC (LIC Housing Finance Company, etc)
Income
An Average salary or monthly income should be more than 20,000.00 (Twenty Thousand only). Many private financial institutions or small finance banks provide homes loans to marginalized class people with high rate of interest. Higher the income lower will be the risk and banks will easily provide you home loan at lowest interest rates.
Employment Status
Many PSBs and Private Sector Bank’s require minimum 1 year permeant employment if applicant is salaried person to avail home loan. However, this Claus may vary from bank to bank. It is observed that in many cases deviation has been taken from higher authority to deviate this Claus. In case of Business class person minimum there should be at least 2 years running business entity require.
Down payment or Margin Money
Down payment or margin money for home loan varies from bank to bank. Generally, it is 10% for housing loan up to 30 Lakh, 20% up to 70 lakh and 30% above 70 Lakh.
Components consider for Home Loan
Home loan amount calculate on Registered value of the agreement between you and builder or owner of the property. However, bank may include cost of interior design, furniture, parking cost, repair and renovation of the old house/flat etc.,
To mitigate the bank risk, credit life insurance premium also includes (during the loan tenure if any mis-fortune happens with the borrower then insurance company will pay the outstanding or remaining amount towards applicant directly to the bank and remaining amount will go the nominee)
Government registry charges, mortgage charges, stamp duty, general property insurance premium will not be a part of home loan.
Sources of Income
It is observed that permeant nature of income like salary, business, working professional are preferred by the banks. Banks desist to give housing loan on income from Beauty Parlor, Coaching Class, freelancer income, etc. A Sound, regular sources of income will get you home loan on lowest interest rates.
Purpose of Housing
Banks and NBFC are provide home loans to purchase readymade house, flats, penthouse, row house, under construction flats, row house, for construction of house, row house, for purchase of plot plus construction there on, Take over housing loan from one bank or financial institutions to other (Balance Transfer) plus top-up loan thereon.
Deduction Norms
This is most important aspect of home loan, lets illustrate by an example;
Mr. Rohit Kohali is salaried person in private limited company at Pune, having monthly salary gross salary of Rs. 1,00,000/- (One Lakh). However, as per his salary slip there are some mandatory deductions like, Provident Fund, Professional Fund, Income Tax, Insurance Premium, etc which is 20,000/-
Now, many banks have deductions norms up to 60% to 70% on gross salary of the applicant. In this case let’s say 65% total deduction norms. Therefore, including proposed EMI, existing other loan installments if any & current mandatory deductions from salary slips bank can maximum deduct 65,000/-.
| A | Gross Salary | 1,00,000/- |
| B | Salary Mandatory Deductions | 20,000/- |
| C | Total Permissible Deductions | 65,000/- |
| D | Other Loans EMI like Personal, Car, Education in CIBIL report | 15,000/- |
| E | Total Deductions (B+D) | 35,000/- |
| F | Amount available for proposed Housing EMI (C-E) | 30,000/- |
This deduction norms are not applicable to self-Employed Business, working professional, there net income in the balance sheet is already calculated by deducting salary wages, admin expenses, loans EMI.
Credit Score
Our team strongly suggest to maintain the Good CIBIL score for better financial health which is widely red carpet welcomed by banks and financial institutions.
This is foremost important factor in deciding your rate of interest in housing loan and check your credibility. Generally, CIBIL score of greater than 700 will be accepted widely by all banks and NBFC. The higher your CIBIL score lower will be applicable rate of interest this is inversely proportional to your CIBIL score. A good CIBIL provides you lowest home loan interest rates.
Interest Rate
Every individual is expecting of lowest interest rate while availing housing loan. Home loan interest rates can widely vary depending on the applicant’s credit profile, income and the lenders’ credit policies. Hence, one should always compare the interest rates offered by as many lenders as possible before applying for a home loan. Please find the indicative housing interest rates of some premier Banks and NBFC in India.
Public Sectors Banks Home Loan Interest Rate
| Name of PSBs | Up to Rs. 30 Lakh | Above Rs. 30 Lakh & Up to Rs. 75 Lakh | Above Rs. 75 Lakh |
| Bank of Baroda | 8.40% – 10.65% | 8.40% – 10.65% | 8.40% – 10.90% |
| Punjab National Bank | 8.45% – 10.25% | 8.40% – 10.15% | 8.40% – 10.15% |
| Punjab & Sind Bank | 8.50% – 10.00% | 8.50% – 10.00% | 8.50% – 10.00% |
| State Bank of India | 8.40% – 10.15% | 8.40% – 10.05% | 8.40% – 10.05% |
| Union Bank of India | 8.40% – 10.80% | 8.40% – 10.95% | 8.40% – 10.95% |
| Bank of India | 8.30% – 10.75% | 8.30% – 10.75% | 8.30% – 10.75% |
| UCO Bank | 8.45% – 10.30% | 8.45% – 10.30% | 8.45% – 10.30% |
| Bank of Maharashtra | 8.50% – 11.15% | 8.50% – 11.15% | 8.50% – 11.15% |
| Canara Bank | 8.50% – 11.25% | 8.45% – 11.25% | 8.40% – 11.15% |
| Indian Overseas Bank | 8.40% onwards | 8.40% onwards | 8.40% onwards |
Private Sector Banks Home Loan Interest Rates
| Name of Private Banks | Up to Rs. 30 Lakh | Above Rs. 30 Lakh & Up to Rs. 75 Lakh | Above Rs. 75 Lakh |
| HDFC Bank Ltd. | 8.35% onwards | 8.35% onwards | 8.35% onwards |
