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Home Loan: Lowest Home Loan Interest Rates in India (2024)
Looking to know the lowest home loan interest rate in India? Read this article to know the detail.
Currently, numerous banks in India provide home loans. However, many people still find it difficult to afford one due to the high loan interest rates, which is not good. If you are among them and are looking to know the lowest home loan interest rate in India, then you should read this article to learn all the details-
The best and the lowest home loan interest rates are those from Aditya Birla Capital for loans lasting up to 30 years. In addition, they handle loans quickly and transparently and nearly never levy prepayment penalties for fluctuating interest rates. They additionally offer door-to-door services.
A Home loan interest rate, simply referred to as the cost, is charged for funds borrowed from a bank or any other Financial Institution to construct, purchase, or repair a house. It is determined as a percentage of the principal amount loaned, and it is either constant (fixed interest rate) or variable (floating interest rate), depending on current market conditions on the maturity of the loan. It will determine the monthly instalments for paying off the loan (EMI) and the total outgo for repayment of the entire loan amount within the stipulated time.
Visit the official websites of top banks: A greater number of banks post the interest rate for home loans on their sites.
Use loan comparison websites: Through sites, such as BankBazaar, Paisabazaar and MoneyControl one can get rates from various banks depending on eligibility.
Check loan eligibility calculators: These common online resources help get an approximate interest rate based on credit scores, income, and the tenure of the loan.
Contact the bank directly: It is also useful to contact the banks to receive a more personalised offer depending on your credit history.
Check for Special Offers: The lending institutions provide attractive low-interest rates at some events, like festivals, or even to women burrowers.
Assess Processing Fees & Additional Charges: On top of interest rates, there are other charges such as processing fees, prepayment penalties, and other ‘unseen’ fees.
Review Interest Types: Lenders provide these two main types of interest rates, fixed and floating. The borrower has to weigh both rates in determining which can work best for their needs.
The right bank for a home loan depends on the borrower's needs, eligibility criteria and current market options. Interest rates can vary depending on monetary policy, liquidity and competition that exists between banks.
State Bank of India (SBI)
Provides good interest rates for the salaried and self-employed and special ROI to women.
HDFC Bank:
Competitive rates with flexible tenure options.
Streamlined processing with robust customer service.
ICICI Bank:
Customisable loan solutions with competitive interest rates.
Various repayment options to suit different financial profiles.
Kotak Mahindra Bank:
Offers low-interest rates and quick loan approvals.
Special schemes for balance transfers with reduced rates.
Cibil Score - Min 700
Job Status - Self-Employed or Salaried
Longest Tenure - 30 years
Age - 21 to 65 years
Minimum Income - Salaried: ₹5,00,000 p.a.; Self-employed: ₹7,50,000 p.a.
Range of Interest - 9.05 % onwards
Documents Required - (1) Document of identity: PAN Card, Aadhar card, Passport, Driving Licence; (2) Document of address proof: Aadhar card, Passport, Voter Car; (3) Property papers; (4) last 3 months' pay slip for salaried people; (5) last 6 months' bank statements, IT returns and PL statements of last 2 years for self-employed people.
Ways to Apply For a Loan
You can apply for a house loan with Aditya Birla Capital offline and online, which is wonderful. If you want to apply online, go to their website, complete the house loan application, and upload your supporting documents. If you prefer to apply offline, visit their nearest physical branch for assistance.
Pros
Competitive interest rates
Quick and transparent loan processing mechanism
Multiple options to choose from for loan repayment
Cons
Stringent assessment of property
Calculation of interest on the daily-reducing balance
Cibil Score - Min 700
Job Status - Self-Employed or Salaried
Longest Tenure - 25 years
Age - 21 - 65 years
Minimum Income - 5 Lakhs p.a. For salaried and 7.5 Lakhs p.a for self-employed
Range of Interest -8.60% p.a
Documents Required - PAN Card, Aadhar card, Passport, Driving Licence, Address Proof such as Voter Identity card, property documents along with legal clearance, latest 3 months' salary slip and last 6 months' bank statements for salaried and IT returns along with PL statements of the last 2 years for self-employed individuals as income proof.
Ways to Apply For a Loan
HSBC offers you the benefit of applying for a home loan in both ways: offline and online, which can be great for you. If you want to apply online, you need to go to their site, fill out the form for a home loan and submit your documents, whereas if you want to apply offline, you should go to their nearest physical branch for help.
