What is a Home Loan?
Everyone has a dream of owning their own house. However, not everyone has the necessary monetary support to purchase one. If you want to own a house for residential purpose, then you can opt for home loan at loanbaba.com. Home loans are secured loans. The financial institute will retain the property documents as collateral. You can simply compare top banks and NBFCs (non-banking financial companies) offers on housing loan and apply for the loan.
It takes less than 2 minutes to complete the application. Loan amount available is up to Rs. 1 crore or less with interest rate starting at 8.35%. The loan can be applied by salaried, professionals, self-employed, and businesspersons. The tenure can extend till 20 years to 30 years. The repayment options are flexible and suited to fit your repayment capacity.
Why Choose a Home Loan/What is the Purpose of Housing Loans?
You can take home loan for purchase of old or new property of residential purpose. It can be a flat, a piece of land, or any residential property. Agricultural, industrial, and commercial properties are excluded from the scheme. The housing loan can be used for home extension, construction, repair, and renovation as well. Sometimes, you want additional loan on existing loan, and opt for a top up home loan.
There are no unsecured home loans as in the bank or NBFC will keep the property documents as collateral. However, you can stay in the house and use it for residential purpose even while the repayment tenure is ongoing.
Things to Consider before You apply for a Home loan
Here are the things to remember before you apply for home loan urgent need based or planned basis:
- Home Loan Eligibility: The criteria for housing loan eligibility can be different as per personal profile and determined on basis of work stability, employment history, your age, income, credit history Check your home loan eligibility before applying for the loan.
- Loan Disbursal Time: It may take few days to process and disburse housing loan as there is a thorough check of documentation.
- Interest Rate (fixed or floating): Your loan provider can either charge fixed or floating interest rate. Fixed interest rates are best for short tenure, and floating rates for longer period. Hybrid home loans are where you can enjoy benefit of both floating and fixed rates.
- Terms and Conditions: There could be certain conditions regarding loan balance transfer, prepayment, repayment, and other things related to your housing loan. Know these in details before making a choice.
- Hidden Charges: The bank or NBFC can levy some charges such as processing charge or late payment charge etc. It is best to read the loan agreement before selecting the loan provider.
Features and Benefits of Home Loan
Below mentioned are some of the benefits of housing loan:
- Maximum Loan Amount: You can get 60 percent to 80 percent of the house’s purchase value. However, you need to pay 20 percent as down payment.
- Flexible Tenure: The tenure of home loan is one of the longest. You can repay between 1 year to 15 years and sometimes up to 20 years to 30 years. Repayment tenure depends on the home loan borrowed and other factors.
- Low Interest Rate: Since the loan is secured, the home loan rate of interest is low. At our website, you can get rates as low as 8.35%. The rate can be either fixed or floating or combination of the two.
- Tax Benefits on Home Loan: Under Section 24 of the Income Tax Act, you can claim exemptions in tax of up to Rs. 2 lakhs for EMI’s interest component paid in a financial year. Additionally, you can claim tax benefits of up to Rs. 1.5 lakh on principal amount paid under Section 80 C of the Income Tax Home loan tax benefits are valid for co-applicant as well.
- Improve Home Loan Eligibility with Co-applicant: You can add your spouse or blood relative as co-applicant for the loan and improve your eligibility for securing home loan.
Types of Home Loans in India
Home loan is a broad category and there are various categories in it. Some banks and NBFCs offer loan to purchase new or existing property, while other offer loan based on borrower’s need for renovating the house and additional expenses. There are collateral free home loans as the housing loan is secured in nature and the lending institute retails the property papers as collateral.
Below are the sub-types of housing loan in India:
- Loan to Purchase House: This is the typical loan you can take to purchase new or old residential property. Tenure ranges from 1 year to 15 years and in some cases 30 years.
- Plot Loans/Land Purchase Loans: These loans are taken to buy land or plot for investment or construction. The funds are used to purchase vacant plot.
- Top up Home Loan: If you have an existing home loan but want additional loan to purchase the house or make renovations in the same, then you can take top-up online home loan apply from loanbaba.com.
- Home Extension Loans: If you want to add more space to your house then you can choose home extension loan and extend your house area.
- Home Conversion Loans: If you own a house that has an existing housing loan, but plan to buy a new house, then you can take home conversion loan.
- Home Construction Loans:If you want home loan for constructing a house on a plot or land, then you can get sufficient funds in form of home construction loan.
- Home Improvement Loans: You can apply for a home loan to renovate or repair your current house.
Home Loan Eligibility Requirements
To be eligible for a home loan you need to check for home loan eligibility calculator and criteria. The housing loan eligibility will differ from one financial institute to other but broadly depend on your income, age, credit score, employment information etc. Housing loan is provided to self-employed, professional, salaried individual of Indian nationality.
- Income: You should have a regular source of income and display healthy repayment ability. For self-employed and businesspersons, the profit on business earned will decide the income limit for housing loan, and for salaried individual it is the monthly salary.
- Age: You as an applicant must be more than 21 years of age.
- Credit History: A clean credit history will help you get quick home loan online at loanbaba.com. You can check free credit score or CIBIL score at our website.
- Employment Experience: You should be employed with current employer for specific number of years, as asked by the financial institution.
Documents Needed for Home Loan
Applying for loanbaba home loan requires you to submit following documents, however, the documents required may differ depending on your employment type.
Cost estimation or valuation report approved by the bank of NBFC.
Copy of documents giving approval to proposed construction/extension plan.
