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About Aadhar Housing Finance

Aadhar Housing Finance Limited, previously known as DHFL Vysya Housing Finance Ltd, is an affordable housing loan service provider having a pan India presence. The highlight of Aadhar Housing Finance is that it caters to the informal sector that does not have proper access to banks and HFCs. It is because this section of people is unable to provide documentary evidence of their income generation.

Aadhar Housing Finance Limited, established in 2010, merged with DHFL Vysya on November 20, 2017. This merger enhanced the company?s reach and made it accessible to almost all sections of society across India. The Company has more than 300 branches today, as it serves a client base of more than 133,000.

Aadhar Housing Finance Home Loan

Aadhar Housing Finance provides various Home Loan options for its clients from all walks of life. This Company has loan products for both the salaried employee and self-employed persons with income levels as low as 5,000 per month. The skilled artisans and professionals who do not have IT return to prove their income generation benefit the most from Aadhar Housing Finance Home Loans. The Company employs innovative methods to gauge their income levels. Hence, Aadhar Housing Finance is a preferred financing option for such customers.

Aadhar Housing Finance Home Loan - Features and Benefits

Target group

  • Salaried employees with a monthly salary starting from as low as 5,000.
  • Self-employed individuals without proper income documents are also eligible for a Home Loan.

Purpose

  • Purchase of a new house or apartment
  • Buy a second-hand house/flat
  • Construct your own home
  • Purchase plot and construct house thereon
  • Balance transfer from other banks and financial institutions
  • Loan for purchase of non-residential or commercial property is also available.

Quantum of loan

A maximum amount of 1 Crore

The margin on the Home Loan

20%

Rate of interest

Reasonable rates of interest

Loan tenure

Flexible tenure up to 30 years

Aadhar Housing Finance Home Loan Interest Rates

Aadhar Housing Finance is a non-banking housing finance company. Hence, it does not offer interest structures such as MCLR-linked rates or RLLR-linked structures. Aadhar Housing Finance follows its Retail Prime Lending Rate for deciding the Home Loan interest rate.

Presently, Aadhar Housing Finance offers Home Loan interest rate in the range of 11% to 14.50%.

A Few Points to Note

  • Aadhar Housing Finance offers floating, fixed, and dual/special rates of interest on Home Loans
  • The interest rates on Home Loans are at a discount over the Aadhar Retail Prime Lending Rate
  • All the rates are linked to the Aadhar RPLR. However, the floating rates vary along with any change in the RPLR.
  • The Home Loan agreement includes an interest rate reset clause. This clause ensures that the individual Home Loan interest rate varies from the date of reset.
  • The discount on the RPLR depends on various factors. These factors include the following:
    • The occupation of the borrower
    • The nature of income generation
    • The repayment capacity of the borrower
    • The credit rating
    • The value of security offered
    • The amount of loan

Aadhar Housing Finance Home Loan - Fees & Charges

Type of Charge Amount of Charges

Processing fee

3,500

Administrative charges

1.50% of the loan amount

Subsequent technical verification

500 (only in cases involving construction)

Cheque bouncing charges

500 per instance

Penal interest on default

1.50% of the default amount per month for the default period

Cheque/ECS swapping charges

500

No dues certificate charges

500

Copy of documents

500

Prepayment penalty

  • Floating rate of interest loans - Nil
  • Fixed-rate of interest loans - 2% of the loan outstanding only in case of Balance transfer.
  • Repayment from own source/sale of the property - No prepayment charges.

Document retrieval

2,000

Statement of account

500

Conversion fee

  • Fixed-rate to Floating rate - 1% of the outstanding amount
  • Floating to Fixed - 1.50% of the outstanding amount

Loan cancellation

1,500

Aadhar Housing Finance Home Loan - EMI Calculation

Aadhar Housing Finance Limited offers facilities to calculate your Home Loan eligibility and EMI online.

Loan Eligibility Calculator

  • Access the official website of Aadhar Housing Finance
  • Select Loan Eligibility Calculator
  • Enter the details requires like loan tenure and interest rate
  • Provide details of your income and obligations
  • Similarly, provide these details for your co-applicant, as well
  • Calculate the eligibility before applying for the Home Loan

Loan EMI Calculator

Enter the details like loan amount, interest rate, and loan tenure to calculate the EMI of your Home Loan.

MyMoneyMantra offers similar EMI Calculator.

Aadhar Housing Finance - Apply for a Home Loan

It is possible to apply for a Home Loan online at Aadhar Housing Finance. Select 'I want to Apply' option from the Home Loan webpage of Aadhar Housing Finance. Enter your contact details to enable Aadhar Housing Finance officials to give a callback. Complete the formalities of applying for your Home Loan under the guidance of the relationship manager.

Aadhar Housing Finance - Interest Calculation and Repayment Modes

Like all housing finance companies, Aadhar Housing Finance calculates interest on the monthly reducing balance method. Compared to the daily reducing balance method, this method is an inferior one.

The ideal repayment mode of Home Loan is EMI. The EMI comprises of two constituents.

  • The interest repayment portion
  • The principal repayment component

The interest and principal repayment components are variable throughout the tenure of the Home Loan. In the initial stages of repayment, the interest component is considerably high. As you keep repaying the loan instalments on time, the interest component keeps reducing.

Mode of repayment

  • Submit post-dated cheques for your Home Loan instalment in advance
  • Register for an ECS mandate

Aadhar Housing Finance - PMAY

Aadhar Housing Finance is an active player in PMAY. As it is, Aadhar Housing Finance caters to the informal sector. PMAY loans are similar to regular Home Loans in almost every respect. However, they have specific eligibility criteria. Secondly, there is an element of interest subsidy. Aadhar Housing Finance is controlled by the National Housing Bank in matters concerning subsidy claims.

