Home Loan
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Home Loan is a loan facility offered by lenders to borrowers for various housing needs such as purchase of a new home, under-construction home, land or plot for building a house or renovating an existing home. This facility is provided at interest rate starting from 8.5% p.a. and a tenure that is up to 30 years for Salaried customers and 20 years for self employed customers.
The government has announced various home loan subsidy schemes like PMAY to encourage the availability of housing loans. Home Loan subsidy scheme is a Credit Linked Subsidy Scheme under which beneficiaries are eligible to get an interest subsidy on their home loan if they apply a loan to buy or construct a house. The subsidy in interest ranges from ₹ 2.30 Lakh to ₹ 2.67 Lakh depending on the income group of the borrower. Recently, RBI has linked home loan interest rates to repo rate and hence, it has been constantly reducing the repo rate in the last few monetary policies to ensure availability of easy loans. Some common features and benefits of home loans that make it a go-to option for fulfilling housing dreams
Features of Home Loans
Home Loan
Home Loan Dec 2020
- Currently, lowest home loan interest rates are starting @ 6.75%
- Housing loan can be availed up to a tenure of 30 years and up to 90% of the property value.
- Instant Home Loan are pre-approved home loans in which the loan amount is decided based upon your income levels and repayment capacity.
- Compare the best online instant home loan offers from top banks in India.
- Estimate your loan eligibility online with Home Loan Eligibility Calculator.
- Apply for a home loan online at Sai Ram Financial and get an attractive cashback upto ₹ 1,000.
Overview
A home loan is a credit facility provided by banks and NBFCs that allows the borrowers to buy or construct a home, by keeping the house as a collateral. Most of the banks finance home loans up to the maximum limit of 90% of the property’s value, wherein the funds are provided by undertaking the concerned house as a security and these funds are provided against the security of that very property for which you have sought finance.
Top Banks Offering Lowest Rates on Home Loan
| Bank | Interest Rates | Lowest EMI Per Lakh |
|---|---|---|
| SBI Home Loan | 8.50% | 769 |
| Axis Bank | 8.50% | 769 |
| HDFC Home Loan | 8.50 | 769 |
| ICICI Bank | 8.50 | 769 |
About Home Loan
Home Loan is a secured loan availed to buy a residential property or construct one. In this loan, the property bought from the loan amount or being constructed is pledged as collateral with the bank. The maximum LTV offered on a home loan is 90%. Currently, it is available at the interest rate starting from 6.75%, for a maximum tenure of 30 years.
How to Apply for Home Loan Online?
Nowadays, there are plenty of options available to apply for a home loan online. You can apply either on the website of the bank or NBFC; otherwise, you can also apply through any online loan marketplace. However, make sure you have assessed your eligibility and conducted thorough research on various rates provided by banks to ascertain, which bank or NBFC would be the best option for you. In case you are finding such assessment hard then you can also Add apply for home loan by following these simple steps:
- You can fill the form appearing at the start of this page by scrolling up. Make sure to fill your personal details like name, pin code, monthly income, and required loan amount correctly.
- After filling all the required details, click on ‘Get OTP’. An OTP will be sent on the number you entered in the form. Enter the received OTP and click on ‘Submit’.
- Now, in the next page, you will be required to give more details regarding your property and the existing financial situation like an ongoing loan, existing EMI, area of the property, type of property, etc. You need to enter all the required details to get customized options of best deals available as per your requirement.
- After filling all the details, click on ‘Get Offers’. Now, you can check details of each offer shown to you and also apply for it right there if you want.
- After that a Sai Ram Financial representative will contact you to confirm your details and discuss your loan requirements. He/she will suggest the right banks and loan offers to you based on your eligibility and also explain the complete home loan process and documents required.
- If you are eligible and interested, our representative will fix an appointment with the bank for document pick-up and further loan process. A bank's representative will contact you and will initiate a verification process.
- After verification of your documents and property and based on your credit history and eligibility, the bank will decide to sanction or reject your loan. If sanctioned, you will receive a sanction letter from the bank mentioning the key loan terms, including interest rate, processing fees, tenure, prepayment charges
- Finally, the sanctioned loan amount will be disbursed to your bank account. The loan amount can be disbursed in one go or in multiple instalments on the basis of your requirement.
Why should you apply for a Home Loan Online?
Applying for a home loan online is convenient and significantly easier than visiting the branch and filling the application form. Besides, you also get to take advantage of various other features which are available only online. Some notable advantages of applying for a home loan online are:
- Comparison of Rates: While applying for the loan online, you can easily compare the interest rates provided by various banks and NBFCs along with processing and any other charges charged by them.
- Home Loan EMI Calculator: You can also use the EMI calculator for a home loan to assess how much EMI you would have to pay on the offer of your choice, and what is the maximum EMI you can afford based on the available offers.
