A home loan is a financial product that enables individuals to borrow funds from a financial institution for the purpose of buying, building or renovating a home. The borrower secures the property as collateral for the lender and repays the loan in installments over an agreed-upon period, including interest.
Home Loan Product
The standard home loan is the most common type of loan that helps individuals achieve their dream of purchasing a home. Essentially, a home loan allows you to borrow money from a lender to buy a property of your choice, which you then repay in monthly installments. If you meet the eligibility criteria, the lender may approve 80% to 90% of the property’s cost as a home loan.
Plot Loan provides an opportunity to the customer to purchase a plot for construction of a dwelling unit. The construction of the house should be completed within 3 years from date the loan has been sanctioned/disbursed.The customer can also avail another Home Loan for construction of house on plot financed under plot loan.The maximum amount of loan that can be offered to a customer can range up to Rs. 15 crores with a comfortable repayment of 10 years.
If you already own land and want to build your dream home, a home construction loan might be ideal. Unlike a basic home loan, where the lender disburses the loan amount in a lump sum, a home construction loan is typically disbursed in stages based on the progress of the construction. The approved amount is usually based on the estimated construction costs.
Maximize your savings with our Home Loan Balance Transfer feature, which lets you switch your existing home loan to our partner bank for a lower interest rate or a higher loan amount.Transfer your home loan to our recommended bank and take advantage of reduced interest rates or increased loan eligibility, cutting down your monthly payments and boosting your savings.Save more by transferring your home loan to our partner bank, where you can benefit from lower interest rates or a larger loan amount, making your monthly installments more affordable.Optimize your monthly finances by shifting your home loan to our recommended bank, allowing you to enjoy lower interest rates or access a higher loan amount with ease.
A popular type of home loan is the home extension or improvement loan. If you already own a home and wish to add a room or floor, a home extension loan can assist you. Similarly, a home improvement or renovation loan helps in renovating an existing home. These loans can cover expenses that could amount to lakhs of rupees, enabling you to expand or renovate without depleting your savings.
Any personal purpose such as meeting expenditure on education, marriage, healthcare, etc. other than speculative purpose. An undertaking to this effect will be obtained from the customer in the application itself and no documentary evidence for end use of the fund will be insisted upon.
You can now apply for a top-up on your existing home loan and use the funds to fulfil a host of requirements such as home renovation, marriage expenses, business expansion, funding your child’s higher education or any other personal needs with the combination of an overdraft facility.
Home Loan Checklist
KYC
1.Pan Card and Aadhar Card (Mandatory)
2.Address proof(Any One)Aadhar Card/Voter Card/Passport/Driving License/Recent Copy of Any Utility Bill(Telephone/Gas/Electricity)
Income Proof
| Serial Number | Documents | Salaried | Self Employed | Non-Resident Indians (NRIs) |
| 1 | Recent Copy of Present Company Employer Certificate/HR Letter and Company Appointment Letter | ✓ | – | ✓ |
| 2 | Latest 3 Months Salary Slips | ✓ | – | ✓ |
| 3 | Latest six Months’ Salary Credited Bank Statement | ✓ | – | ✓ |
| 4 | Latest 2 Years’ Form 16 and ITR Returns | ✓ | – | – |
| 5 | Income Tax Returns along with computation of income for at least the last 3 Assessment Years (of both the individual and the business entity and attested by a CA) | – | ✓ | – |
| 6 | Latest 3 years’ Balance Sheet and Profit & Loss A/c Statements, with Annexures / Schedules (of both the individual and the business entity and attested by a CA) | – | ✓ | – |
| 7 | Latest 12 months’ Current A/c Statements of the business entity and Savings Account Statements of the individual | – | ✓ | – |
| 8 | If any previous loan from other Banks/Lenders, then Loan A/C statement for the last 1 year | ✓ | ✓ | ✓ |
