Compare the best home
loan rates in Tamilnadu

How to Get a Home Loan in TAMILNADU?

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Know your loan eligibility

Wondering how much you can borrow? We can help you with that. Your loan amount is determined by your Fixed Obligations to Income Ratio (FOIR) or Debt-Service Coverage Ratio (DSCR) or Self Assessment Ratio implemented by banks and Financial Institutions. Reach out to us, so you can find out your loan eligibility quickly.

Get your In-Principle Approval (IPA)

Gone are the days when you’d have to visit banks for your In-Principle Approval. We’ve streamlined the process to make it easier and faster for you to get one. Simply gather the required documents, submit everything to us and wait for approval.

Apply for home loan

Once you get your IPA, you’re all set for the next step – getting the best home loan in TAMILNADU. If you’re buying a ready to occupy homes, you can apply for a Home Loan Purchase or a home loan. If you’re eyeing to construct a home, you can get a home loan for construction from banks or financial institutions.

Home Loan Key Benefits and Features

At BankVallet, we understand that a home is not just a place to stay. It is much more than that. It is a warm little corner in the world that is yours, tailored by your tastes and needs. It is the place where you celebrate the joys and enjoy the journey called life. There is no place like 'home' and with BankVallet you can gather hopes, achieve your dreams and create memories in your own space.

  • Loans for purchase of a flat, row house, bungalow from private developers in approved projects
  • Loans for construction on a freehold / lease hold plot or on a plot allotted by a Development Authority.
  • Innovative Home Loan schemes
  • Doorstep assistance on your Home Loan
  • Expert legal and technical counselling to help you make the right home buying decision
  • Loans for purchase of properties from development Authorities such as DDA, MHADA etc
  • Loans for purchase of properties in an existing Co-operation Housing Society or Apartment Owners' Association or Development Authorities settlements or privately built up homes
  • Attractive Home Loan interest rates that make your Home Loan affordable and easier on your pocket

Know more about Home Loans

You can apply individually or jointly for Home Loans. All proposed owners of the property will have to be co-applicants.

Classification of Self Employed Customers
Self Employed Professional (SEP) Self Employed Non-Professional (SENP)
Doctor Manufacturer
Lawyer Trader
Chartered Accountant Service Provider
Architect Commision Agent
Consultant Contractor Etc.
Engineer
Company Secretary, Etc.

Things to Know When Choosing Your Home Loan

What's the maximum funding and the loan payment term?
Loan Amount Maximum Funding*
Up to and including Rs.30 lacs 90% of the property cost
Rs.30.01 lacs to Rs.75 lacs 80% of the property cost
Above Rs.75 Lacs 75% of the property cost
*Subject to market value of the property and repayment capacity of the customer, as assessed by Banks/NBFCs

The maximum period of repayment of a loan shall be up to 30 years for the Telescopic Repayment Option under the Adjustable Rate Home Loan. For all other Home Loan products, the maximum repayment period shall be up to 20 years.

The tenure of the loan is also dependent on the customer’s profile, age of customer at maturity of loan, age of property at loan maturity, depending upon the specific repayment scheme as may be opted and any other terms which may be applicable based on prevalent norms of Banks/NBFCs.

Home Loan Eligibility
Eligibility Criteria Requirement
Age Minimum Age: 18 years and Maximum Age: 70 years
Resident Type

The applicant must be (any one):

  • Resident Indian
  • Non-Resident India (NRI)
  • Person of Indian Origin (PIO)
Employment

The applicant can be (any one):

  • Salaried
  • Self-employed
  • Self-employed professional
Net Annual Income At least Rs.3-6 lakh depending on the type of employment
Residence

The applicant must have (any one):

  • A permanent residence
  • A rented residence where he/she has resided for at least a year prior to applying for a loan
Credit score A good credit score of at least 700 or more obtained from a recognized credit bureau

