Home Loan in India
A home loan in India is provided by Banks and Housing Finance Companies for the purchase of a residential purpose property. Housing Finance Lenders/Financers in India includes Indian Private sector Banks, India Public Sector Banks, Multinational Banks, Scheduled Banks Cooperative Banks and NBFCs with Housing Finance company License (HFC License).
A Home loan is a secured loan and the property you are buying get mortgaged with the financer lending you the loan,
Leading India Private Sector Bank Offering Home Loans are ICICI Bank, Axis Bank, Kotak Mahindra Bank, Yes Bank, Dhanlaxmi Bank, Federal Bank and others.Public Sector Banks:-
Leading Public Sector Banks in India actively offering housing finance or home loans includes the State Bank of India (SBI), Punjab National Bank (PNB), Bank of Baroda (BOB), Oriental Bank, Dena Bank, Andhra Bank, Bank of India, Canara Bank, IDBI Bank, Central Bank, Bank of Maharashtra and others.Non-Banking Financial Corporations(NBFCs)
NBFCs are very actively offering Home Loans in India and have customized products and offers in home loan to meet every home loan requirement and they have a very deep penetration in the India top Cities to smaller cities. HDFC Limited, Dewan Housing Finance Limited (DHFL), LIC Housing, PNB Housing Finance Limited, ICICI Housing Finance, Indiabulls Housing Finance, Tata Capital Housing Finance, Aditya Birla Housing Finance, Bajaj Finserve, Reliance Capital Housing Finance are leading NBFCs offering home loans in the country.Multinational Banks:-
MNC Banks offers very competitive interest rate for home loans in India, most actively lending MNC Banks includes Citibank, Standard Chartered Bank (SCB), HSBC Bank, DBS Bank, Deutsche Bank etc.
Housing Finance companies offer home loans to Indian Residents working in a public/private sector enterprises or a Multinational Corporation, Self- Employed Individuals having own business, NRIs (Non Resident Indians) & PIOs. Some of the NBFCs offer home loan to Firms and companies as well where the business entity is purchasing a residential purpose property for the accommodation of business owner or employees of the organization.
Financers in India offer home loan for a tenure of 1 year to 30 years, depending on the age of the loan applicants for a loan amount ranging from as low as Rs. 2.00 to Rs. 25.00Crores or even more depending on the income eligibility of a borrower. In Indian metro cities banks have sanctioned and disbursed loans to the tune of Rs. 200Cr to 400 Cr or even higher, in simply means the upper cap of a home loan amount is not fixed and depends on the risk taking appetite of the financers and loan eligibility of the borrower. The home loan interest rates in India varies from as low as 8.05% to 11.25% percent depending on the cost of the funds of the lender. Banks home loan lending rate is linked to MCLR of the bank and NBFCs lending rate is linked to PLR of the NBFC.
Type of Home loan available in India
To meet every requirement Financers including Banks and NBFCs offer different type of home loans to home buyers based on the property he/she is buying, below is the type of home loan available in India:
Home Purchase Loan
This is the most common type of home loan taken in India for the purchase of a residential property. A residential purpose property can be:
- A ready or an under construction apartment
- A ready or an under construction bungalow
- A ready or an under construction row house
All the home loan lenders in India like HDFC, SBI, Axis Bank, ICICI Bank, DHFL, Kotak Mahindra Bank, HSBC Bank, Yes Bank, Citibank and others are providing this type of home loan for property purchase.
Home Construction Loan
This loan is available for construction of a new residential property. Home Construction loan can be funded by a housing finance company for construction of a bungalow, row house etc. SBI, HDFC, ICICI, Axis Bank, IDBI Bank, PNB, Andhra Bank and many others are offering this type of house loan. This type of home loan is also called Self Construction Home Loan.
Home Improvement Loan
This type of loan is provided to repay, upgrade and or renovation of an existing residential property.
Home Extension Loan
This type of home loans are given for expanding or extending existing residential property or for adding an extra room, etc.
Balance Transfer Home Loan
This type of home loan helps you to pay off an existing home loan by availing another loan from a different mortgage lender.