Filed and signed home online loans application form. Recent invest proof (if any). Recent passport sized photographs.
Last 6 months salary slips, salary account statement for salaried individuals.
Proof of identity such as copy of voters ID card, PAN Card, Aadhar Card, Driving license
NOC letter from society/builder/municipal, allotment letter given by housing board etc.
IT department acknowledged copies of documents such as sales receipts, profit and loss statement certified by legit authority.
Acceptable address proof such as government issues ID proofs, utility bills, electricity bill etc.
Home Loan Interest Rates
The home loan interest rates bases on marginal cost of lending rate (MCLR) plus a spread on the MCLR that depends on lender’s risk perception about the borrower. At loanbaba.com, you can get loans online for purchasing residential property starting at 8.35%. Almost every financial institute offers competitive interest rates to attract customers. You can compare home loans interest rate at loanbaba.com to get the lowest rates possible.
The housing loan providers can either offer fixed or floating interest rate today. Floating interest rate change with market conditions whereas fixed rates remain fixed and do not change. You can choose either as per the available options for the loan provided by the lender.
Complete Checklist to Apply for Home Loan
Before you apply for home online loan at loanbaba, do keep in mind these points:
The loan amount can be based on your credit history and score, locality, city, your income, financial condition etc.
You can give a joint application for housing loan, with family members or spouse as co-applicants.
There could be applicable charges for registration, late payment, processing fee, and other miscellaneous charges.
The repayment tenures can go up to 15 years or more. Prepayment without penalty is possible.
A margin of minim 20 percent is maintained by the financial institute before sanctioning home loan. Thus, the loan amount can cover a maximum of 80 percent of the house value.
If for some reason you cannot pay the loan, the financial institute can legally auction off the property for recovering outstanding loan amount.
Top 10 Providers of Home Loan in India
There are many providers of housing loan in India. The amount of loan and interest may vary from one financial institution to others. But, you can always compare home loan loanbaba online to know the best deals. Some of the providers you can apply with are: Axis Bank, HDFC Bank, PNB Housing Finance, Indiabulls, State Bank of India, LIC HFL, Canara Bank, Bank of Baroda, TATA Capital, Dena Bank, and others.
Home Loan EMI Calculator
Loanbaba.com provides you free-of-cost home loan EMI calculator so that you can take an informed decision and choose the right loan option at affordable rate. Additionally, you learn to manage your finance by knowing the monthly cash-outflow towards the loan repayment. You can check EMI for housing loan within seconds with this financial tool. The EMI calculator considers the loan amount, interest rate and tenure to show the exact equated monthly instalment you have to pay.
You will also receive a complete amortization sheet to understand the EMI payment schedule through the loan tenure for every year. The instant results from using this tool helps in saving time taken to calculate manually using the formula: EMI = [P x R (1+R) N]/ [(1+R) N-1], where E is the EMI, R is the rate of interest estimate on monthly basis, P is the principal loan amount.
Why Choose Loanbaba.com to Help You Find a Home Loan?
We at loanbaba.com offer you best home loan options from top banks and NBFCs. You can use free-of-cost financial tools such as home loan EMI and eligibility calculator and get instant quotes from banks and NBFCs. Following are certain benefits of taking a home loan from our website.
- Top Offers at One Place: You can find best banks and NBFCs offers on home loan with all details about interest rate, tenure, loan amount, documents needed, charges, fees, eligibility etc listed on one page so that it is simple to compare, select and apply for the loan.
- Easy Online Application: The application of home loan online makes it easier to fill the application form where only a few details are asked. You can provide the documents online so no need to submit hard copy. It takes less than 2 minutes to complete the loan application.
- Blog and Guide to Home Loan: We have a complete knowledge centre on home loanand related subjects. The information is well-researched and gathered to help ease your process to take a housing loan in India.
- Quick Customer Support: We are available on live chat, toll free number, SMS, email address, and even through a simple missed call. Our customer representative contacts you instantly to answer your loan queries and guide you through the loan process.
- Instant Disbursal: As soon as the home loan is approved, the amount is disbursed to your bank account. You can keep a track of your home loan application online on our website.
Frequently Asked Questions on Home Loans
The home loan is provided by estimating the current market value of the property. Market value is the calculation of what a property price is in the competitive market, and this depends on benefits and features of the property, supply and demand, overall real estate market evaluation, and other similar properties to determine the monetary value of the house.
No, it is not compulsory to insure the property you want to purchase on home loan. However, financial institutions may offer loan faster to a borrower who plans to insurance the house or has applied for the home insurance. The insurance offer complete cover to the property, especially if it under construction, and can pay for any damages within the insured period.
You can seek home loan for all the home loan requirements as specified by the banks, be it a first-time purchaser of property or first-time applicant for home loan. You must meet the eligibility criteria and have a good repayment capacity.
You can take a home loan for construction or buy a property out-of-state or in a different city than the one you are working in. Keep the essential documents prepared for verification. The financial institution will provide the loan only after running a thorough check on property’s legal verification and other checks.
Your home loan amount depends on your financial profile such as employment history, credit score, repayment history, current liabilities, monthly income, and other financial responsibilities. You can co-apply for the loan with a family member or spouse and the amount of loan can be increased, as the income of the co-applicant will be taken into account when deciding the loan amount. Also, you can improve your credit score to attain better loan amount and interest rate.
The property in question must not be too old. It should be in a good condition. If there is an ongoing loan on the house, the same has to be transferred on your name. Make sure the house is free of legal disputes and all the documents are in place. Check for property valuation before taking the loan for property purchase.
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