Eligibility Criteria - Income Levels

  • Economically Weaker Section (EWS) ? Families having an annual income from all sources up to 3 Lakhs comprise this category of borrowers.
  • Low-Income Group (LIG) ? The upper limit of income for this category of borrowers is 6 Lakhs.
  • Middle-Income Group-I (MIG-I) - This category comprises of borrowers earning income up to 12 Lakhs.
  • Middle-Income Group-II (MIG-II) - This creamy layer constitutes borrowers having an annual income from all sources up to 18 Lakhs.

PMAY Subsidy

All PMAY borrowers are eligible for interest subsidy depending on the category they belong to.

Category of Borrower EWS/LIG MIG-I MIG-II

Loan amount permissible for calculating the subsidy

6 Lakhs

9 Lakhs

12 Lakhs

Rate of allowance

6.50%

4.00%

3.00%

The maximum amount of grant

2.67 Lakhs

2.35 Lakhs

2.30 Lakhs

Aadhar Housing Finance Home Loan Interest Rates - FAQs

What are the different modes of interest rate calculation available at Aadhar Housing Finance?

Aadhar Housing Finance offers the following different types of interest calculations:

  • The Floating Rate of Interest: This rate is linked to the Aadhar Housing Finance RPLR. The offered rate is at a discount on the RPLR. The rate varies whenever there is a change in the RPLR.
  • The Fixed Rate of Interest: The rate of interest remains fixed throughout the tenure of the Home Loan.
  • The Dual/Special Rates of Interest: In this combination, the interest rates remain fixed for a specific predetermined period. It switches over to a floating rate of interest after the expiry of the fixed period.

What are the advantages of the floating rates of interest on Home Loans?

The floating rates of interest bring the following benefits to the borrower:

  • The rates of interest vary according to the RPLR. If the reference rate goes down, the effective rate of interest on the Home Loan goes down, as well.
  • The floating rates of interest are the most attractive of all three modes of interest
  • There is no foreclosure penalty on the Home Loans having a floating rate of interest

How is the fixed rate of interest beneficial to the borrower?

The fixed rate of interest offers the following benefits:

  • The rate of interest remains the same for the entire repayment tenure of the loan
  • The tenure does not change, and neither does the EMI
  • This mode of interest calculation does not affect your budget because it enables you to determine your liability.

In what way is the special/dual rate advantageous to the borrower?

The special/dual rate of interest gains significance during times when the borrower is unsure of the movements of the market rates.

  • This rate offers the benefits of both fixed rated and floating rates of interest
  • There is no foreclosure penalty if the borrower closes the loan during the floating rate tenure

What are the drawbacks of all the three rates described above?

Drawbacks of the floating rate of interest:

  • The rates keep changing frequently. Hence, the EMI or the loan tenure can vary continuously. It can throw your budget off gear.

Drawbacks of a fixed rate of interest:

  • The fixed rates of interest are higher than the floating rates of interest
  • You end up paying more over the entire loan tenure

Drawbacks of special/dual rate of interest:

  • The rate of interest is fixed for a specific period. If the floating rates remain below the fixed rates during this tenure, the borrower ends up with higher liability.

How does the rate of interest on the personal Home Loan change with a variation in the RPLR?

The Home Loan comes with an interest reset clause. This reset clause is at fixed, predetermined intervals. It implies that the rate of interest on the individual Home Loan does not change unless the rate is reset. Therefore, every change in the RPLR does not affect the interest rate on the Home Loan. On the reset date, the individual Home Loan rate increases if the RPLR increases and vice versa.

How does the change in the rate of interest affect the Home Loan repayment?

Generally, any change in the rate of interest should either vary the EMI or the loan repayment tenure. Aadhar Housing Finance prefers to maintain the EMI constant while modifying the loan tenure. However, Aadhar Housing Finance can opt to change the EMI, as well. Borrowers can prefer either of the options at the time of executing the Home Loan contract.

How does Aadhar Housing Finance calculate the interest on the individual Home Loan account?

Usually, all housing finance companies calculate Home Loan interest on monthly reducing balance method. The banks have a better way of calculating interest. They use the daily reducing balance method. It is a better method because it gives the benefit of interest on the EMI paid during the month.

This example can explain things better.

Aadhar Housing Finance calculates Home Loan interest for September 2019 on balance outstanding on August 31, 2019. The instalment paid during the month does not get the benefit of interest for the month. It could be a small amount, but it cascades into a substantial amount over the entire tenure of the loan.

How does Aadhar Housing Finance determine the eligibility of its borrowers?

Salaried employees and self-employed individuals having documented records of income do not have any issues. However, Aadhar Housing Financecaters to the informal sector that does not have any documented source of income. This sector comprises daily labour, skilled artisans, and service providers like autorickshaw drivers. Aadhar Housing Finance conducts market surveys and discreet interviews to arrive at the income-generating capacity of such an informal sector.

Why is the rate of interest on Aadhar Housing Finance Home Loans higher than that of banks?

Aadhar Housing Finance is a non-banking housing finance company that does not accept deposits from the public. It depends on its net worth and bank borrowings for financing the borrowers. Secondly, it caters to the informal sector where risk perception is considerably high. Therefore, the rates of interest on the Aadhar Housing Finance Home Loans are higher than what the banks offer.

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