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Home Articles How to Select The Best Home Loan in India? What Should I Consider?

How to Select The Best Home Loan in India? What Should I Consider?

IndianMoney.com Research Team | Updated On Monday, September 23,2019, 04:56 PM

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How to Select The Best Home Loan in India? What Should I Consider?

 

 

Jill Angelo, who is the founder and CEO of Genneve, once said, “Our homes say a lot about what we think is important in life and who we are.” Joseph Campbell, who was an American Professor of Literature, said, “Sacred Space is where you may find yourself again and again.” These two famous personalities have explained the importance of owning a house in their own styles. 

Owning a house is a tough choice, especially in metro cities and other big cities in India. In Mumbai, for example, the average cost of a one-BHK house goes up to Rs 50 Lakh in many localities. Only rich people can afford the purchase. Commoners have to avail a home loan to fulfill dreams of owning a house.

A home loan or housing loan is a contract between the borrower and the financier/bank, wherein the financier lends to purchase a house, apartment or plot of land. People may also avail home loans to renovate, extend or repair existing houses. Home loans are typically repaid over a term of 10-30 years. The home loan amount depends on the loan repayment tenure, yearly income and loan requirements. Home loans are secured loans. (House is the collateral).

Want to know more on Home Loan? We at IndianMoney.com will make it easy for you. Just give us a missed call on 022 6181 6111 to explore our unique Free Advisory Service. IndianMoney.com is not a seller of any financial products. We only provide FREE financial advice/education to ensure that you are not misguided while buying any kind of financial products.

How to Select The Best Home Loan in India? What Should I Consider?           

Why should I choose the best home loan? One can choose the best home loan because many banks or financial institutions offer a wide array of home loan options. How to choose the best one? The following are some of the important aspects to be taken into consideration while choosing the best home loan:

Home loan interest rates

Banks

Below Rs 30 L

Rs 30 L - 75 L

Over Rs 75 L

With effect from

Andhra Bank

8.45- 8.5%

8.45- 8.5%

8.45- 8.6%

As of 16th  August 2019

Allahabad Bank

8.55- 9.55%

8.55- 9.55%

8.55- 9.55%

As of 14th  June 2019

Axis Bank

8.9-8.95%

8.9- 9.1%

9.05- 9.15%

As of 18th  July 2019

Bank of India

8.5- 8.55%

8.5- 8.55%

8.5- 8.55%

As of 10th  September 2019

Bank of Maharashtra

8.5- 9%

8.5- 9%

8.5- 9.25%

As of 07th  September 2019

Bank of Baroda

8.4-9.4%

8.4-9.4%

8.4-9.4%

As of 07th September 2019

Central Bank

8.25%

8.25%

8.25%

As of September 2019

Corporation Bank

8.45-9%

8.45-9%

8.45-9%

As of 15th  September 2019

Canara Bank

8.4- 8.5%

8.4- 8.6%

8.55- 8.65%

As of 07th September 2019

Dena Bank

NA

NA

NA

NA

Federal Bank

8.9-8.95%

8.9- 9.05%

9.0-9.1%

As of 16th September 2019

As we can see from the table, different banks have different home loan rates. Compare and analyze these rates so that you can choose the cheapest home loan rates.

Processing fee: Home loan processing fees are a one-time charge levied by a bank while sanctioning home loan. Processing fees are not refundable even though loans may not be approved.

See Also: How to Select the Best Home Loan?

Bank

Processing Fee as a % of loan amount

Minimum and Maximum processing fees*

SBI Home Loan

0.25%

Maximum Rs 10,000

HDFC Home Loan

0.50%

Min Rs 3,000 - Max Rs 10,000

ICICI Bank Home Loan

0.25%

Min Rs 5,000 - Max Rs. 5,000

Loan to value ratio

The loan to value ratio determines the amount of loan you can take. If the market price of the property is Rs 40 Lakh, the maximum loan amount you can get is Rs 32 Lakh if the LTV ratio is set at 80%. LTV on home loan is 80-90%.

See Also: Ways to Reduce Your Home Loan EMIs

Low EMIs

 The lower the home loan EMI, the higher is the interest and vice versa. Decide how much you can pay using the IndianMoney home loan EMI calculator. Check for the home loan repayment flexibility.

 Less paperwork and hassle-free approval

 Home loan seekers must submit the required documents to avail a home loan. Most people expect the documentation to be easy and hassle-free. 

See Also: 3 Major Banks Reduce Home Loan Interest Rates    

Conclusion     

The other aspects that must be considered include the eligibility criteria and repo-rate linked home loans. The eligibility criteria differ from one bank to another. Repo-rate home loans are the home loans wherein the home loan interest rates are linked to the repo rate of the Reserve Bank of India. Considering all these factors, you can choose the best home loan deal.

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