Home Loan Documents and Charges

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For Salaried:
Identity Proof (any one):
  • PAN (mandatory)
  • Driving License/ Voter ID/Valid Passport/Smart Ration Card
Current Residence Address Proof (any one):
  • Copy of Driving License/Electricity Bill/Water Tax/Property Tax/Aadhaar Card/Telephone Bill/Valid Passport/Employer ID Card/Notary Public Affidavit
Passport Size Photograph:
  • Two passport size recent photographs
Employment Proof:
  • Current Employer Appointment or Offer Letter
  • Employer ID card (optional)
Income Proof:
  • Copy of Form 16
  • Latest 3 months salary slips or Salary certificate
  • Latest 1 year salary credited SB A/c statement
  • Bank account statements for all the bank accounts owned by the applicant for the last one year
Property Documents:
  • Agreement of Sale (any one):
    • Registered Agreement of Sale
    • Stamped Agreement of Sale
    • Allotment Letter
  • Occupancy Certificate in case the property is a ready-to-move-in property
  • Copy (blueprint) of the Approved Plan and Registered Development agreement of the builder
  • Conveyance Deed in case of a new property
  • Bank account statements indicating all payments made to the seller or builder
  • Property Tax Receipts in case there is no plan approval and in case of a more than 10 years old property need minimum 5-10 years property tax receipt
  • Latest EB bill in case of a old property
  • Encumbrance Certificate (EC) from 01.01.1987 to current date

For Co-Applicant (if needed):

Identity Proof (any one):
  • PAN (mandatory)
  • Driving License/ Voter ID/Valid Passport/Smart Ration Card
Current Residence Address Proof (any one):
  • Copy of Driving License/Electricity Bill/Water Tax/Property Tax/Aadhaar Card/Telephone Bill/Valid Passport/Notary Public Affidavit
Passport Size Photograph:
  • Two passport size recent photographs
Employment Proof:
  • If Salaried – follow the same documents as Salaried Profile
  • If SEP or SENP – follow the same documents as SEPs or SENPs Profile
Income Proof:
  • If Salaried – follow the same documents as Salaried Profile
  • If SEP or SENP – follow the same documents as SEPs or SENPs Profile
For Self Employed Non Professionals (SENP - Business):
Identity Proof (any one):
  • PAN (mandatory)
  • Driving License/ Voter ID/Valid Passport/Smart Ration Card
Current Residence Address Proof (any one):
  • Copy of Driving License/Electricity Bill/Water Tax/Property Tax/Aadhaar Card/Telephone Bill/Valid Passport/Employer ID Card/Notary Public Affidavit
Passport Size Photograph:
  • Two passport size recent photographs
Business Proof:
  • Professional Tax Receipt or SSI Certificate or Company’s RC (TIN No) Copy or Any other old business proofs
  • GST Certificate copy
Income Proof:
  • Latest three Financial Year’s (FY) Income Tax Return copies with full set (with auditor seal & sign)
  • Bank account statements for all the bank accounts (SB/Current/OD/CC) owned by the applicant for the last one year
Property Documents:
  • Agreement of Sale (any one):
    • Registered Agreement of Sale
    • Stamped Agreement of Sale
    • Allotment Letter
  • Occupancy Certificate in case the property is a ready-to-move-in property
  • Copy (blueprint) of the Approved Plan and Registered Development agreement of the builder
  • Conveyance Deed in case of a new property
  • Bank account statements indicating all payments made to the seller or builder
  • Property Tax Receipts in case there is no plan approval and in case of a more than 10 years old property need minimum 5-10 years property tax receipt
  • Latest EB bill in case of a old property
  • Encumbrance Certificate (EC) from 01.01.1987 to current date

For Co-Applicant (if needed):

