Because of India’s escalating real estate prices, most people can only afford to buy a home with the help of a Home Loan. A lot of Government and commercial banks, as well as non-banking financial companies, have come up with the idea of creating different home loan programs to cater to the needs of different parts of society. You must first comprehend each of the available options to determine which one is appropriate for you depending on your requirements. Read below to check the detailed information related to Types of Home Loans in India like Various Types of Home Loans in India, Eligibility Criteria, Required Documents, Interest rates, and much more.
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Types of Home Loans in India – Comprehensive Details
In India, buying a house has become a standard for settling down. The purchase of a home is a dream shared by millions of people across the country. Everyone wants to have a decent home where they can relax at the end of the day. However, the ever-increasing cost of real estate has boosted the demand for home loans in the country. A home loan is a convenient option to finance your purchase. Different forms of home loans are available these days from banks and other housing finance institutions.
Various Types of Home Loans in India
Individuals can choose a house loan based on their needs and budget. The following is a list of some of the most popular Home Loan options available in India:
Home Purchase Loans
This loan is used to purchase a residential property, such as flats, row houses, or bungalows. . Typically, financial institutions will lend up to 80-85 percent of the house’s current market value. These loans have a fixed, adjustable, or hybrid interest rate.
Eligibility Criteria for Home Purchase Loans
The applicants applying for Home Purchase Loans must fulfill the following eligibility criteria:
| Particulars | Self-Employed Individuals | Salaried Professionals |
| Age Limit | 18 to 65 years | 18 to 65 years |
| Employment | Minimum 5 years of experience | Minimum 2 years of experience |
| Credit Score | 750 or above | 750 or above |
Required Documents for Home Purchase Loans
While filling up the application form for Home Purchase Loans, some important documents will be needed by the applicants, make sure to keep them handy. The documents required for Home Purchase Loans are as follows:
- Identification Proof like PAN card, Passport, Voter ID, etc.
- Age Proof-like Birth certificate, Class 10 marks sheet, etc.
- Address Proof like Voter ID, Copy of passport, utility bills, etc.
- Documents of Property to be Purchased
- Income Proof-like Salary slips and ITR details
- Existing Loan Documents if any
Interest Rates on Home Purchase Loans
The following are the interest rates on house purchase loans given by major banks:
| Banks | Interest Rate | Processing Fee (exclusive of GST) |
| ICICI 30 Year Home Loan | 6.70% onwards | 0.50% – 2.00% of the loan amount or Rs. 1,500 (Rs. 2,000 for Delhi, Mumbai, & Bangalore), whichever is higher |
| SBI Home Loan | 6.70% onwards | Up to 0.4% of the loan amount(Minimum of Rs 10,000 and Maximum of Rs. 30,000) |
| Axis Home Loan | 6.90% onwards | Up to 1% of the loan amount (Minimum Rs. 10,000) |
| HDFC Home Loan | 6.95% onwards | Salaried/Self Employed Professional – Up to 0.5% of the loan amount or Rs. 3,000, whichever is higherSelf Employed Non-Professional – Up to 1.5% of the loan amount or Rs. 4,500, whichever is higher |
Land Purchase Loans
This sort of house loan can be used to buy land or a parcel of land for building or investment purposes. Land purchase loans are available from several banks. Buying land is a versatile alternative, the buyer can save money and build a house as soon as his resources allow, or simply keep the land as an investment. Lenders such as Axis Bank are willing to lend up to 85% of the land’s worth.
Eligibility Criteria for Land Purchase Loans
The applicants applying for Land Purchase Loans must fulfill the following eligibility criteria:
| Age | 18 to 65 years |
| Employment | Salaried, Self-employed Professionals and Non-Professionals |
Required Documents for Land Purchase Loans
While filling up the application form for Land Purchase Loans some important documents will be needed by the applicants, make sure to keep them handy. The documents required for Land Purchase Loans are as follows:
- Age Proof-like Birth certificate, Class 10 marks sheet, etc.
- Existing Loan Documents if any
- Address Proof like Copy of Utility bills, passport, Voter ID, etc.
- Income Proof-like Salary slips and ITR details
- Property-related Documents
Interest Rates on Land Purchase Loans
The interest rates on Land Purchase Loans offered by major banks are listed below.
| Banks | Interest Rate | Processing Fee (exclusive of GST) |
| HDFC Bank | 7.05% onwards | Salaried/Self Employed Professional – Up to 0.5% of the loan amount or Rs. 3,000, whichever is higherSelf Employed Non-Professional – Up to 1.5% of the loan amount or Rs. 4,500, whichever is higher |
| PNB Housing Finance Ltd. | 7.55% onwards | Up to 1% of the loan amount Minimum Rs. 10,000 |
| Bajaj Finserv | 6.95% onwards | For salaried individuals: Up to 0.80% of the loan amountFor self-employed individuals: Up to 1.20% of the loan amount |
| DHFL | 8.75% onwards | Salaried/Self Employed Professional – 0.5% of the loan amount, Minimum Rs. 2,500Self Employed Non-Professional – Net PAT: 0.5%, Others: 1.0% of the loan amount |
Construction Loans for Homes
This financing is designed specifically for persons who would rather build their own home than buy one that has already been built. This form of loan has a separate approval process because it considers the plot cost as well. When applying for a house building loan, the most crucial requirement is that the plot must have been purchased within a year for the plot cost to be included in the loan amount. The size of a home construction loan is usually determined by the estimated construction cost. The funds may be disbursed completely at once or in installments.
