Overview

Home loan help you realise your dream of owning a house without breaking your savings and investments or impacting your other important financial goals such as children’s higher education and retirement. It comes with a host of benefits and features, including high-value financing of up to Rs. 10 crore, low interest rates, flexible repayment tenure of up to 30 years, annual tax benefits, PMAY subsidy of up to Rs. 2.67 lakh, balance transfer facility and top-up loan facility. Housing loans can also be availed by those who need funds to construct a house or expand, repair and renovate an existing property.As the home loan market is crowded, finding the best home loan offer can be challenging. At Crustcorporate.com, we help you compare, select and apply for the best home loan rates from India’s top Banks and Housing Finance Companies (HFCs). We provide comprehensive information on home loans along with the convenience to apply for home loan online and get an instant conditional e-Approval in just a few steps.

Home Loan Features & Benefits

Home loan benefits vary across different lenders and loan schemes. Some of the common home loan features ones are listed below:

Low Interest Rates: Banks and financial institutions offer reasonable and attractive interest rates to make home loans more affordable*.

Flexible Loan Tenure: Home loan repayment period usually extends till 30 years, giving you a benefit of lower EMIs and a greater flexibility of repayment.

Annual Tax Benefits: Claim a total tax deduction of about Rs. 5 lakh on the principal and interest components of your housing loan (under section 80C, 24b and 80EEA).

Interest Subsidy under PMAY: First-time homebuyers can save up to Rs. 2.67 lakh on interest through Pradhan Mantri Awas Yojana (Urban) Credit Linked Subsidy Scheme.

Home Balance Transfer Facility: In home loan balance transfer, you can refinance your existing home loan to another lender offering lower interest rate or better loan terms.

Top-up Loan Facility: In top-up loan facility, you can borrow additional sum over and above your existing home loan and use it for any personal or business purposes.

*Terms and Conditions apply

Home loan eligibility differs across lending institutions and loan schemes. However, common set of housing loan eligibility criteria is given below:


  • Nationality: Indian Residents, Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs)
  • Credit Score:: Preferably 750 and above
  • Age Limit: 18 - 70 years
  • Work Experience: At least 2 years (for salaried)
  • Business Continuity: At least 3 years (for self-employed)
  • Minimum Salary: At least Rs. 25,000 per month (varies across lenders & locations)
  • Loan amount: Up to 90% of property value

Home loan interest rate starts at 6.75% p.a. It varies across lenders and loan schemes. Home loan rates depend on several factors such as credit score of the applicant, quantum of the loan, repayment capacity of the applicant and tenure.

Lenders offer home loans either at fixed interest rates or floating interest rates.

1. Fixed Rate Home Loan

In case of fixed rate home loans, the rate of interest applicable at the time of loan disbursal remains same throughout the loan period. And because of the unchanged interest rate, the loan EMIs also remain constant.


Pros
  • Since the home loan rate remains constant, you will know exactly how much interest you have to pay for the loan, helping you plan out finances well in advance.
  • Again, since the rate remains the same throughout the loan tenure, you will be shielded if any time, during the loan tenure, the lending rates rise.

Cons
  • The interest rate for fixed rate home loans is usually 1% - 2.5% higher than the interest rate for floating rate home loan.
  • At any time during the loan tenure if the lending rates fall, the fixed interest rate will remain unchanged, giving you no benefit of the reduced EMIs.

2. Floating Rate Home Loan

In case of floating rate home loan, the interest rate is subject to change as per the change in the linked benchmark rate as published by the lender (such as Repo Rate) which in turn is dependent on several factors such as RBI policies and other external factors.


Pros
  • Floating interest rate home loans are cheaper as compared to fixed interest rate home loans.
  • RBI mandates no prepayment or foreclosure charges for individuals borrowing a floating rate home loan.

Cons
  • The only problem with a floating rate home loan is that its EMIs change with the change in the interest rate, which can create difficulty in planning expenses in advance.

Both types of home loan interest rates have their own list of pros and cons. When it comes to choosing between fixed and floating interest rates on home loans, pick the one that suits your needs the best.

Documents Required for Home Loan

Home loan application forms usually have a checklist of documents that applicants need to submit to their lenders. These documents are usually same for all lenders; however, a few specific requirements may vary depending on the chosen loan scheme, purpose of the loan and individual credit profile.