Identity Proof (any one):
  • PAN (mandatory)
  • Driving License/ Voter ID/Valid Passport/Smart Ration Card
Current Residence Address Proof (any one):
  • Copy of Driving License/Electricity Bill/Water Tax/Property Tax/Aadhaar Card/Telephone Bill/Valid Passport/Notary Public Affidavit
Passport Size Photograph:
  • Two passport size recent photographs
Employment Proof:
  • If Salaried – follow the same documents as Salaried Profile
  • If SEP or SENP – follow the same documents as SEPs or SENPs Profile
Income Proof:
  • If Salaried – follow the same documents as Salaried Profile
  • If SEP or SENP – follow the same documents as SEPs or SENPs Profile
For Self Employed Professionals (SEP – Doctors/Engineers/Chartered Accountants/Other Professionals):
Identity Proof (any one):
  • PAN (mandatory)
  • Driving License/ Voter ID/Valid Passport/Smart Ration Card
Current Residence Address Proof (any one):
  • Copy of Driving License/Electricity Bill/Water Tax/Property Tax/Aadhaar Card/Telephone Bill/Valid Passport/Notary Public Affidavit
Passport Size Photograph:
  • Two passport size recent photographs
Qualification Proof:
  • Certificate of Qualification (for Doctors/C.A. and other professionals)
  • Medical Registration Certificate (for Doctors)
Income Proof:
  • Copy of Form 16 or Latest three Financial Year’s (FY) Income Tax Return copies with full set (with auditor seal & sign)
  • Bank account statements for all the bank accounts (SB/Current/OD/CC) owned by the applicant for the last one year
Property Documents:
  • Agreement of Sale (any one):
    • Registered Agreement of Sale
    • Stamped Agreement of Sale
    • Allotment Letter
  • Occupancy Certificate in case the property is a ready-to-move-in property
  • Copy (blueprint) of the Approved Plan and Registered Development agreement of the builder
  • Conveyance Deed in case of a new property
  • Bank account statements indicating all payments made to the seller or builder
  • Property Tax Receipts in case there is no plan approval and in case of a more than 10 years old property need minimum 5-10 years property tax receipt
  • Latest EB bill in case of a old property
  • Encumbrance Certificate (EC) from 01.01.1987 to current date

For Co-Applicant (if needed):

Identity Proof (any one):
  • PAN (mandatory)
  • Driving License/ Voter ID/Valid Passport/Smart Ration Card
Current Residence Address Proof (any one):
  • Copy of Driving License/Electricity Bill/Water Tax/Property Tax/Aadhaar Card/Telephone Bill/Valid Passport/Notary Public Affidavit
Passport Size Photograph:
  • Two passport size recent photographs
Employment Proof:
  • If Salaried – follow the same documents as Salaried Profile
  • If SEP or SENP – follow the same documents as SEPs or SENPs Profile
Income Proof:
  • If Salaried – follow the same documents as Salaried Profile
  • If SEP or SENP – follow the same documents as SEPs or SENPs Profile
For Non-Resident Indians (NRIs - SENP/SEP and Salaried):
Identity Proof (any one):
  • PAN (mandatory)
  • Valid Passport (mandatory)
  • Valid Visa (mandatory)
  • Employer Identity Card
  • Driving License/ Voter ID/Smart Ration Card
Current Residence Address Proof (any one):
  • Copy of Driving License/Electricity Bill/Water Tax/Property Tax/Aadhaar Card/Telephone Bill/Valid Passport/Notary Public Affidavit
  • Proof of residence indicating the applicant’s current overseas address
Passport Size Photograph:
  • Two passport size recent photographs
Employment Proof:
  • Business Address Proof (for NRI –SENP/SEP)
  • Registration Certificate (for NRI –SENP/SEP)
  • Valid work permits (for NRI - Salaried)
  • Employment contract (translated in English) attested by the employer/consulate/embassy/Indian foreign office if the contract is in another language. (for NRI - Salaried)
Income Proof:
  • Balance Sheet and Profit and Loss accounts audited by a certified CA for the last 2 years (for NRI – SENP/SEP)
  • Individual Tax Return for the last 2 years – Not applicable to NRIs/PIOs located in the Middle East countries.
  • Bank statement of the individual’s as well as the business/company’s overseas account for the last 6 months.
  • Valid work permits (for Salaried - NRI)
  • Salary slips for the last 3 months (for Salaried - NRI)
  • Bank statements indicating salary credit for the last 6 months (for Salaried - NRI)
  • Copy of the Identity Card issued by the current employer along with the latest salary slip (original). (for Salaried - NRI)
  • Copy of the individual Tax Return for the last assessment year. - Not applicable to employees in the Merchant Navy and NRIs/PIOs located in the Middle East countries. (for Salaried - NRI)
Property Documents:
  • Agreement of Sale (any one):
    • Registered Agreement of Sale
    • Stamped Agreement of Sale
    • Allotment Letter
  • Occupancy Certificate in case the property is a ready-to-move-in property
  • Copy (blueprint) of the Approved Plan and Registered Development agreement of the builder
  • Conveyance Deed in case of a new property
  • Bank account statements indicating all payments made to the seller or builder
  • Property Tax Receipts in case there is no plan approval and in case of a more than 10 years old property need minimum 5-10 years property tax receipt
  • Latest EB bill in case of a old property
  • Encumbrance Certificate (EC) from 01.01.1987 to current date
Other Documents:
  • If the applicant is employed in the Merchant Navy, the applicant is required to submit a copy of Continuous Discharge Certificate (CDC)
  • PIO Card issued by the Government of India in case the applicant/co-applicant is a Person of Indian Origin (PIO).
  • The attestation of the documents can be done by:
    • Indian Embassy/Consulate
    • Overseas Notary Public
    • FOs/Representative Offices
    • Officials of Branch/Sourcing Units based in India