Eligibility Criteria for Construction Loans for Homes
The applicants applying for Construction Loans for Homes must fulfill the following eligibility criteria:
| Particulars | Salaried Professionals | Self-Employed Individuals |
| Age limit | 18 to 65 years | 18 to 65 years |
| Employment | Minimum 1 year of experience with current employer | Available for professionals and non-professionals |
| Credit Score | 700 or above | 700 or above |
Required Documents for Construction Loans for Homes
While filling up the application form for Construction Loans for Homes, some important documents will be needed by the applicants, make sure to keep them handy. The documents required for Construction Loans for Homes are as follows:
- Identification Proof like PAN card, Passport, Voter ID, etc.
- Address Proof like Voter ID, Copy of passport, utility bills, etc.
- Age Proof-like Birth certificate, Class 10 marks sheet, etc.
- Property Documents
- Income Proof-like Salary slips and ITR details
- Existing Loan Documents if any
Interest Rates on Home Construction Loans
The interest rates on house construction loans offered by major banks are listed below.
| Banks | Interest Rate | Processing Fee (exclusive of GST) |
| HDFC Home Loan | 6.95% onwards | Salaried/Self Employed Professional – Up to 0.5% of the loan amount or Rs. 3,000, whichever is higherSelf Employed Non-Professional – Up to 1.5% of the loan amount or Rs. 4,500, whichever is higher |
| SBI Realty Home Loan | 7.50% onwards | 0.40% of the loan amount (Min. of Rs. 10,000; Max. of Rs. 30,000) |
| DHFL Home Construction Loan | 8.75% onwards | Salaried/Self Employed Professional – 0.5% of the loan amount (Min. Rs. 2,500)Self Employed Non-Professional – Net PAT: 0.5%, Others: 1.0% of the loan amount |
| Canara Site Loan | 6.90% onwards | 0.5% of the loan amount. (Min. Rs. 1,500; Max. of Rs. 10,000) |
Home Extension Loans
When a person wants to expand or add extra space to their home, they take out this form of a loan. For example, a room can be added to meet the needs of an expanding family.
Eligibility Criteria for Home Extension Loans
The applicants applying for Home Extension Loans must fulfill the following eligibility criteria:
| Age | 18 to 65 years |
| Employment | Salaried, Self-employed Professionals and Non-Professionals |
Required Documents for Home Extension Loans
While filling up the application form for Home Extension Loans some important documents will be needed by the applicants, make sure to keep them handy. The documents required for Home Extension Loans are as follows:
- Age Proof-like Birth certificate, Class 10 marks sheet, etc.
- Existing Loan Documents if any
- Address Proof like Copy of Utility bills, passport, Voter ID, etc.
- Income Proof-like Salary slips and ITR details
- Property/Home extension-related Documents
Interest Rates on Home Extension Loans
The interest rates on Home Extension Loans offered by major banks are listed below.
| Banks | Interest Rate | Processing Fee (exclusive of GST) |
| Tata Capital Home Extension Loan | 6.90% onwards | Up to 0.5% of the loan amount |
| HDFC Home Extension Loan | 6.95% onwards | Salaried/Self Employed Professional – Up to 0.5% of the loan amount or Rs. 3,000, whichever is higherSelf Employed Non-Professional – Up to 1.5% of the loan amount or Rs. 4,500, whichever is higher |
| DHFL Home Extension Loan | 8.75% onwards | Salaried/Self Employed Professional – 0.5% of loan amount Minimum Rs. 2,500Self Employed Non-Professional – Net PAT: 0.5%, Others: 1.0% of the loan amount |
Home Improvement Loans
You can use this form of home loan to renovate, repair, or re-furnish your property like External and internal repairs, painting, the creation of an above-water tank, and electrical renovations. If you don’t have the funds to repair and renovate your property, banks such as Union Bank of India and Vijaya Bank offer special home improvement loans. Because of the cheap interest rate, home improvement loans are quite popular.
Eligibility Criteria for Home Improvement Loans
The applicants applying for Home Improvement Loans must fulfill the following eligibility criteria:
| Age | 18 to 65 years |
| Employment | Salaried, Self-employed Professionals and Non-Professionals |
Required Documents for Home Improvement Loans
While filling up the application form for Home Improvement Loans, some important documents will be needed by the applicants, make sure to keep them handy. The documents required for Home Improvement Loans are as follows:
- Age Proof-like Birth certificate, Class 10 marks sheet, etc.