Some of the common documents required for getting a home loan are:


  • Duly filled in and signed home loan application form.
  • Passport size photographs, as required.
  • Proof of Identity: Copy of any one (PAN Card, Passport, Aadhaar Card, Voter’s ID Card and Driving License).
  • Proof of Age: Copy of any one (Aadhaar Card, PAN Card, Passport, Birth Certificate, 10th Class Mark-sheet, Bank Passbook and Driving License).
  • Proof of Residence: Copy of any one (Bank Passbook, Voter’s ID, Ration Card. Passport, Utility Bills (Telephone Bill, Electricity Bill, Water Bill, Gas Bill) and LIC Policy Receipt.
  • Proof of Income for Salaried: Copy of Form 16, latest payslips, IT returns (ITR) of past 3 years and investment proofs (if any).
  • Proof of Income for Self Employed: Details of ITR of past 3 years, Balance Sheet and Profit & Loss Account Statement of the Company/Firm, Business License Details and Proof of Business Address.
  • Property-related Documents: NOC from Society/Builder, detailed estimate of the cost of construction of the house, registered sale deed, allotment letter and an approved copy of the building plan.
  • Note: The above list is indicative and your lender might ask for additional documents..

EMI Calculator

Loan EMI

₹ 24,959

Total Interest Payable

₹ 34,90,279

Total of Payments
(Principal + Interest)

₹ 59,90,279

Created with Highcharts 4.2.2 Break-up of Total Payment 41.73% 58.27% Principal Loan Amount Total Interest Total Interest: 58.27%

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Frequently Asked Questions

Banks and Housing Finance Companies (HFCs) offer home loans for different purposes. So before applying for any type of home loan, assess your requirements in order to get a suitable home loan scheme. Some of the types of home loans available are as follows:

  • Home Purchase Loan: It is the most common type of home loan availed usually to buy ready-to-move-in properties, under construction properties and pre-owned homes/resale properties. As per RBI guidelines, lenders can offer loan-to-value (LTV) ratio of up to 75-90% of the property value

  • Composite Loan: It is a perfect financing solution for individuals who want to buy a plot of land either for investment or for building a house. In this type of home loan, the first disbursement is made towards the purchase of plot. The subsequent payments depend on the stages of construction of the house

  • Home Construction Loan: This type of home loan is available for individuals who want funds for the construction of a house. The loan is granted only if you own a plot of land and plan to construct a house on it. Just as in composite loan, here too the disbursement depends on the stages of construction of the house

  • Home Improvement Loan: The can be availed to fund home renovation and home repairing expenses of the existing house. The interest rate for this loan is same as that for a regular home loan. However, its loan tenure is shorter than the regular home loan

  • Home Extension Loan: It is for those who require funds to add more space to their abode. Under this loan type, financial institutions usually lend 75-90% of the construction estimate, depending on the loan amount and LTV ratio

  • Bridge Loan: It is a short-term home loan and is suitable for individuals who wish to buy a new house with the sale proceeds of the existing home. The loan helps in covering the gap between the purchase of a new house and the sale of an existing house

  • Interest Saver Loan: It is similar to home loan overdraft facility. In this, the borrowers’ home loan account is linked to their bank account. Any amount deposited in the bank account over and above the EMI amount is used as prepayment towards the loan, thus, saving on the interest amount

  • Step Up Loan: Yet another type of home loan in which borrowers pay lower EMIs during the initial years of the loan tenure. However, there is a provision of increasing the EMI amount over time. This makes the loan affordable for young professionals who just start their career

Some of the most popular banks offering home loans in India are HDFC Bank, SBI, PNB, ICICI Bank, Bank of Baroda, Axis Bank and Canara Bank. However, the best home loan for you would be the one that matches your needs. Therefore, to get the best bank for home loan first analyse your requirements. Also, when comparing home loan offers don’t jump for the offer that offers lowest interest rate, rather check on the entire deal. Besides the interest rate, pay attention to other parameters such as loan repayment and prepayment policies, processing fees, etc.

Yes. Both the loan principal amount and the interest paid towards loan repayments provide tax benefits under Section 80C, Section 24(b) and Section 80EE of the IT Act respectively.

No. Banks usually keep a 20% margin when providing individuals with a home loan. This means that the lender may agree to provide you with 80% of the property value as a home loan, while you will have to shell out the rest 20% by yourself. In some cases, the lender can agree to provide you with up to 90% of the property value as a home loan.

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