For Co-Applicant (if needed):

Identity Proof (any one):
  • PAN (mandatory)
  • Driving License/ Voter ID/Valid Passport/Smart Ration Card
Current Residence Address Proof (any one):
  • Copy of Driving License/Electricity Bill/Water Tax/Property Tax/Aadhaar Card/Telephone Bill/Valid Passport/Notary Public Affidavit
Passport Size Photograph:
  • Two passport size recent photographs
Employment Proof:
  • If Salaried – follow the same documents as Salaried Profile
  • If SEP or SENP – follow the same documents as SEPs or SENPs Profile
Income Proof:
  • If Salaried – follow the same documents as Salaried Profile
  • If SEP or SENP – follow the same documents as SEPs or SENPs Profile

*Requirement of home loan documents might vary according to the scheme chosen. Banks/NBFCs may require additional home loan documents which will be intimated to you while processing your application.


Home Loan Interest Rates

Compare the lowest home loan interest rates starting from 7.30% p.a. and apply for the best home loan. Get the complete list of current housing loan rate of interest in India from all leading banks and financial institutions.

Home Loan Interest Rates all leading Banks/NBFCs 2020
Bank/NBFCs Interest Rate (%) Processing Fees (%) Tenure (yrs.)
min max min max min max
Union Bank of India 7.3 7.55 0.5 Rs.15,000 + GST 5 30
HDFC Ltd 7.5 14.85 0.5 2 5 30
Bank of Baroda 8.15 9.75 0.5 0.99 3 30
Axis Bank 8.5 10.6 0.5 0.99 5 20
Magma Housing Finance 8.7 19.55 0.99 2 7 15
Kotak Bank 8.7 9.25 0.99 0.99 5 15
LIC HFL 8.75 11 0.5 2 5 30
Repco 8.75 13.5 0.99 1.5 5 15
PNB Housing 8.95 9.95 0.25 2 3 30
IIFL 8.95 12.25 1.5 1.75 5 20
Aditya Birla Housing Finance 9 12.5 0.99 2 5 30
GIC HFL 9.1 12.5 0* Rs.2500 + GST 5 30
TATA Capital 9.25 12.5 0.5 2 5 30
ICICI Home Loans 9.25 15 0.99 1.5 5 20
IDFC First Bank 9.5 12.5 Upto Rs.10,000 Upto Rs.10,000 5 20
Chola 9.5 20.4 1.5 2.5 5 20
DCB Bank 9.59 16 0.99 2 5 20
Yes Bank 9.95 12.5 0.99 2 7 25
Fullerton Grihashakthi 9.99 24 1.5 2 5 20
RBL Bank 10 10.75 0.99 1.5 5 25
Equitas Small Finance Bank 10 18 1.5 2 3 15
JM Financial Services 10 14 1 1.5 10 25
Shriram Housing Finance 10.49 13.5 0.99 2 3 25
IndusInd 10.85 12.5 0.99 1.5 10 20
Hinduja Housing 11 16 1.5 2 1 25
HFFC 11.9 16.9 0.99 2.5 3 25
Indostar 12 16 2 3 10 30
Federal Bank 12.5 14.5 1.5 2 10 20
Natrust 13 16 1.5 2 5 20
Manappuram Finance 13.5 14.5 2 2.5 3 15
Aptus Home Loans 13.5 14 2 2.5 3 15
Jana Small Finance Bank 14 15 0.99 2 5 20