Pros
One of the lowest interest rates in India
Provides both types of home loan interest rate package
Easy to apply for a home loan
Cons
High income is required
Cibil Score - 680 and above
Job Status - At least 2 years of job experience
Longest Tenure - 25 years
Age - At least 21 years
Minimum Income - Rs. 15,000 to Rs. 20,000 per month
Range of Interest - 6.5% p.a
Documents Required - Filled loan application form, DOB proof, identity proof, address proof such as aadhar card, income proof for both salaried and self-employed, signature proof and passport-size photos.
Ways to Apply For a Loan
You have the comfort of applying for a home loan to Citibank in both ways, which can be great for you. If you want to apply online, you need to go to their website and follow some steps, and if you choose the offline option, you need to go to their physical branch and request the manager for the loan.
Pros
Very long tenures are available
Very huge loan amounts of up to 10 crores
Great customer support
Cons
Loan approval takes time
Cibil Score - 650 and above
Job Status - Self-Employed or Salaried
Longest Tenure - 30 years
Age - 21 - 75 years
Minimum Income - Rs. 25,000 per month
Range of Interest - 8.85% p.a
Documents Required - Loan application with two passport-size photos of the applicant, sale deed, copy of approved loan plan, legal scrutiny report, property tax payment receipt, salary certificate, and bank account to receive the loan amount.
Ways to Apply For a Loan
Canara Bank is among those that allow their customers to apply for a home loan even from online sites along with offline branches. You need to search their website for the loan you want, fill out a form, submit your documents and wait till your loan is sanctioned.
Pros
Trustworthy bank
Low eligibility criteria
Fast Approval Process
Cons
Income requirement is high
Cibil Score - Around 750
Job Status - Self-Employed or Salaried
Longest Tenure - 25 years
Age - 21 - 60 years
Minimum Income - Rs. 25,000 per month
Rate of Interest - 9.23% - 12.13% p.a
Documents Required - Proof of Identity such as PAN Card, Aadhar Card, Passport size photos, Voter card, address proof such as Job card, property document, pay slip of the last 3 months and last 6 months' bank statement for a salaried individual and last 3 years of PL statements, IT returns copies for self-employed individuals as income proof.
Ways to Apply For a Loan
Karur Vysya Bank offers the comfort of applying for a home loan from your house through its official website. It is pretty simple as you only need to follow some steps, enter some of your details and submit all the required documents to apply for a home loan.
Pros
Minimal Interest rate
Easy to apply for a home loan
Low Processing Fee
Cons
High Cibil score requirements
Cibil Score - 650 and above
Job Status - Self-Employed or Salaried
Longest Tenure - Upto 30 years
Age - 21 - 70 years
Minimum Income - Rs. 15,000 per month for the applicant
Range of Interest - 8.60% - 10.60% p.a
Documents Required – Filled loan form, passport size photos, identity proof such as Aadhar card, address proof such as Voter ID Card, Employee ID card copy, income proof as last 6 months bank statements for a salaried individual and last 2 years PL statement, IT returns and balance sheets for a self-employed individual.
Ways to Apply For a Loan
Bank of Baroda has a speedy loan approval process. Additionally, it allows people to apply for a home loan sitting at their house using their official website and filling out a form. And, if you are uncomfortable with the online loan process, you can also visit their nearest physical branch to get a home loan.
Pros
Very long tenures are available.
Large loan amounts of up to 20 crores
No prepayment charges
Cons
Provides only floating interest rate package
Cibil Score - Min 750
Job Status - Salaried
Longest tenure - 25 years
Age - 23 - 55 years
Minimum Income - Rs. 25,000 per month for the applicant
Range of Interest - 8.60% p.a
Documents Required – Documents must be submitted per your profile, income proof as KYC of both applicants, last 6 months' bank statement, copy of Index-II, and last 3 months' salary slip for salaried individuals.
Ways to Apply For a Loan
Bajaj Housing Finance is one of the best home loan options. It allows people to get affordable interest rates along with quick loan disbursals. There are two ways to apply for a home loan in Bajaj: online and offline. In the first option, you should visit their website, fill out a form for a home loan, submit your documents and wait till you get your loan sanctioned. And in the second option, you should visit their nearest physical branch and take the help of an agent for a home loan.
