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Loan amount: Up to Rs.1 crore
  • Rate of Interest: 22% per annum

  • Processing Fee: 1.2%

  • Tenure: 6/12/18/24/30/36 months

A growing number of banks and scores of Housing Finance Companies (HFCs) offer home loans to finance the purchase of home properties. Based on your credit score, income, loan amount, LTV ratio, job profile and employer’s profile, the home loan interest rate will start from 6.40% p.a. for tenures of up to 30 years based on the applicant’s credit score alone. The home loan amount can go up to 75% or 90% of the home property’s value depending on credit profile, LTV ratios, and other factors.

Kinds of home loans

  • Home Purchase Loan: The most common type of home loan availed is a home loan for buying ready-to-move-in properties, under construction properties, and pre-owned homes/resale properties. RBI guidelines state that lenders can offer a loan-to-value (LTV) ratio of up to 75-90% of the property value.
  • Home Construction Loan: With this type of home loan, you can only get the money if you own a plot of land and plan to construct a house on it.
  • Composite Loan: In order to get a home loan, you will need to first purchase a plot of land. This type of mortgage is perfect for individuals who want to invest or build their house. The first disbursement will be made towards the purchase of the plot, which means that it won't matter how much money you put down as long as you have enough saved up.
  • Home Renovation/Improvement Loan: This can be used to finance home repairs and renovation expenses of the existing house. The interest rate for this loan is the same as that for a regular home loan, but its tenure is shorter.
  • Bridge Loan: A short-term home loan can be suitable for individuals who wish to purchase a new house with the sale proceeds of the existing home. The loan helps you cover the gap between buying a new house and selling an existing one.
  • Interest Saver Loan: In order to take out a loan, borrowers need to have their bank account linked with their home loan. If you deposited an amount over and above the EMI amount, your prepayment towards the loan will be used in a different way - it will be saved on the interest rate.
  • 7 Step Up Loan: Another type of home loan is where borrowers pay lower interest rates during the initial years, but after that they receive an increasing EMI.This makes the overall loan affordability for young professionals who have just started their career!

Fees and other charges regarded loan

  • Application fee: To cover all the preliminary expenses that lenders incur for conducting the verification, application fees are charged.
  • Processing Fee: It covers the cost of credit appraisal, which is dependent on a borrowers’ credit profile, income, and the home loan scheme. Processing fees are not always levied by all lenders.
  • Administrative fee: The administrative fee levied by lenders is split into two parts- the part charged after the loan sanction, and the part which is known as the administration fee.
  • Repayment Mode Related Charges: When a borrower requests their lenders to change their existing repayment mode during the loan tenure, there is usually a fee associated with it. This fee can range from Rs. 500 to Rs. 1,000 per instance (swap).
  • CERSAI charges: The CERSAI website is a central online security interest registry in India that allows potential lenders to check whether the pledged property is not claimed by some other lender.
  • Legal fee: When a lender engages a firm to scrutinize borrowers’ legal documents, they may charge a legal fee as part of the processing fee.


Lenders prefer to sanction housing loans for applicants who have credit scores of 750 or above as this indicates that the applicant has exhibited responsible credit behaviour and is at risk for reducing their lending risk. Low-interest rates are usually offered to applicants with high credit scores because it helps lenders assess the riskiness of the borrower.

A co-signer is someone who signs a loan on behalf of another person.

Second house loan can be availed if the lender is satisfied with your repayment capacity, credit profile and the characteristics of the pledged property.

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