Note: HDFC Ltd. home loans Interest rate at 7.50% p.a. onwards for applicants with a credit score of 800 and above only. All loans at the sole discretion of HDFC Ltd.

Note: GIC HFL home loans processing fee is NIL at takeover of existing Housing loans from other HFCs. All loans at the sole discretion of GIC HFL Ltd.


Home Loan Fees and Charges

Depending on the type of loan you are applying for, the following charges may be levied:
Processing fees :

This is a one-time non-refundable fee that is to be paid to the home loan provider after the loan application has been approved. The processing charge varies depending on the bank and the loan scheme you are applying for.

Prepayment charges:

Prepayment penalty is the fee you will have to pay the lender if you plan on repaying your home loan before the completion of the loan tenure.

Conversion fees:

Some banks also charge a conversion fee when you decide to switch to a different loan scheme in order to lower the interest rate associated with your current scheme.

Cheque dishonor charges:

The fee is levied when the loan provider find that a cheque issued by the borrower is found to be dishonored due to reasons such as insufficient funds in the borrower’s account

Fees on account of external opinion:

In some cases, you might want to consult an external expert such as a lawyer or a valuator for his/her opinion on the loan. This fee should be paid directly to the concerned person and not the lending institution.

Home insurance:

The premium should be paid directly to the concerned company during the term to ensure that the insurance policy is running during the home loan tenure.

Default charges:

Loan providers also charge a penalty on delayed repayments i.e. if you fail to make your Equated Monthly Installments (EMIs) or Pre-EMIs on time. The defaulting charges vary from one bank to another.

Incidental charges:

This charge covers for the expenses incurred by the bank to recover dues from a borrower who has failed to make his monthly installments on time.

Statutory/regulatory charges:

The fee includes all charges associated with Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI), Memorandum of Entry and Deposit, and stamp duty. You can visit www.cersai.org.in to know more about these charges.

Photocopy of documents:

The fee is payable to the bank if you require a photocopy of your home loan documents for any personal needs.

Change in loan term:

Some banks also charge a nominal fee if you wish to change the tenure associated with your loan.


Learn More about Home Loans

Home Loan Rejection?
Do's Don't
Ensure that you have researched on the loan you want to apply for Do not blindly sign the documents before you read every term and condition on it
Read the fine print before taking the loan Do not forget to compare interest rates offered by different loan providers
Look out for any charges applicable on prepayments and foreclosure Do not default on your monthly payments
Make sure you pay the equated monthly installments (EMIs) on time Do not apply for a loan just for the sake of it
Ensure that you have a good credit score before you apply Do not sign the home loan agreement before reading the clauses
Apply for a loan amount you are eligible for Do not request for a change in tenure unless you have considered all the aspects
Submit all the necessary documents Do not submit an incomplete or mismatched loan application
Ensure that you have stable employment Do not have too many ongoing loans
What to do if your home loan application is rejected?