- Estimated Renovation Quotation
- Address Proof like Copy of Utility bills, passport, Voter ID, etc.
- Income Proof-like Salary slips and ITR details
- Original Property Title Deeds
Interest Rates on Home Improvement Loans
The interest rates on Home Improvement loans offered by major banks are listed below.
| Banks | Interest Rate | Processing Fee (exclusive of GST) |
| Bank of Baroda | 6.75% onwards | 0.25% to 0.50% of the loan amount |
| Canara Bank | 6.90% onwards | 0.5% of the loan amount. (Minimum Rs. 1,500; Maximum of Rs. 10,000) |
| HDFC Bank | 6.95% onwards | Salaried/Self Employed Professional – Up to 0.5% of the loan amount or Rs. 3,000, whichever is higherSelf Employed Non-Professional – Up to 1.5% of the loan amount or Rs. 4,500, whichever is higher |
| PNB Housing Finance Ltd. | 9.25% onwards | Up to 0.35% of the loan amount (Minimum Rs. 2,500; Maximum Rs. 15,000) |
Balance Transfer Home Loans
This option is available if a person wishes to transfer his or her house loan from one bank/NBFC to another provider/lender for reasons such as lower interest rates or better services provided by the other bank. This is done to repay the remaining loan at the other lender’s updated, lower interest rates. The availability of a top-up facility and a lower interest rate from the new lender are the main reasons for taking out this loan.
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Eligibility Criteria for Balance Transfer Home Loans
The applicants applying for Balance Transfer Home Loans must fulfill the following eligibility criteria:
| Age | 18 to 65 years |
| Employment | Individuals who are self-employed or salaried and have a good track record of making timely payments to their previous lender. |
Required Documents for Balance Transfer Home Loans
While filling up the application form for Balance Transfer Home Loans some important documents will be needed by the applicants, make sure to keep them handy. The documents required for Balance Transfer Home Loans are as follows:
- Age Proof-like Birth certificate, Class 10 marks sheet, etc.
- Address Proof like Copy of Utility bills, passport, Voter ID, etc.
- Income Proof-like Salary slips and ITR details
- Property-related Documents
- Bank statement showing repayment of ongoing loan
- Loan statement and list of property documents in possession of the existing lender
Interest Rates on Balance Transfer Home Loans
The interest rates on Balance Transfer Home Loans offered by major banks are listed below.
| Banks | Interest Rate | Processing Fee (exclusive of GST) |
| SBI Home Loan Balance Transfer | 6.70% onwards | 0.40% of the loan amount (Min. of Rs. 10,000 & Max. of Rs. 30,000) |
| Bajaj Finserv Balance Transfer | 6.95% onwards | For salaried individuals: Up to 0.80% of the loan amountFor self-employed individuals: Up to 1.20% of the loan amount |
| HDFC Home Loan Balance Transfer | 6.95% onwards | Salaried/Self Employed Professional – Up to 0.5% of the loan amount or Rs. 3,000, whichever is higherSelf Employed Non-Professional – Up to 1.5% of the loan amount or Rs. 4,500, whichever is higher |
| ICICI Home Loan Balance Transfer | 6.70% onwards | 0.50% – 2.00% of the loan amount or Rs. 1,500 (Rs. 2,000 for Mumbai, Delhi & Bangalore), whichever is higher |
Bridge Loans
This form of house loan is used by those who want to buy a new home after selling their current one. The fund assists with short-term funding needs, such as a down payment on a new home, while the old property is not sold. Bridge loans often have higher interest rates and a maximum repayment term of up to two years. Bridged loans are available from several banks, including Vijaya Bank and HDFC Bank.
Eligibility Criteria for Bridge Loans
The applicants applying for Bridge Loans must fulfill the following eligibility criteria:
| Age | 18 to 70 years |
| Eligible customers | All property owners and co-applicants |
Required Documents for Bridge Loans
While filling up the application form for Bridge Loans some important documents will be needed by the applicants, make sure to keep them handy. The documents required for Bridge Loans are as follows:
- Age Proof-like Birth certificate, Class 10 marks sheet, etc.
- Address Proof like Copy of Utility bills, passport, Voter ID, etc.
- Income Proof-like Salary slips and ITR details
- Property-related Documents
- Bank statement showing repayment of ongoing loan
Interest Rates on Bridge Loans
The interest rates on Bridge Loans offered by major banks are listed below.
| Banks | Interest Rate | Processing Fee (exclusive of GST) |
| SBI Bridge Loan | 1st year: 9.50% 2nd year: 10.50% | Up to 0.35% of the loan amount (Min. Rs. 5,000) |
Home Loans for NRIs
The formalities and application procedure for this type of loan are different from the others because it is specifically designed to assist non-resident Indians in purchasing a residential property in India. NRI loans are generally available through most commercial and public sector banks as part of their home loan portfolio.
| Banks | Interest Rate | Processing Fee (exclusive of GST) |
| PNB Housing Finance Ltd. | 7.55% onwards | Up to 1% of the loan amount (Max. Rs. 10,000) |