Pros
Step-up home loans are also available
Quick loan approval
Affordable processing fee
Cons
High eligibility criteria
Cibil Score - Min 650
Job Status - Self-Employed or Salaried
Longest Tenure - 30 years
Age - 21 - 75 years
Minimum Income - Rs. 25,000 per month
Range of Interest - 8.40% to 10.80% p.a
Documents Required – Filled application form, two signed passport-sized photos, identity proof such as an election ID card, Driving License, address proof such as an aadhar card, and income proof such as bank statements.
Ways to Apply For a Loan
Bank of Maharastra allows you to apply for a home loan offline and online. To apply for a loan online, you need to visit their website and follow the steps as per the given guidelines. And, in case you apply for a loan offline, you need to visit their physical branch and take the help of an official to apply for a loan.
Pros
No part-payment charge
No hidden rates
Affordable interest rate
Cons
Minimum salary requirements are high
Cibil Score - Min 700
Job Status - Self-Employed or Salaried
Longest Tenure - 30 years
Age - 21 - 70 years
Minimum Income - Rs. 8,333 per month for the applicant
Range of Interest - 8.45% p.a
Documents Required - Identity proof such as Aadhar card, Voter ID card, address proof such as driving license, PAN Card, income proof as salary slip for last 3 months if salaried and bank statements for last 12 months, P&L statement and balance sheets of the last two years if a self-employed individual.
Ways to Apply For a Loan
IDFC First Bank allows its customers to apply for loans in both possible ways that are online and offline, making its approval process fast. It also recommended choosing the online option to save time and money.
Pros
The quick loan approval process
Low eligibility criteria
Cons
Document requirements can be reduced
Cibil Score - Min 650
Job Status - Self-Employed or Salaried
Longest Tenure - Upto 30 years
Age - 21 - 65 years
Minimum Income - Rs. 15,000 per month for the applicant
Range of Interest - 8.75% p.a
Documents required - Age verification, educational qualification verification, identity proof, filled loan form, income proof, address proof
Ways to Apply For a Loan
PNB is also among those banks to whom you can apply for a home loan both ways that is online and offline. If you apply online, you need to go to their official websites, choose a loan, fill out a form, submit your documents and wait for some time. And, if you choose offline, you only need to go to their physical branch, and further steps will be told by the agents sitting there.
Pros
Increasable loan amount during the tenure
Large loan amounts are available
Cons
Only provides loan at floating rate interest
Currently, most banks provide two types of home loan interest rate packages with significance and benefits. They are as follows-
Fixed Interest rates do not change over the tenure, making them independent of the market condition. It allows people to have a fixed EMI amount. However, it is slightly higher than the floating interest rate.
As the name suggests, this interest rate is variable and changes according to market conditions. In a floating interest rate package, the lender sets a base rate slightly lower than the fixed interest rate and changes it per the condition. It is an excellent option for those who want to pay less EMI and save money. Many popular banks offer this rate package, including Bajaj Finance, CitiBank, etc.
Many people are unaware of a home loan's essential terms and conditions, which puts them in a problem after buying it. If you don't want to be one of them, then read some of the standard terms and conditions to know before getting a home loan in India given below-
You won't be aware that the money lenders, i.e., banks, include several clauses requiring you to provide additional security if the value of your property decreases over The home loan tenure. Therefore, it is always requested to go through the papers of the home loan agreement before signing it.
Some money lenders often include this clause in your home loan agreement, which requires you to be intimate with your lender whenever you change your job, move to another place or get a raise at work. This clause may not sound relevant right now or while signing the paper, but there are certain specifics in the agreements which tell you to do certain things in case of these instances during the loan tenure. And, in case of non-compliance, you even become eligible for a penalty.
Prepayment Charges
You should remember that home loans are eligible for prepayment charges. If you pay the total loan amount before your loan tenure, you may need to pay extra charges of around 5 to 7 per cent of the total loan amount. Most banks include this clause without informing you, which results in difficulties in the future, so make sure you check this out before signing the agreement.
Many things can affect your home loan interest rate and EMI in India and make them unaffordable. If you are unaware of them, you are in the right place. Here, we will discuss some of the most critical factors that can affect your home loan interest rate and EMI in India-
Whether you believe it or not. Even your property location determines your home loan interest rate. It plays a considerable role in the interest rate you will pay. Homes in a good locality with several nearby good amenities are likely to have a lower interest rate than those with less desired neighbourhoods. Money lenders are highly interested in homes with good resale value. Houses with lower resale value will have higher interest rates.