You can always re-apply for a home loan if your first loan application was rejected by the lender. However, there are a few aspects you must consider before doing so.

Credit score:

Since housing loans are generally long-term retail loans, lenders look into the applicant’s repayment capacity before approving or rejecting a loan application. Your credit score plays a major role in deciding your repayment capacity against a loan.

If you have a poor credit score on your credit report, chances of your loan application being rejected are high. The unsatisfactory credit score gauges your creditworthiness which banks and financial institutions consider before processing your loan application. Hence, it is advised to go through your credit score and credit report before you apply for a loan.

In case you have a poor credit score, consider improving your score by making your debt repayments on time before you reapply for a housing loan again. If you do not know what your current score is, you can get your credit score along with the credit report on BankVallet.

Loan Amount:

Since purchasing/constructing a home is a one-time investment, we often tend to overlook the financial costs involved in it. Banks and financial institutions fix the maximum loan amount you are eligible for by taking your present monthly income. There is a high chance your application was rejected because of the loan amount you have applied for.

If the loan amount applied for exceeds your eligible loan amount, the lender can decide to reject your application. In such cases, you can consider increasing the down payment on your home loan to bring down the loan amount.

Other Ongoing Loans:

Banks can also choose to reject your home loan application if you have too many other ongoing loans. Since home loan lenders see to it that not more than 50% of your monthly income is being contributed to your loan repayments, any other ongoing long-term loans can result in your application being rejected.

Having too many ongoing loans will not only impact your personal finances but also your repayment capacity. Hence, it is advised to clear the ongoing loans, if any, before you apply for a housing loan.

Co-applicant:

There can be instances where applications are rejected due to low income. In such cases, you can consider adding a co-applicant such as a member of your immediate family. This will increase the maximum amount you are eligible for as the income and creditworthiness of the co-applicant will also be taken into account while deciding your eligibility.

Employment:

In some cases, the employment of the applicant can act as the deciding factor on whether the loan application is being approved or rejected by the lender. Your application can be rejected if the lender learns that you have been switching between jobs frequently.

Unstable employment can sometimes prove to have a negative impact on your loan application. On the other hand, stable employment with a recognized institution on your application can have a positive impact.

In case you’re housing loan application was rejected, and you have only been working with the current employer for a short period of time. You can consider giving it some more time before re-applying for another one.

Documentation:

Housing loans include a lot of documentation such as identity proof, residential proof, bank account statements, income tax returns, income proofs, property papers, documents approved by concerned authorities, etc. Your loan lender can reject your loan application even if one of the required documents is not submitted.

You can always consult the banks’ customer relationship executives to assist you with proper loan documentation.


How To Apply for a Home Loan

1

Compare the best home loan packages

At BankVallet, we give you an overview of the latest home loan packages available in the market. With just a few clicks, you’ll be able to compare the best interest rates from our Banks and Financial Partners.

2

Get in touch with our Home Loan Specialist

From knowing your loan eligibility to getting your IPA, we’ll fill you in with all the pertinent details regarding home loan. Our Home Loan Specialists will help you throughout the process and give you unbiased advice.

3

Apply for your home loan

Once you have your IPA, we can get started with your home loan application. We understand that this is a major life decision and we’re here to guide you. With our help, the home loan application process can be completed within 2 working days. Although, some banks and financial institutions may take up to a week to complete

Why Get Your Home Loan
Through Us?

Simple, Fast, Convenient

Leave your home loan research to us and we will break it down for you in simple terms. Our Home Loan Specialist will contact you directly so you can save time for other important things in life.

We compare so you get better deals

Feeling so spoilt for choice you cannot decide? Settling for the first option is like being forced to marry the first person you come across on a matrimony app. Don’t feel pressured. We compare across all banks in TamilNadu to ensure that you get the best deals.

Most importantly it's free!

Our service to you is free. But, of course we are not doing this for charity! All banks pay us a standard referral fee for our services and our awesome job done. We don’t take sides or give biased advice.

