How to apply for Home Loan?

apply for Home loan
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What is the need for Home Loan?

Owning a House is a life time goal of many middle class people. It involves huge amount of money in constructing or buying a house. Hence, it is not possible for middle class people to buy or construct a home using their own money. In order to cater needs of such people, many Banks and Housing Finance companies are giving housing loan at a lower rate of interest for the purpose of buying or constructing a house.

What are the different purposes of home loan?

You can get home loan for the purpose of

  • Constructing an Individual House
  • Buying a ready built house
  • Purchase of plot and construction thereon
  • Additional Floor construction
  • Renovating an existing house
  • Take over of loan from other institution

What are the eligibilities to apply for home loan?

An Indian citizen who attains age of 18 years & above and who gets standard income through salary or business can apply housing loan in all banks and NBFCs. In addition to that, you should also have minimum CIBIL score prescribed by each lending institution. You can also add Co-applicant in your housing loan to get maximum loan amount. The co-applicant can be your spouse or close family members who is also an earning person in family.

Purpose of Home loan

How Interest rate is fixed for home loan?

Rate of Interest of Home loan (Housing Lon) is very low when compared to other type of loans such as Mortgage loan, Personal Loan, Business loan etc. It is because of the housing loan is being a priority sector lending, all banks and Housing Finance Companies are required to give home loan at lowest interest rate.

CIBIL score of an applicant plays a vital role in fixing rate of interest in home loan. That is, the applicant who have highest Cibil score gets lowest interest rate. And also, some the banks and lending institutions give interest concession for Woman applicant and salary class applicant.

Compare All banks Home Loan Interest rate here

What are the documents required for home loan?

We have compiled the following list of common home loan documents that your lender might request at the time of home loan application.

Address Proof:

  • Aadhar Card
  • Voter ID Card
  • Ration Card
  • Passport
  • Latest utility bills (Telephone Bill, Electricity Bill, Water Bill, Gas Bill)
  • Letter from a recognized public authority for verifying the customer’s address

Identity Proof:

  • Aadhar Card
  • PAN Card
  • Passport
  • Voters ID Card
  • Driving License

Income Proof for Salaried people

  • Last 3 months payslip
  • Latest Form 16
  • Last 3 years IT returns
  • One year Bank statement

Income proof for self-employed people

  • Last 2 years IT returns
  • Balance Sheet and Profit & Loss Account Statement of the Company/Firm
  • One Year Bank Statement
  • The license of Professional Practice (For Doctors, Consultants, etc.)
  • Business License Details

Property Documents

  • DTPC approval or Natham Proof for land
  • Building plan approval from respective authority
  • NOC from Society/Builder
  • A detailed estimate of the cost of construction of the house
  • Registered Sale Deed, Allotment Letter or Stamped Agreement of Sale with the Builder
  • Occupancy Certificate (in case of ready-to-move-in properties)
  • Property Tax Receipts, Water Tax Receipt, Maintenance Bills and Electricity Bills
  • Receipts of the advance payments made to the Builder or Seller
  • Original of the land tax paid receipt and possession certificate as issued by the revenue authority

Note: All your documents relating to your housing property will be held by lending institutions until the repayments are fully paid.

How to calculate Home Loan EMI?

Our EMI Calculator helps you to calculate your Equated Monthly Installment (EMI) for your Home loan effectively.

What are the Tax Benefits on Home loan?

There are certain tax benefits you can avail on the equated monthly instalments (EMIs) you pay for your home loan. Accordingly, you can claim following tax benefits at the time of Income Tax filing. Usually, the EMI you intent to pay have two components: Principal and Interest

  • Generally, the principal portion of the EMI paid for the year can be claimed as a deduction under Section 80C of the Income Tax Act, 1961. However, the maximum amount that can be claimed is up to Rs 1.5 lakh
  • Apart from principal amount, the interest portion of the EMI paid for the year can also be claimed as a deduction from your total income up to a maximum of Rs 2 lakh under Section 24

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