| Kotak Mahindra Bank | 8.70% onwards | 8.70% onwards | 8.70% onwards |
| ICICI Bank | 9.00% – 9.80% | 9.00% – 9.95% | 9.00% – 10.05% |
| Axis Bank | 8.70% – 13.30% | 8.70% – 13.30% | 8.70%- 9.10% |
| Karur Vysya Bank | 9.23% – 10.73% | 9.23% – 10.73% | 9.23% – 10.73% |
| South Indian Bank | 9.57% – 10.97% | 9.57% – 10.77% | 9.57% – 11.42% |
| Karnataka Bank | 8.75% – 10.43% | 8.75% – 10.43% | 8.75% – 10.43% |
| Federal Bank | 8.80% onwards | 8.80% onwards | 8.80% onwards |
| Dhanlaxmi Bank | 9.35% – 10.50% | 9.35% – 10.50% | 9.35% – 10.50% |
| Tamilnad Mercantile Bank | 9.45% – 9.95% | 9.45% – 9.95% | 9.45% – 9.95% |
| Bandhan Bank | 9.15% – 15.00% | 9.15% – 13.32% | 9.15% – 13.32% |
| RBL Bank | 9.15% – 11.55% | 9.10% – 11.30% | 9.10% – 11.30% |
NBFCs Home Loan Interest Rate
| Name of NBFCs | Up to Rs. 30 Lakh | Above Rs. 30 Lakh & Up to Rs. 75 Lakh | Above Rs. 75 Lakh |
| LIC Housing Finance | 8.40% – 10.35% | 8.40% – 10.55% | 8.40% – 10.75% |
| Tata Capital | 8.70% onwards | 8.70% onwards | 8.70% onwards |
| Bajaj Housing Finance | 8.50% onwards | 8.50% onwards | 8.50% onwards |
| PNB Housing Finance | 8.50% – 14.50% | 8.50% – 11.45% | 8.50% – 11.45% |
| Repco Home Finance | 9.50% onwards | 9.50% onwards | 9.50% onwards |
| GIC Housing Finance | 8.80% onwards | 8.80% onwards | 8.80% onwards |
| Indiabulls Housing Finance | 8.75% onwards | 8.75% onwards | 8.75% onwards |
| Aditya Birla Capital | 8.80% – 14.75% | 8.80% – 14.75% | 8.80% – 14.75% |
| ICICI Home Finance | 9.20% onwards | 9.20% onwards | 9.20% onwards |
| Godrej Housing Finance | 8.55% onwards | 8.55% onwards | 8.55% onwards |
| L&T Finance Limited | 8.60% onwards | 8.60% onwards | 8.60% onwards |
Loan Tenure & Moratorium Period
Generally, all Banks & NBFC are providing 30 years or 360 months of loan tenure depending upon age of the customer. In most of the cases loan tenure should not go beyond 75 years of age. Lower the age at higher will be home loan quantum.
In case of under construction property like flats or individual house moratorium period varies from 12 months to 60 months, depending upon construction state of the site.
Documents required to avail Housing Loan
| Sr. No. | Documents |
| 1 | Pan Card, Adhar Card, Driving Licenses, Voter Card, Passport, Company ID Card, etc., Widely Pan card and Adhar card mostly accepted documents in all financial institutions |
| 2 | 3 current months salary slips in case of salaried account only |
| 3 | 2 Year latest Form No.16 or ITR in case of in case of salaried class or 2 year latest ITR along with Balance sheets for self-employed or working professionals. |
| 4 | Search Report from banks panel advocate and valuation from panel Engineers (This part is taken care by the financial institute) |
| 5 | Property related documents: – In metro and urban cities mostly building are already pre-approved by banks, therefore, this part is also taken care by the financial institute. In case of where applicant want to construct the individual house or bungalow, then please find the list; Non-Agriculture Land order i.e NA Order by the competent authority. Khasara or 7/12 Number of properties Property Card Sanction permission and sanction Map of the proposed property. Previous Sale Deed of the property. |
Loan Processing & other fees
In the current competitive market, all banks are offering zero processing fees to all their prospective clients for home loan. But it may vary from 0.25% to 0.5% of the loan amount. Generally, it is found that, many banks are providing zero processing fees to their existing salary account holder, MSEM borrower, etc.,
Many banks apply other hidden charges like documentation, inspection, Mortgage charges creations, etc., to their customers. Before availing housing loan our readers are requested to read the about hidden charges carefully.
Home Loan Insurance
Many home loan borrowers are having confusion about taking insurance while availing this facility. Let’s discuss, there are two types of insurance in housing loan;
First is property insurance which mandatory by the RBI which may realize after fire, earth quack, theft, burglary etc. Having small premium amount for which premium debited from your account for lifetime or for 10 years.
Second is credit life insurance which linked to credit risk in case of death of housing loan borrower. Insurance company credit the outstanding amount to Financing institution and remaining amount to nominee of the customer.
In case where there is single bread earner in family, we strongly suggest to go for credit life plan to reduce the risk.
Time Period for processing of Housing loan
In most of the case 1 to 3 weeks of time frame require to sanction the Home loan case. It also depends of case-to-case basis.
Where do I submit Loan Home Loan Application
In the current competitive market, almost all banks have appointed their Direct Selling Agents in all cities and small towns to scout the proposal.
In case of purchasing of flats or row house, builder suggest 3 to 4 tie-up banks. Otherwise, one can visit their own bank where he is maintaining his saving or current account from many years.“
Conclusion
To conclude, a home is an important and long-term financial investment that needs careful consideration. It is essential to know various criteria to get lowest home loan interest rates before taking a decision. Aforementioned, information is get you home loan with lowest interest rates. It is possible that you can take a shrewd choice and select a property that is suitable for your specific needs. Be aware that a home loan is in the long run and it’s important to select property, banks or financial institutions wisely.