We have helped thousands Tamilnadu consumers choose and apply for their home loans

Lovable team. My Home loan search ends here. Thank you BankVallet team for your wonderful service and guidance. I love BankVallet team and also I recommend them to all.

SivaSubramanian Chockalingam
Employed full time

I got my home loan from Punjab national bank with huge support of bankvallet loans. They give wonderful support to get my home loan fast and reasonable rate of interest. I strongly recommend bankvallet loans to all.

Senthil Kumar
Employed full time

I strongly recommend bankvallet team to all. I purchase my dream home with HDFC Bank home loan. I am very much happy with bankvallet team, they guide me lot because I'm a first time home loan borrower. Bankvallet loan services are very fast and free of cost.Thank you.

Yogesh R
Employed full time

We Work with All Major Home Loan Providers

Frequently Asked Questions

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Do I need to go to a Banks/NBFC branches to get a loan against property?
  • No, there is no need to visit Banks/NBFC branches to apply for a loan against property. We have made the process simple; you can apply for a loan against property through our website.
  • You can submit required details through our bankvallet.com website and we will call you back and let you know about eligibility and application status. BankVallet will have the necessary documents picked up from your residence or office.
  • If you have any questions regarding the loan against property application process, please feel free to contact our customer care at 90470 45470 or write to us at wecare @bankvallet.com.
How long does it take to get a home loan?

At BankVallet, we have simplified the process of obtaining a home loan. You can visit our website and apply for the loan by submitting your details. We will call you back and notify you if you are eligible. Thereafter, you can submit your documents to our representative who will visit either your home or office as per your convenience. We strive to process the complete application within 72 hours of complete document submission. If you have any questions regarding the home loan application process, please feel free to contact our customer care at 90470 45470 or write to us at wecare@bankvallet.com.

How will Banks/NBFCs determine my home loan eligibility?

There are a number of factors that are taken into consideration before we approve your application for a loan against property. These include:

  • Your age: You should be at least 23 years at the time of loan application and maximum 70 years of age at the time of loan maturity.
  • Your work experience: Banks/NBFCs require salaried employees to have 5 years of work experience while self-employed individuals should have been in business for at least 2 years.
  • The property: The property should have a clear title. Banks/NBFCs also take into account the valuation of the property.
  • Good credit rating: Banks/NBFCs examine your CIBIL record; They extend credit to individuals and entities with a good credit rating.
Which factors determine my home loan eligibility?

Banks/financial institutions consider the following factors when determining your loan eligibility:

  • Age
  • Annual Income
  • Occupational stability
  • Resident type [Indian Citizen, Non-Resident Indian (NRI), Person of Indian Origin (PIO)]
  • Number of co-applicants
  • Co-applicants' income
  • Credit score
  • Other ongoing loans, if any
What is the difference between a fixed rate and floating rate home loan?

The rate of interest associated with fixed rate loans remains unchanged during the entire tenure of the loan. On the other hand, the interest rates applicable on floating rate loans can be revised from time to time depending on the RBI key policy rates. The equated monthly installments can increase or decrease depending on the prevailing RBI rates in the case floating rate type loans.

Can I prepay my outstanding home loan amount?

Yes, you can choose to prepay your outstanding loan amount either partially or in full before the completion of your loan tenure. While banks do not charge any prepayment fee on floating rate loans, fixed rate home loans attract a penalty up to 2% of the loan amount if prepaid through refinance.

Can I avail tax deductions on my home loan?

Yes, you can avail tax benefits on both the interest and principal component paid against your home loan. As per Section 80C of the Income Tax Act, you can avail deductions up to Rs.1.50 lakh on the principal amount repaid annually.

Under Section 24 of the IT Act, taxpayers are also eligible for benefits up to Rs.2 lakh on the interest repaid against a home loan annually.

Who can be a co-applicant?