Balance Transfer Home Loan with Top Up
This type of home loan is provided by banks to balance transfer or refinance a borrowers existing home loan with an addition top – up (cash-out) which may be used for extension of your residential property, home renovation, furnishing your house or other personal use. Leading financers offering Balance transfer home loan with Top Up facility includes- Axis Bank, ICICI Bank, HDFC, Standard Chartered Bank, Citibank, Kotak Mahindra Bank, DBS Bank, Yes Bank, DHFL, Aditya Birla Housing Finance, Tata Capital. These banks can offer you a top up amount up to 70 percent valuation of the current market valuation of the property.
Land Purchase Loan
This type of a home loan is provided by banks/NBFCs for the purchase of a land for building a bungalow.
Refinance Home Loan
A refinance home loan helps you to pay off another debt you may have taken to purchase/ build a house. You refinance a housing loan to pay off the other non-home loan.
NRI Home Loan
This type of home loan in tailored for Non Resident Indians (NRIs) planning to purchase/build a house in India. If you are an NRI check best rate for NRI home loan at mudrafincorp.co.in. Leading banks for NRI Home Loan in India are Axis Bank, ICICI Bank, SBI, Citibank, Standard Chartered bank, DBS, HSBC, Bank of Baroda (BOB), Kotak Mahindra Bank and HDFC Limited.
Features of Home Loan
Indian home loan industry is growing at the rate 18 plus percent for last one decade, largely because of government’s policies to promote housing for all. Government of India offers lucrative subsidies to the financers offering home loans and revive it every year according to the changing scenario. There are more than 50 financers large and small offering housing finance, to stay competitive Banks & NBFCs provide home loans with very attractive features, below is the key features for home loansHome Loan Amount
Banks and NBFCs offer home loan from Rs. 2.00Lacs to Rs 25.00 Crores and more. Depending on a borrower’s loan eligibility and property value. Banks and NBFCs have provided a loan amount up to hundreds of crores in metro cities of India like Mumbai, Delhi and Bangalore so there’s no upper cap of loan amount in with some of the financersHome Loan interest rates
Home Loan interest rate varies from 10.5 to 15 percent variable or fix. The rate of interest a bank offers you is linked with the MCLR of the (Marginal Cost of fund Based Lending Rate) as guided by the central bank of India. Interest rate on home loan offered by NBFC, HFCs are based on PLR of the financer (Prime Lending Rate)Type of Home Loan Interest Rate
In India home finance companies operate with two type of interest rates, fixed rate of interest and variable rate of interest or floating rate
- Fixed Rate Home Loan
- Floating Interest Rate Home Loans
- Semi-Fixed Rate Home Loan
- Full Term Fixed Rate Home Loan
Fixed Rate of interest in home loans means, the rate of interest sanctioned to you will remain fixed for the specified duration/ tenure of your loan, it can also be the complete tenure of the loan. This means that you do not get any benefit if the rate of interest in the home loan market goes down/drops (or move downward). At the same time, you do not get affected if the rate of interest in the market increases. Under fixed rate of interest home loans, the banks/NBFC retains the right to increase or decrease the rates post specified intervals. You must read the bank loan agreement carefully before signing it. Check fixed rate home loan offers. Banks and NBFCs offering fixed rate are HDFC, PNB, SBI, ICICI Bank, Axis Bank and others
Home loans with floating rate of interest keep fluctuating according to the bank/s & market lending rates. This means that a home loan borrower stands the risk of paying more than the interest assigned in case the lending rates goes up. At the same time, as and when the lending rate reduces the customer tends to get the benefit of paying a lower EMI. Check Floating rate home loans from SBI, Axis Bank, ICICI Bank, HDFC Bank and others at mudrafincorp.co.in
Semi fixed rate home loan offer is a type of rate, which is fixed for less than the complete tenure of the loan but not for the entire term. It can be fixed for 1, 2 or 5 years (or more) as decided by the mortgage lender.
It is fixed for the entire tenure of the loan- When you are applying for a home loan with fixed rate of interest, the home finance company will offer you a rate of interest which is fixed for the entire term of the loan.