| 9 | A copy of valid visa or work permit | – | – | ✓ |
| 10 | Relevant passport pages (with overseas address) | – | – | ✓ |
| 11 | Overseas address proof: Government issued National Identity Card/ Driving license/ Utility bill/ Overseas bank statement | – | – | ✓ |
| 12 | Credit Bureau Report (in case available in the country where you are residing) | – | – | ✓ |
| 13 | Overseas address proof: Government issued National Identity Card/ Driving license/ Utility bill/ Overseas bank statement | – | – | ✓ |
| 14 | Any of the following for NRIs with Seafarer work profile: 1.Valid job contract 2.Continuous Discharge Certificate (CDC) (if disembarkation stamp is not older than 6 months) 3.Expired Contract Letter (if disembarkation stamp is older than 6 months) 4.Last salary slip as proof of employment with a shipping company | – | – | ✓ |
Property Documents
| Documents | Purchasing from Builder | Purchasing from Land-owner | Purchasing from Seller (Re-Sale Property) |
| Sale Agreement | ✓ | ✓ | ✓ |
| Assignment Agreement* | – | – | ✓ |
| Sale Deed Copy | – | – | – |
| Khata Certificate | – | ✓ | ✓ |
| Recent Property Tax Paid Receipt | – | – | ✓ |
| Seller KYC | – | ✓ | ✓ |
| Cost Break Up | ✓ | ✓ | ✓ |
| Builder/ Seller NOC | ✓ | ✓ | ✓ |
| Financer NOC(If Property Mortgage) | ✓ | ✓ | ✓ |
| Demand Letter | ✓ | ✓ | ✓ |
| Margin Proof (Paid Receipts toward Seller/Builder) | ✓ | ✓ | ✓ |
| Encumbrance Certificate (EC) | ✓ | ✓ | ✓ |
Assignment Agreement require when property not registered*
Note: The above list is indicative and your lender might ask for additional documents. lenders will assess your eligibility for home loan on the basis of your income and repayment capacity. The other important considerations include age, qualification, financial position, number of dependants, spouse’s income and job stability.
Home Loan Eligibility
The eligibility for a home loan primarily depends on an individual’s income and repayment capacity. Other important factors include the applicant’s profile, age at loan maturity, the property’s age at loan maturity, investment history and savings record.
| Age | Minimum 18 Years and Maximum 70 Years |
| Nationality | Indian,Residing in India and Non-Residing Indian |
| No. of Co-Borrowers | Restricted up to 6 |
| Tenure | 30 Years |
EMI/NMI Ratio
EMI: It stands for Equated Monthly Installments. This is the scheduled monthly payment required to be made to the lender against the loan. It is calculated based on the loan amount, applicable interest rate and loan tenure.
NMI: NMI stands for Net Monthly Income. It refers to the disposable income a prospective borrower receives monthly, which is used for personal consumption and repayment of outstanding debts and liabilities.
| Net Annual Income | EMI/NMI Ratio |
| Upto Rs.1,20,000 | 20% |
| Rs.1,20,000-Rs.3,00,000 | 30% |
| Rs.3,00,000-Rs.5,00,000 | 55% |
| Rs.5,00,000-Rs.8,00,000 | 60% |
| Rs.8,00,000-Rs.10,00,000 | 65% |
| Rs.10,00,000-Above | 70% |
Higher Eligibility for Salaried Individuals: If the CIBIL score is above 750 and the annual income is Rs.10 lakhs, a loan may be approved with an EMI/NMI ratio of 75%.
Loan-To-Value(LTV)
As per RBI guidelines on LTV, the Loan-to-Value (LTV) ratio that banks in India can offer for home loans is regulated by the Reserve Bank of India (RBI). Therefore, a bank cannot lend more than the maximum LTV prescribed by the RBI.
According to guidelines issued by the Reserve Bank of India (RBI), the LTV ratio for Home Loans can go up to 90% of the property value for loan amounts of Rs. 30 lakh and below. For loan amounts that are above Rs. 30 lakh and up to Rs. 75 lakh, the LTV ratio limit has been set at 80%, while for loan amounts above Rs. 75 lakh, the LTV ratio can go up to 75%.
Moratorium Period
Moratorium period of 18 months may be considered adequate up to 7 floors for each tower.Beyond that we may consider additional 6 months for each 7 floors subject to a maximum period of 36 months.
Tax Benefits
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:
Section | Nature of Tax Deduction | Maximum Deduction (INR) |
Section 80C | Tax Deduction on Principal Repayment | Up to Rs.1,50,000 |
Section 24B | Tax Deduction on Interest Paid | Up to Rs.2,00,000 |
Section 26 read with Section 24 | Tax Deduction on Home Loan for Joint Owners | Up to Rs.2,00,000 respectively for each of the joint borrowers who are co-borrowers |