Individuals with a good and stable income are often considered low-risk. So, you will get a low home interest rate if you have a stable income source. For example, doctors and accountants are considered low-risk, whereas daily life workers are considered high-risk.
Home Loans with a short loan tenure attract a lower interest rate than those with long tenures, like 25 years. However, a person with long tenures will have less EMI. So, try to choose a loan you can repay quickly.
MCLR rates, popularly known as Marginal Cost of Funds-based Lending rates, are the minimal interest rates banks can lend to individuals. Certain things determine it, such as operating cost, CRR, and tenor premium. However, a twist is that it’s not fixed, and the interest rates can change based on it. There is usually an annual reset date during which banks review the current home loan interest rate and determine whether it needs a change.
Everyone wants to pay as little interest on home loans to save money. However, most of them find it difficult to do so. If you are among them, then do not worry. The reason is that here are some of the common ways you can use to reduce your home loan interest rate-
Your credit score is one of those things that tells how responsible you are when you deal with borrowed money. A score above 750 is considered very good and can allow you to get a home loan from every bank. Yes, it's challenging to keep a good credit score but to do so, you can follow some tricks, such as keeping track of payment history, how much you borrow money and the length of your credit history.
Moving with a planned approach toward buying your house with a home loan will be helpful. You can work towards making a large down payment while taking the loan, thus reducing the total loan account, and significantly reducing the interest.
Try to take loans with short loan tenures, as it is one of the primary factors responsible for your high home loan interest rate. While your EMI will go high by reducing the tenure, your lower interest rate will benefit you, in the end, a lot.
One of the best and time-saving ways to calculate interest on your home loan is using a Home Loan EMI calculator. Nearly every bank provides their customers with such calculators on their sites.
On this type of calculator, you must enter your principal amount, interest rate, EMI you need to pay, and other requested details. It will provide you with all the details, such as the interest you will pay throughout the tenure, EMI, the total loan amount and other important things. You can even use these details to compare different loan plans to find a suitable one.
In India, most of the banks avail Home loan interest rates that are all normally within a range of 8 % to 9.5 %.
The lowest interest rate for a home loan was around 3 per cent in Nov 2012.
An LTV ratio, also known as the loan-to-value ratio, is the percentage of the property value that a bank or any money lender can lend to any property buyer.
Yes, for any borrower with over 750 credit scores, home loan interest rates are lower.
Yes, several banks offer women a concession of 0.05% and in some cases 0.1% on the home loan rates.
If some banks allow you to change the loan type, they might charge a loan conversion fee as well.
Yes, most banks allow partial or full prepayment, though some may charge a penalty for early repayment, especially for fixed-rate loans.
Floating interest rates can be termed adaptable and reviewed every three months to six months based on the changes occurring to the benchmark rate in the bank.
Yes, applying for a joint home loan along with your spouse or partner may enhance the chances of being qualified and may also bring down the rate of interest.
Good Credit Score: Pay on time and have low credit utilisation.
Have All Information Correct in the Application: Ensure detailed but-point information.
Pay Off Outstanding Loans: Eliminate outstanding loans to decrease the DTI.
Continuous Employment: Stable employment shows the stability of the finances as well
Input Loan Amount: Enter the desired Home loan amount.
Enter Interest Rate: Use the rate offered by the lender.
Select Tenure: Choose the repayment period in months or years.
Calculate: The tool will display your monthly EMI and total interest payable.
Adjust Parameters: Modify inputs to find an EMI that fits your budget.
Assess Your Needs: Depending on your needs, consider the amount of the home loan, tenure, and any special requirements you have.
Compare Interest Rates and Fees: Lower interest rates reduce the total cost, but watch out for processing fees and other charges.
Eligibility Match: Select a particular bank so that you would qualify for the requirements needed for Home loan approval.
Customer Service: Choose a bank with quality customer service, especially, that deals with borrowers after issuing Home loans.
Existing Relationship: It is faster for people, who already have an account or previous loan with the bank.
If you want to build your own house but cannot afford home loans due to the high interest rates, then you should check out this article. It consists of the table of the banks offering the lowest interest rates along with their processing fee and other details. Besides that, you can also find several ways to reduce your home loan interest, which can help you make it affordable.
We hope this article has answered all your questions. If you have any further queries, please feel free to comment below.
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