The rate of interest a Bank or NBFC offers you depends your credit & risk profile which may include your profession- salaried/self-employed, the company you work for, total number of years of experience you have, repayment track on your existing or closed loans, your income and the loan amount required.If you are salaried, higher the income and loan amount requirement you have a good chance of getting a better, it also depends on your employer if you are working with top 500 companies of India it further improves your chances of getting a lower rate from the lender.If you are Self-employed business owner with higher income, higher the loan amount you strike a better chance of getting lower rate from the lenders. It also depends of your loan repayment history, banking transactions etcHome Loan Tenure
Banks and NBFCs in India offer a home loan tenure starting from 1 year to 30 years, depending your age at the time of application of the loan and maturity of the home loan. The home loan term a bank or NBFC provides you must get over before you turn maximum age limit defined by the banks. The maximum age criteria of financers are 58 years for salaried individuals and 65 years for Self-employed business owners. Minimum age criteria to apply for a home loan is 23 years for the primary/main applicant of the loan and co-applicant income not considered should be at least 18 years. Axis Bank, SCB, SBI, ICICI Bank and HDFC limited offers a home loan tenure up to 30 years.Collateral Security Required for Home Loan
A Home loan is a secured loan; it means the financer offering you the loan comes against a collateral security. The residential property for the purchase of which the bank is funding you a housing loan get mortgaged with the financer and the mortgage get released post the loan gets repaid by you. The lenders in India generally do an oral equitable mortgage of the property in all home loans and not a registered mortgage. Oral equitable mortgage costs a borrower between 0.10 to 0.20 percent of the borrowed loan amount (franking charges varies in different states) and it get executed by signing lenders loan agreement and depositing the legal, title and ownership documents of the property.Pre-Payment Charges for Home Loan- No Pre-Payment Charges
As per the RBI guide lines all the public/ private sector banks MNC Banks and NBFCs lending home loans to salaried or self-employed individuals, offers a home loan without any pre-payment charges. Banks or NBFCs lending home loan to firms and companies generally charges a pre-payment charge based on their policies. SBI, HDFC, ICICI Bank, Axis Bank, SCB, DHFL and other don’t charge a penalty for pre-part payment of home loans.Foreclosure or Early Closure Charges for Home Loan- No Foreclosure Charges
Home Loan lenders including banks and NBFCs do not charge any penalty on home loan provided to salaried or self-employed individuals. However, lenders charge a penalty on early closure of home loans given to firms or companies.Home Loan Repayment
Home loan repayment is made using Equated Monthly Instalments (EMI) for the tenure of the loan. EMI consist of principal as well as interest component in it. An EMI starts from the next calendar month post disbursal of the loan, date of home loan EMI is fixed as per a bank’s policy and to be paid every month. Most of the home loan lenders have a home loan EMI date between 1st and 10th of every calendar month.Co-Applicant for Home Loan
Lenders take a co-applicant to you for increasing your home loan eligibility. Generally, spouse is preferred as a co-applicant in the loan, in case the home loan applicant is single one of the parents can come into the loan structure as co-applicant. All the joint property owners have to be compulsorily a co-applicant in the loan.Home Loan processing fee
A lender charges you a small processing fee when you take a loan to cover the initial cost for processing, sanction and disbursal of your home loan. Home loan processing fees covers below mentioned expenses
- Documentation of home loan
- Sanction process of home loan
- Valuation of property
- Legal & title clearance for property and other charges which the bank incurs initially
A home loan processing fees range starts from Rs. 5000/- only and goes up to 2% of the loan amount. A processing fee for your housing finance depends on below mentioned factors:
- Quantum of finance
- Type of property you are purchasing- Ready property, under construction property, an apartment in an approved project/unapproved project, a residential plot etc.
- Lender- Bank/NBFC
We have pre-negotiated deals for our customers for the lowest processing fee in the market. MyMudra guarantees the lowest processing fees for home loan in IndiaLoan Amount to Purchase Cost of the Property
The loan amount a financer will fund you against the cost of the property depends on the quantum of loan amount you are proposed to take. Lower is the loan amount higher will be the loan amount to cost of acquiring the property. For a home loan amount up to Rs. 75.00 Lacs you get up to 80 percent of the cost of the property and above Rs. Rs. 75.00 Lacs the ratio will be 75% of the cost of the property.Guarantor in Home Loan
Generally Banks and NBFCs don’t take any guarantor for your home loan. Based on your overall profile lenders may ask you for a guarantor.