What a home loan actually is
A home loan is a secured loan facility which banks and Housing Finance Companies (HFCs) offer for purchasing, constructing, renovating, repairing and extending a residential property. The loan is backed by the underlying property until repayment is complete. If the borrower defaults, the lender has the legal right to take possession of the property and auction it to recover the unpaid amount.
Banks and HFCs offer home loans of up to 75% to 90% of the property’s value depending on the credit profile of the applicant, subject to the caps on Loan-to-Value ratios set by the lender and the RBI. Tenures can run up to 30 years, with a few lenders extending to 40.
Where we come in. Our team is made up of ex-government bankers. We compare what the public sector banks will offer on your specific profile, build the file the way the credit department expects to receive it, and follow it through to disbursement.
Home loan at a glance
- Interest Rate
- Starting from 8.35% p.a.
- Loan Amount
- Varies on a case-to-case basis
- LTV Ratio
- Up to 90% of the property value
- Tenure
- Up to 30 years, with some lenders extending to 40 years
- Processing Fees
- 1% to 2% of the loan amount (varies across lenders)
- Security
- The financed property itself, held until the loan is repaid
Rates offered by leading banks & HFCs
Rates move with the repo rate and each lender’s cost of funds. The table below is a reference point for comparison, not a quote — your actual rate depends on your credit score, income profile and the property itself.
| Lender | Interest Rate (p.a.) |
|---|---|
| State Bank of India | 8.50% – 9.85% |
| Bank of Maharashtra | 8.35% – 11.15% |
| Union Bank of India | 8.35% – 10.90% |
| Bank of Baroda | 8.40% – 10.90% |
| Punjab National Bank | 8.40% – 10.25% |
| Canara Bank | 8.40% – 11.25% |
| Bank of India | 8.40% – 10.85% |
| Indian Overseas Bank | 8.40% onwards |
| UCO Bank | 8.45% – 10.30% |
| Punjab & Sind Bank | 8.50% – 10.00% |
| HDFC Bank | 8.70% onwards |
| ICICI Bank | 8.75% onwards |
| Axis Bank | 8.75% – 13.30% |
| Kotak Mahindra Bank | 8.70% onwards |
| LIC Housing Finance | 8.50% – 10.75% |
| PNB Housing Finance | 8.50% – 14.50% |
| Federal Bank | 8.80% onwards |
| IDFC First Bank | 8.85% onwards |
| Tata Capital Housing Finance | 8.75% onwards |
| Godrej Housing Finance | 8.55% onwards |
Swipe the table sideways to see all columns.
Rates change. These figures were published in July 2024 and are indicative only. Call us for the rate a specific bank is quoting today on a profile like yours.
The eight types of home loan
“Home loan” is a family of products, not one product. Choosing the wrong one is a common and expensive mistake.
- Home Purchase Loan — for ready-to-move-in, under-construction and pre-owned or resale properties.
- Composite Loan — for buying a plot and building on it. The first disbursement goes towards the plot; later payments follow the stages of construction.
- Home Construction Loan — for constructing a house, disbursed against construction stages.
- Home Renovation / Improvement Loan — for renovation costs on an existing house, usually at the same rate as a regular home loan.
- Home Extension Loan — to add space to an existing house. Lenders typically fund 75% to 90% of the construction estimate.
- Bridge Loan — a short-term loan for buying a new house against the sale proceeds of your existing one.
- Interest Saver Loan — an overdraft-linked home loan. Anything deposited above the EMI counts as prepayment, cutting interest.
- Step Up Loan — lower EMIs in the early years rising over time, aimed at professionals early in their career.
Eligibility criteria
Eligibility differs across lenders and schemes, but a common set of parameters applies almost everywhere:
- Nationality
- Indian residents, Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs)
- Credit Score
- Preferably 750 and above
- Minimum Age
- 18 years, with some lenders setting 21 years
- Maximum Age
- Usually 70 years at loan maturity; some lenders extend to 75
- Work Experience
- At least 2 years, for salaried applicants
- Business Continuity
- At least 3 years, for self-employed applicants
- Minimum Salary
- At least ₹25,000 per month, varying by lender and location
- Loan Amount
- Up to 90% of the property value
The property matters as much as you do. Beyond the parameters above, your eligibility depends on the property being purchased and its location. A clean title and an approved building plan carry real weight in the credit decision.