- Eligibility Check: While applying for a home loan online, you can easily assess whether you are eligible for the loan or not based on the eligibility criterion of different banks and NBFCs.
- No Effect on Credit Score: When you apply to a bank directly, your credit history is pulled by the lender to assess your creditworthiness and that pull is termed as ‘hard pull’, and it causes a nominal drop on your credit score. The side effect of this is felt when you apply for a home loan with multiple lenders in a short span of time as it is hard to know the exact eligibility criteria from the outside. However, you can save yourself from such a situation by applying for a home loan online on a loan marketplace platform.
- Doorstep Documents Collection: Many online loan marketplace offers doorstep collection of documents along with some banks and NBFCs. It means you would not have to make multiple visits to the branch to get your loan sanctioned.
- Free Assistance: If you apply online through a marketplace platform, you will also get free assistance at every step of your home loan journey until it is disbursed.
Benefits and Features of Home Loan
Some key benefits and features of Home Loan are:
- Tax Savings: It is one of the most important benefits of availing a home loan. Under Section 80C you get a maximum ₹ 1.50 Lakh of limit to claim a deduction for home loan principal amount paid in a financial year. Under Section 24(b) you can claim up to ₹ 2 Lakh as a deduction for the interest on the home loan paid in a financial year.
- Affordable: Most people cannot arrange the complete amount required to buy or construct a house. The home loan provides them with an affordable alternative to realize their dream and also not put too much pressure on their financials. The long tenure of home loan is a great contributor in this regard.
- Low-Interest Rate:Compared to other loan types, the interest rates on home loans are the lowest. This again makes the option of availing home loans more viable and smart.
- No Prepayment Charges: As per the directives of RBI no bank or NBFC can charge a fee if you choose to prepay your home loan from your own funds.
- Balance Transfer: After availing a home loan from one lender if later on, if you discover that some other lender is offering much lower interest rates than your current lender then you can choose to transfer your home loan to another lender as well.
Top Home Loan Providers
| Bank | Home Loan Rate | Processing Fee |
|---|---|---|
| SBI | 8.50% | 10,000/- + GST |
| Axis Bank | 8.50% | 10,000/- + GST |
| HDFC | 8.50% | 10,000/- + GST |
| ICICI Bank | 8.50% | 10,000/- + GST |
Home Loan Eligibility
The eligibility criterion for home loan differs with each lender to some degree. However, the basic eligibility criterion is as follows:
- Age :Anyone within the age group of 18-70 years can avail a home loan.
- Monthly Income: The net monthly income must be above ₹ 25,000 for both salaried and self-employed.
- Work Experience: For salaried individuals, minimum work experience of 3 years is required.
- Business Stability: In the case of self-employed individuals, a business age of 5 years or more is required.
- Income-EMI Ratio: Your total EMIs from all credit cannot exceed 65% of your net monthly income. Thus, assess your ongoing credit properly before applying for a new loan.
- Credit Score: In case you have a credit history, then a minimum credit score of 650 is required. In case you are new to credit, then you can straight away apply for the home loan if you are meeting other eligibility criteria.
- Co-applicants: A maximum of 3 earning members of a family can be added as co-applicants to increase the eligibility for availing a higher loan amount.
Documents Required for Home Loan
In the case of home loan documentation part is important, thus make sure you have all the following documents ready with you before applying for the loan.
- Identity Proof: Aadhaar Card/PAN card/Passport/Driving License/Voter ID/Government Issued card.
- Address Proof: Election ID card/Passport/Driving License/Electricity/ Telephone/ Mobile bill/ bank statement (not more than 3 months old).
- Age Proof: PAN card/Birth Certificate/Employee ID card/Driving License/Voter ID/College leaving certificate.
- Income Proof: For Salaried - Form 16, last 6 months bank statement, latest 6 months salary slip. For Self Employed - Last 2 years ITR, and latest 6 months bank statement.
- Property Documents: Conveyance deed, Sales deed, Allotment letter, Possession letter, Latest property tax receipt, Copy of approved plan for construction loan/ extension.
FAQs
1. Why should you take a Home loan?
The home loan is a secured credit against the residential property you want to buy or construct. You can use a home loan to buy your dream house and repay it while taking the benefit of tax saving on a home loan.
Do I need to provide any security to apply for a Home loan?
Yes, the property you buy or intend to construct from a home loan is taken as security by the bank.
How can I get a Home loan instantly?
You can apply for a pre-approved home loan in which you are sanctioned an amount based on your income level and later on when you decide your property you can then get the loan instantly.
What is the tax benefit on a home loan?
As per Section 80C of Income Tax Act, 1961, you can get up to ₹ 1.50 Lakh as the deduction for repayment of home loan principal amount. Similarly, under Section 24(b) you can get a deduction up to ₹ 2 Lakh for payment of home loan interest in a financial year.
What is the minimum salary for a home loan?
To avail home loan minimum net monthly income required is ₹ 25,000 or more.
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