The co-applicant can be an immediate family member such as your spouse, your parents or even your major children. It is also mandatory for all co-owners of the property to be co-applicants while applying for a loan. However, the co-applicant need not be a co-owner.

What is Pre-EMI?

Pre-EMI is defined as the interest that is to be paid to the loan provider until the entire loan amount is disbursed. The Pre-EMI is payable on a monthly basis until the last disbursement, post which the regular EMI will be applicable comprising the principal and interest components.

What are the types of home loans available?
Home Purchase Loan:

Suitable for those looking to purchase a new house/flat or an under-construction property.

Home Construction Loan:

Can be availed by those looking to construct a house/property according to his/her plan.

Home Conversion Loan:

Suitable for those looking to purchase and move to another property when they have already bought a house with a home loan.

Plot Loan:

Can be availed by eligible borrowers looking to purchase a residential plot for the purpose of construction of a house/dwelling unit.

Home Improvement Loan:

These loans are sanctioned to those looking to repair/improve/renovate an already existing property.

Home Extension Loan:

Suitable for those looking to extend/expand/alter the structure of an existing property.

Home Loan Balance Transfer:

Can be availed by those who wish to transfer their outstanding home loan balance from their existing lender to another lender due to reasons such as reduced interest rates or better customer service.

Home Loans for NRIs:

These home loans cater to the housing needs of NRIs in the country. They also include PIOs and OCIs.

What is MCLR?

Marginal Cost of funds based Lending Rate is the benchmark rate set by a lending institution below which they cannot provide loans to their customers.

Can I switch from a fixed rate to a floating rate during my home loan tenure?

Yes, you can switch from a fixed to floating rate of interest on your home loan during the repayment tenure. However, you will be charged a conversion fee by the lender in such cases.

When does my loan repayment period begin?

The loan repayment period begins only after the loan provider has disbursed the entire home loan amount. However, you will be required to pay the interest i.e. pre-EMI on the partially disbursed loan on a monthly basis, in most cases.

Can I take 2 home loans at the same time?

Yes, you can take 2 home loans at the same time provided that your lender approves your eligibility to manage 2 Equated Monthly Installments (EMIs) at the same time. However, the tax benefits on the second house will be different and you will be required to establish the property as self-occupied or let-out property.

Can I get 100% financing on a home loan?

No. Banks/financial institution do not grant 100% of the property value as home loan. Home loan lenders establish a margin on their loan i.e. the percentage of the cost that the lending institution will be covering. For example, if the margin on the loan is set at 10%, the bank will cover 90% of property value. In such cases, you will be required to a make a down payment of the balance amount, i.e. 10% in order to cover for the rest of the cost.

Does having a personal loan affect home loan eligibility?

When determining your home loan eligibility, the lender makes sure that your monthly repayments are not being affected by any other ongoing loans such as personal loan, two-wheeler loan, etc. However, other ongoing loans ultimately tend to affect your eligibility as your overall spending power is reduced. If your other loan commitments exceed 50%-60% of your monthly income, your home loan application may be rejected.

Is personal loan better than home loan?

If you are buying a house, home loan is the best option. Usually you will not be eligible for a personal loan for as high an amount required for the purchase of a house. If you want extra money for non-specific personal needs, then go for a personal loan. Home loans also have an added advantage of top-up loans wherein you can request a top up on your loan amount to cover additional needs such as furnishing your house.

Can I buy a house with two loans?

No, you cannot avail two home loans for the same property. Any such practice will be considered fraudulent. The Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) ensures that fraudulent practices such as availing two housing loans for the same asset/property are prevented.

How do joint home loans work?

A joint home loan can be availed by adding a co-applicant such as your spouse, parents, or an immediate family member on your application. Adding a co-applicant will increase your home loan eligibility as the lending institution will also be considering the co-applicant's income and credit score when determining your loan eligibility. All co-owners of the property are required to be the co-applicant for a loan. However, the co-applicants need not necessarily be the co-owner of the concerned property.

A GST rate of 18% will be applicable on banking services and products from 01 July, 2017.