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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.
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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.
Home Loan Lender(Banks)
Starting Interest Rate(p.a)
Processing Fee
Types of Interest
Aditya Birla Capital
9.05% p.a onwards
As low as 1% of the loan amount
Floating
HSBC Bank
8.60% p.a onwards
Up to 0.1 per cent of the loan amount
Floating and Fixed
Citibank
6.5% p.a onwards
Rs. 10,000
Only Variable Interest rate
Canara Bank
8.85% p.a onwards
0.5 per cent of the loan amount
Floating only
Karur Vysya Bank
9.23% p.a onwards
Rs. 20,000
Variable based on loan amount
Bank of Baroda
8.60% p.a onwards
Variable
Floating only
Bajaj Housing Finance
8.60% p.a onwards
Upto 7 per cent of the total loan amount
Floating only
Bank of Maharashtra
8.40% p.a onwards
Variable
Both Floating and Fixed
IDFC First Bank
8.45% p.a onwards
Between Rs. 5000 and Rs. 10,000
It provides other Floating and Fixed interest rate packages as well as the option of mixing one too
Punjab National Bank
8.75% p.a onwards
0.35 per cent of the total loan amount to Rs. 15,000
Floating rate
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 and cons
Pros
Cons
Competitive interest rates
Stringent assessment of property
Quick and transparent loan processing mechanism
Calculation of interest on the daily-reducing balance
Multiple options to choose from for loan repayment
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 and cons
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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 and cons
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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 and cons
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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 and cons
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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 and cons
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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 and cons
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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 and cons
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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 and cons
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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 and cons
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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.
HSBC provides people with the lowest interest rate on home loans, which range from 6.85% to 7.5 % p.a.
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.
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.
Author Name: Harsh Goyal
Note: "Each article is meticulously crafted by our team of finance experts, incorporating user and community feedback to evaluate and select financial products and brands rigorously. Their thorough approach ensures only the most reliable and relevant financial solutions are recommended to our readers."
Author Bio: Written by Harsh Goyal, a distinguished finance expert, consultant and seasoned researcher. With a strong academic background in finance, Harsh combines in-depth knowledge of financial markets, investment strategies, and economic trends with practical experience. As a part-time writer, he translates complex financial concepts into accessible insights, making him a valuable resource for both industry professionals and casual readers looking to understand the nuances of finance.
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