How To Apply For A Home Loan in India- Its Types, Eligibility Criteria & Features
Looking to get a Home Loan in India? Facing a challenge with the process? You’re not alone! Buying property is a dream come true, and a loan helps. But first, know your options – the types of loans available, the eligibility criteria, and the features. This guide covers applying for a Home Loan step by step. It introduces the useful house EMI calculator for monthly payments.
So, dream of owning a home? This article helps you get a Home Loan to make it a reality. Ready to start living your best dream? Let’s go!
Types of Home Loans in India: Everything You Need to Know Before You Apply
Planning to buy property in India? Chances are you’ll need a Home Loan. This article covers different Home Loans, so you can pick them intelligently.
Home Purchase Loans
Home purchase loans are the most standard Home Loans. People use this loan to buy a new apartment or a house. These long-term loans usually get repaid over 5 to 30 years. The amount borrowed can exceed 80% of the property value, depending on the lender.
Home Construction Loans
Want to build a new home on your land? Then, a construction loan is perfect for you. This loan is meant to fund building costs, and the loan amount is often disbursed in instalments.
Plot Loan
Want land to build on down the road? Then, a plot loan is for you. This provides financing for the land, so you can construct a home later.
Home Extension Loan
If you currently own a home and want to add a room or a floor to suit your growing family, a home extension loan can help. This loan is designed exclusively for expanding an existing home.
Home Loan Balance Transfer
Unhappy with your existing Home Loan and lender? You can switch to get a better deal. Move your loan to one that offers lower rates and improved service. Upon transfer, you can even research the possibility of a top-up loan on your existing one.
Eligibility Criteria for Home Loans in India – What You Need to Know
Understanding the eligibility is essential to apply for a Home Loan in India. Banks and financial institutions have particular eligibility requirements to complete before your Home Loan application is approved.
Credit Score
Banks primarily consider your creditworthiness when approving a Home Loan. A solid credit score shows financial stability. Lenders typically want at least a 750 credit score to approve a Home Loan request.Â
Age
Most banks favour applicants between the ages of 21 and 60. The maximum age restriction, however, varies from bank to bank and the kind of loan. For self-employed persons, for example, certain banks may set a maximum age limit of 65 years.
Employment Type
Banks prefer applicants with a consistent income source, whether salaried or self-employed. Therefore, salaried individuals must disclose employment information. Self-employed persons have to provide their business information.
Minimum Annual Salary
The minimum salary requirement varies based on the bank, the kind of loan, and the property’s location. The minimum annual salary might be as low as Rs 2 lakhs per annum in certain situations, and as high as Rs 10 lakhs per annum in others.
CollateralÂ
Home Loans are secured loans, which means the collateral for the loan is the property you’re purchasing. Before authorising the loan, banks will analyse the property’s worth. The property must fulfil the bank’s minimum valuation threshold.
Assets and Liabilities
When you apply for a loan, banks assess your assets, obligations, stability, and continuity of occupation. In addition, they will examine your bank records, tax returns, and other financial papers to determine your financial stability.
Residency Status
Another factor for house loan qualifying is your resident status. Banks provide housing loans to both Indian residents and Non-Resident Indians (NRIs). However, NRIs may be required to fulfil extra conditions, such as having a resident Indian co-applicant.
Features of Home Loans: What You Need to Know Before Applying
- Loan Amount: You can get approved for 80-90% of the property’s market value.
- Loan Term: Home Loan terms are usually up to 30 years but can differ based on the lender.
- Processing Fees: Most lenders charge a processing fee ranging from 0.50% -2% of the loan amount.
- Prepayment Charges: Some lenders may waive or lower prepayment charges if you have a good repayment track record.
- Flexible EMI tenure: With flexible EMIs, you can choose a tenure of up to 25 years, which gives you ample time to pay off your loan.
- Paperless process: With the help of digital processes, you can apply for a Home Loan online and enjoy a 100% paperless process.
Applying for a Home Loan in IndiaÂ
Follow these steps to apply for a Home Loan with your bank online –Â Â
- Go to the Bank’s website for Home Loans. Then, click the ‘Apply Now’ option.
- Fill out the form with your personal and income information, then submit it.
- Using the House Loan EMI calculator, you can estimate your monthly payments and adjust the loan amount and term.
- Upload the necessary documents.
- Wait for loan approval and documentation, and creditworthiness verification.
- Once accepted, sign the loan agreement and submit any extra documentation the lender needs.
- The loan amount will be disbursed once your application is approved.
How to use a House EMI Calculator when Applying for a Home Loan?
A House Loan EMI calculator can give you a general idea of your monthly payments. Enter the loan amount, interest rates, and term; the calculator will do the rest. It can assist you in budgeting your funds and selecting a loan amount that you want. Most lenders provide their own loan EMI calculators, which can also be found online. So, before applying for a Home Loan, use an EMI calculator to help you make an informed decision.
In conclusion, taking out a Home Loan to buy your dream home can be a significant move. But, with so many different loans and lenders, determining which one is best is difficult. To simplify the process, you may use a Home Loan EMI calculator to see how much you’ll need to pay each month. Ensure you have all the required documentation and fulfil the qualifying requirements. You’ll be on your way to buying your ideal house with some careful planning!
