A home loan is taken from financial institutions (such as insurance companies, investment
banks, commercial banks and brokerage firm) for the purpose of buying a desired property. Home loan can be re-paid by EMIs (Equated monthly installments).
6.5% to 12.00% is the average home loan interest rates in India. The ratestypically vary from lenders to lenders, economic activities and many other factors.
The special prerogative is given to women, bank staff and senior citizens by banks by providing a 0.05% concession.
Home loans are of various types such as:
The person taking the home loan has to consider various factors such as:
In order to qualify for a home loan every borrower need to meet the eligibility criteria. If a person fails to meet the criteria the loan application of that particular person will be rejected.
Eligibility for a home loan is as follows:
Age |
18-70 years |
Income |
?25,000 |
Credit score |
Above 750 |
Employment status |
Employed or self employed |
Loan Amount |
Decided by lender |
Residential status |
Permanent resident or Non-ResidentIndian (NRI) |
LTV Ratio |
Upto 90% |
Agriculturists |
Salaried person |
Businessman |
Application for with photograph |
Application form with photograph |
Application form with photograph |
Identity and residential status proof |
Identity and residential status proof |
Identity and residential status proof |
Bank statement of last 6 months |
Bank statement of last 6 months |
Bank statement of last 6 months |
Documents copies portraying land holding |
Latest salary slip |
Educational qualification certificate and proof of business |
Processing fee cheque |
Processing fee cheque |
Processing fee cheque |
Document copies depicting crop being cultivated |
Form 16 |
Previous 3-year income tax returns And Balance sheet of previous 3 year |
Applying for a home loan now is not a difficult task with the advent of technology. Person can either go to bank directly or he can apply online application.
1. Fill the application form and attach the necessary documents: - In applications form a person need to provide the lender with the basic detail which are as following:
Documents Required
2. Documents Verification: -After the submission of application form and documents lender will verify the documents. He will also check you CIBIL score. Upon applying banks checks the documents, CIBIL score.
A CIBIL score is a consumer’s credit score. It is a three-digit number ranging between 300 to 900. A good CIBIL score ranges between 700-900. If a person visits the financial institutions for loan and there CIBIL score is fewer financial institutions may not grant him loan. It acts as a first impression for lenders the higher the score is, better are your chances of getting the loan approved. CIBIL score can be improved by paying the credit card bills on time, by not missing any EMIs.
Sanction letter also contain terms and conditions and policies which you have to sign and send it to the lender.
Processing Of Technical Papers:- A lender will send the team last time for verifying the property so that you could not be distributed later.
Loan Agreement:- After lender has performed all their checks you will receive the final agreement.
In order to improve your chances of qualifying for a home loan: -