Home Loan
Banks and Housing Finance Companies (HFCs) provide home loans ranging from 75% to 90% of the property’s value, depending on the creditworthiness of the loan applicant. These ratios are subject to the prescribed limits set by both lenders and the Reserve Bank of India (RBI). Home loan tenures can be as long as 30 years, and Bajaj Housing Finance even offers a maximum tenure of up to 40 years. At Paisabazaar.com, we facilitate the comparison of housing loan interest rates and features offered by top banks and HFCs. You can conveniently apply online for the most suitable option based on your credit profile.
Varieties of Home Loans
Home Purchase Loan
A Home Purchase Loan is designed to facilitate the acquisition of various types of properties, including ready-to-move-in properties, under-construction properties, and pre-owned homes or resale properties. This financing option not only assists in purchasing residential plots but also supports the construction of a house on the acquired plot within a specified timeframe.
Composite Loan
A Composite Loan is accessible for individuals aiming to acquire a plot and construct a house on it. The initial disbursement in a composite loan is allocated for the purchase of the plot. Subsequent disbursements are contingent on the various stages of the house construction process.
Home Construction Loan
A Home Construction Loan is extended to individuals specifically for the purpose of constructing a house. Disbursements in this type of loan are contingent upon the different stages of the house construction process.
Home Renovation/Improvement Loan
A Home Renovation/Improvement Loan is intended to cover the expenses associated with enhancing or renovating an existing house. Typically, the interest rate for a home renovation/improvement loan is the same as that for a regular home loan.
Home Extension Loan
A Home Extension Loan caters to individuals in need of financial assistance for expanding or adding more space to their current residence. In such loans, lenders typically provide 75% to 90% of the construction estimate, varying based on the loan amount and Loan-to-Value (LTV) ratio.
Interest Saver Loan
An Interest Saver Loan is a type of home loan overdraft where the borrower’s home loan account is connected to their bank account. Any funds deposited in the bank account beyond the Equated Monthly Installment (EMI) are treated as a prepayment towards the loan, resulting in savings on the overall interest amount.
EMI Calculator
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Calculator Disclaimer
The repayment amount shown using this calculator is an estimate, based on information you have provided. It is provided for illustrative purposes only and actual repayment amounts may vary. To find out actual repayment amounts, contact us. This calculation does not constitute a quote, loan approval, agreement or advice by My Finance. It does not take into account your personal or financial circumstances.
Criteria for Obtaining a Home Loan
While home loan eligibility criteria can vary among lending institutions and loan programs, a standard set of criteria commonly includes:
- Nationality: Open to Indian residents, Non-Resident Indians (NRIs), and Persons of Indian Origin (PIOs)
- Credit Score: Ideally 750 and above
- Minimum Age: Typically 18 years, with some lenders requiring a minimum age of 21 years Generally up to 70 years at the loan maturity date, although certain lenders may extend the tenure until 75 years of age
- Work Experience: Minimum of 2 years for salaried individuals
- Business Continuity: Minimum of 3 years for self-employed individuals
- Minimum Salary: At least Rs. 25,000 per month (varies among lenders and locations) Loan Amount: Up to 90% of the property value
Necessary Documents for Home Loan
Personal loan providers necessitate the submission of documents from applicants to verify identity, income, loan repayment capability, and residential address. The required documents are generally consistent among lenders. The following is a common set of documents you’ll likely need to provide when seeking a personal loan:
Proof of Identity:
- Passport
- Aadhar Card
- Voter ID
- Driver’s License
Proof of Address:
- Utility Bills (electricity, water, gas)
- Rental Agreement
- Passport
Income Proof for Salaried Individuals:
- Salary Slips
- Form 16
- Bank Statements
Income Proof for Self-Employed Individuals:
- Income Tax Returns
- Profit and Loss Statements
- Business Registration Documents
Employment Proof:
- Offer Letter
- Employment Certificate
- Appointment Letter
Property Documents:
- Sale Deed
- Property Tax Receipts
- NOC from relevant authorities
Bank Statements:
- Recent Bank Statements
- Savings Account Statements
Photographs:
- Passport-sized photographs
Credit Score:
- Credit Report
These requirements can vary slightly depending on the lender, so it’s advisable to check with the specific institution for their exact document specifications.
Tax Benefits on Home Loans
Tax benefits on home loans can be significant and are subject to the prevailing tax laws in your country. Generally, here are some common tax benefits associated with home loans:
Tax Deduction on Home Loan Interest:
- Many countries allow tax deductions on the interest paid towards the home loan. This deduction is often available on the self-occupied property.
- The maximum limit for interest deduction may be specified, and it can vary based on factors like the loan amount and the purpose of the loan (purchase, construction, or renovation).
Tax Deduction on Principal Repayment:
- Some countries provide tax benefits on the principal amount repaid during a financial year. This deduction is often covered under a separate section of the tax laws.
Joint Home Loan Benefits:
- In case of a joint home loan, co-borrowers can individually claim tax benefits on both the interest and principal repayments, subject to certain conditions.
First-Time Homebuyer Benefits:
- Some regions offer additional tax benefits or concessions for first-time homebuyers. These benefits may include higher deductions or reduced tax rates.
Tax Benefits for Affordable Housing:
- In certain countries, there are specific tax incentives for affordable housing, such as increased deductions for interest and principal repayments.
Under-Construction Property Tax Benefits:
- Tax benefits on home loans for under-construction properties may be available only once the construction is complete.
Home Loan for Renovation or Repair:
- Tax benefits may also be applicable if you have taken a home loan for renovation or repair of an existing property.
It’s essential to check the current tax laws and regulations in your country, as they can change over time. Additionally, consulting with a tax advisor or financial expert is advisable to ensure accurate and up-to-date information tailored to your specific situation.