Documents you will need
Lenders ask for documents to establish identity, residence, income and repayment capacity. The exact list varies with your credit profile, the property type and the loan type.
Identity Proof
- PAN Card
- Passport
- Aadhaar Card
- Voter’s ID Card
- Driving Licence
Age Proof
- Aadhaar or PAN Card
- Passport
- Birth Certificate
- Class 10 mark sheet
- Bank passbook
Address Proof
- Bank passbook
- Voter’s ID or Ration Card
- Passport
- Utility bills — telephone, electricity, water, gas
- LIC policy receipt
Property Documents
- NOC from society or builder
- Detailed construction cost estimate
- Registered sale deed
- Allotment letter
- Approved copy of the building plan
Income proof
| For salaried applicants | For self-employed applicants |
|---|---|
| Copy of Form 16 | Business licence details |
| Latest payslips | Proof of business address |
| ITR of the past 3 years | ITR of the last 3 years |
| Investment proofs, if any | Balance sheet and P&L statement of the company or firm |
Additional documents for NRI applicants
- Proof of identity — passport with visa stamps, or PIO card.
- Proof of address — a government document showing the current overseas address.
- Income proof — salary certificate or latest payslips in English; for the self-employed, latest ITR, overseas bank statements and audited or CA-certified balance sheets.
- Employment evidence — work permit, employment contract, appointment or offer letter, duly attested where it is in another language.
- Merchant navy applicants — a copy of the Continuous Discharge Certificate (CDC).
- Property papers — original title deeds, encumbrance certificate, approved drawings, payment receipts, ULC clearance and the latest tax paid receipt.
This list is indicative. Your lender may ask for more. If you have an existing loan with another bank, keep the last 12 months of that loan account statement ready.
Tax benefits on a home loan
Home loan borrowers can claim deductions under several sections of the Income Tax Act. Over a long tenure these add up to a substantial saving every year.
| Section | Nature of deduction | Maximum deductible |
|---|---|---|
| Section 24(b) | Interest paid | ₹2 lakh |
| Section 80C | Principal, including stamp duty and registration fee | ₹1.5 lakh |
Do’s and don’ts before you apply
| Do | Don’t |
|---|---|
| Keep your credit score at 750 or above | Apply without checking your credit score first |
| Limit total EMI obligations to 50–60% of net monthly income | Use your emergency fund to make a larger down payment |
| Compare offers from several lenders | Apply to multiple lenders within a short span |
| Make a larger down payment to reduce the LTV ratio | Forgo existing investments to fund the down payment |
| Add a co-applicant to raise eligibility | Plan EMIs without accounting for your other financial goals |
If your application was rejected
A rejection is rarely final. It usually points at something specific and fixable — and this is the situation we handle most often.
- Build and maintain your credit score at 750 or above.
- Check your credit report for inaccuracies and get them corrected.
- Add an earning family member as a co-applicant.
- Contribute more towards the down payment, lowering the LTV the bank has to fund.
- Compare offers across banks and HFCs before committing to a lender.
- Avoid making multiple loan applications in a short span — each one leaves a mark.
- Keep total EMI obligations, including the proposed EMI, within 55–60% of net income.
How we handle your file
Profile review
We look at income, credit history, banking conduct and the property before naming a bank. If the case cannot be placed, you hear that on the first call.
Lender matching
Different banks price and assess the same profile very differently. We shortlist the ones whose credit policy actually fits your case.
File preparation
Documentation is assembled and presented the way a credit department expects it, which is where most self-filed applications come apart.
Sanction and disbursement
We follow the file through legal and technical verification to sanction, then through disbursement — including stage-wise release on construction cases.