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Compare and apply for home loan online in 5 simple steps:

• Step 1: Enter your mobile number in the application form
• Step 2: Enter OTP to verify your mobile number
• Step 3: Share details related to your loan requirements
• Step 4: Provide your personal details
• Step 5: Compare offers and apply for the best-suited loan

Home loan processing fees may vary widely based on lenders and credit profiles of loan applicants. To get a fair idea of the home loan fees and charges, read the table below:

Home loan eligibility may vary across lending institutions and home loan schemes. However, a 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 730 and above
• Minimum Age: 18 years with some lenders setting the minimum age of 21 years
• Maximum Age: Usually 70 years at the time of loan maturity with some lenders extending the tenure till 75 years of age
• 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

Note: Apart from the above parameters, your home loan eligibility also depends on the property you are buying and the location of that property.

Lenders require documents from their home loan applicants as a proof to establish their identity, place of residence, income and repayment capacity. These documents may vary across lenders based on the individual credit profile, property type, home loan type, etc.

Given below are the key home loan documents that an applicant will need to furnish when applying for the loan.

Banks and HFCs offer different types of home loan schemes to service the unique requirements of various customer segments. Below is a brief overview of some of the common types of home loans.

Availing a home loan can help in the following ways:

• Enabling home ownership sooner: Home prices in India are usually multiple times higher than an individual’s annual disposable income, making it challenging for most people to buy a housing property on their savings alone. In such a case, a home loan can help you buy your dream home sooner without having to wait till you accumulate money for your dream home. Moreover, utilising all your available savings/investments upfront for home purchase may adversely impact your other financial goals. With a home loan, you can manage your finances better by committing only a portion of your annual income towards home purchase.
• Longer repayment period: When compared to its alternatives like a personal loan, home loan offers longer repayment period usually extending up to 30 years. Such a longer repayment period helps in spreading out the total loan amount over a greater number of months, resulting in more affordable EMIs.
• Lower interest rates: Home loan interest rates are significantly lower than personal loan interest rates. Home loan interest rates start from 8.25% p.a. whereas personal loan interest rates usually start from 10.50% p.a. Lower interest rates lead to reduction in the overall interest cost on the loan, making it more affordable for the borrowers. Some banks/ HFCs also offer interest concessions of 0.05% to their women home loan applicants.
• Tax benefits: As per Section 80C of the Income Tax Act, home loan borrowers can claim tax deduction of up to Rs. 1.5 lakh on principal repayments made in a financial year. As per Section 24(b), a deduction of up to Rs. 2 lakh can be claimed on home loan interest payments made in a financial year. However, it’s important to note that home loan borrowers choosing the new tax regime are not eligible to claim tax deductions under these Sections.
• No prepayment charges: Most banks/HFCs offer home loans at floating interest rates. Due to this, they do not levy any prepayment/foreclosure charges when borrowers prepay or foreclose their home loans. Even in case of most fixed rate home loans, lenders may waive off prepayment/foreclosure charges, provided the prepayment is made from borrowers’ own fund sources.
• Interest-only home loans: Many lenders offer interest-only home loan schemes wherein borrowers pay just the interest component of the loan during the initial years of the loan tenure and later on make the regular EMI payments until the loan maturity. These home loan schemes are best suited for those who are living on rent and plan to buy an under-construction property. This is also beneficial for those who currently lack adequate monthly surpluses to pay their loan EMIs and have near certainty regarding their income increase in the near future.

Your home loan application can be rejected due to several reasons, some of them are listed as below:

• Low credit score: Your credit score is a numerical representation of how well you have handled credit in the past. Having a low credit score usually indicates poor financial discipline, causing lenders to deem you as a risky borrower and reject your home loan application. Applicants having credit score of 730 and above usually have higher chances of getting loan approval.
• Low loan repayment capacity: Lenders usually prefer offering home loans to those having their total loan EMI obligations, including the EMI of the proposed loan, within 50-55% of their monthly income. Those exceeding this limit have lower chances of availing home loan.
• Issues related to property: If the property doesn’t meet the lender’s requirements (e.g., value, condition) or does not adhere to the regulations of the local authorities, it can lead to loan rejection. For instance, lenders will not approve your loan application if your property is in some legal dispute, does not have a clear title, is too old or is not authorised by the local authorities.
• Multiple loan or credit applications within a short span: Lender-initiated requests of credit reports are known as hard enquiries. With every hard enquiry initiated, credit bureaus reduce the applicant’s credit score by a few numbers. Making multiple hard inquiries within a short period may sharply decline the applicant’s credit score, thus, reducing his chances of getting a home loan.
• Ineligible occupation profile: Individuals whose occupation or employer profile is not among the lenders’ list of preferred occupation/employer profiles may not get their loans approved.

House loan borrowers can avail tax benefits under various sections of the Income Tax Act. These home loan tax benefits help borrowers save a substantial amount of money every year. Below are the tax benefits that you can get on your home loan EMI payments:

If your home loan application was rejected, follow these tips to improve your chances of approval next time you apply or a home loan:

• Build/maintain your credit score at 730 or above
• Check for any inaccuracies in your credit report
• Add an earning member of your family as a co-applicant
• Contribute more towards home down payment
• Compare housing loan offers of various banks and HFCs before making the loan deal
• Avoid making multiple loan applications within a short span of time
• Ensure your total EMI obligations (including the proposed home loan EMI) are within 55-60% of your net monthly income

No, you cannot take a home loan for the entire property value as the Reserve Bank of India (RBI) has limited the loan-to-value (LTV) ratio of housing loans. As per RBI guidelines, for loan amounts up to Rs 30 lakh, the LTV ratio can go up to 90% of the property value; for loan amounts above Rs 30 lakh and up to Rs 75 lakh, the LTV ratio limit is up to 80% of the property value and for loan amounts above Rs 75 lakh, the LTV ratio can go up to 75% of the property value.

This means that at least 10% of the remaining value has to be paid by the borrower as down payment. Subject to the caps set by the RBI on LTV ratios, banks/HFCs further fix the LTV ratio on the basis of the risk assessment and credit profile of the loan applicant. Those with lower creditworthiness are usually offered lower LTV ratio.

A home loan balance transfer can be a smart financial move if you want:

• Lower Interest Rates: If your credit profile has improved over time, you may now be eligible for lower interest rates than what you were initially offered. Transferring your loan to a lender offering better rates can reduce your EMIs and overall interest burden.

• Longer Loan Tenure: Some lenders offer the option to extend your loan tenure beyond the residual term of your current loan. This helps in lowering your monthly EMIs, although it might increase the total interest paid over the loan period.

• Top-Up Loan Facility: Balance transfer applicants often become eligible for a top-up loan, which can be used for personal or professional purposes without end-use restrictions. This is beneficial if your current lender isn’t offering a top-up loan or is charging a higher interest rate on it.

• Additional Benefits: Switching to a new lender might also offer perks like zero processing fees, EMI waivers, or better customer service, enhancing your overall loan experience.

However, a balance transfer may not be ideal if you’re in the later stages of your home loan tenure or if the net savings after deducting the applicable fees and charges such as processing fees (charged by the new lender) and foreclosure charges (applicable only in case of fixed rates) are minimal. Always calculate the total cost-benefit before deciding to transfer your home loan.

The Government of India offers subsidies on home loans through the Pradhan Mantri Awas Yojana – Urban 2.0. Under the scheme, financial assistance of up to Rs 2.5 lakh per unit will be provided to 1 crore urban poor and middle-class families for purchasing, building or renting affordable homes in urban areas.