<p>Purchasing a home is supposed to be a big step in a common man’s life. It combines emotions like frustration, anxiety and a massive sense of accomplishment. Moreover, with rising property rates, it may be tough to purchase a home via your own savings entirely. Most individuals take the route of a home loan to purchase a home.&nbsp;</p><p>Given the inclusion of massive loan amounts clubbed with long repayment tenure, the home loan comes across to be a liability for many. However, the availability of various benefits on a home loan&nbsp;is one of the things that work in favour of the home loan borrowers. Below we will highlight the major home loan benefits.</p><h2><strong>What is Home Loan?</strong></h2><p>&nbsp;A home loan refers to a credit option taken up by borrowers to finance their dream home. With home loans, an individual can borrow the big-ticket amount from a financial institution at a particular interest rate, which is supposed to be repaid through EMIs for longer repayment tenures going up to 30 years. Note that in home loans, one is allowed to borrow funds of up to 75% - 90% of property’s value based on the loan amount. The remaining amount needs to be financed by the home loan borrower in the form of a down payment amount.&nbsp;</p><p>As home loans are secured in nature, the home you buy via a loan is taken up as security by a financial institution. In occasions of repetitive EMI default, the lenders may recover the loan amount via a sale of a home or property.&nbsp;</p><h2><strong>Top Benefits of Home Loan in India</strong></h2><h4><strong>&nbsp;Tax benefits</strong></h4><p>&nbsp;One of the crucial&nbsp;home loan benefits&nbsp;of taking up a home loan is an income tax deduction that one can claim on their interest or principal repayments. You can claim up to Rs 2 lakh on interest repayments under Section 24 B and up to Rs 1.5 lakh on principal repayment as per section 80 C.</p><h4><strong>Availability at lower rates</strong></h4><p>Home loans as secured credit options are available at lower rates with interest rates beginning from just 6.65% p.a onwards. Banks &amp; HFCs are offering lower rates of below 6.75% p.a. are Punjab &amp; Sind Bank, State Bank of India, Kotak Mahindra Bank and LIC Housing Finance.&nbsp;</p><h4><strong>Availability of longer loan tenure</strong></h4><p>&nbsp;Unlike various other credit options, home loans being a big-ticket credit option, are available at higher loan tenures that go up to thirty years. Due to the availability of longer tenure, one can choose their loan repayment tenure based on their repayment capacity.&nbsp;</p><h4><strong>Do not charge any prepayment fee in the case of the floating rate option.</strong></h4><p>As RBI has strictly disallowed all lenders from charging their borrowers foreclosure/prepayment charges on loan floating rates, those home loans taken up at floating interest rates do not come with any prepayment or foreclosure charges. While many lenders offering fixed-rate home loans may charge prepayment or foreclosure charges, few lenders may not charge any prepayment fees in case the prepayment of loan is made through your own funds.&nbsp;</p><h4><strong>Can opt for a top-up home loan option to meet emergencies or other financial mismatches&nbsp;</strong></h4><p>Only existing home loan borrowers are eligible to take up top-up home loans. Remember that these loans are the same as personal loans wherein borrowers are allowed to utilize their loan proceeds for meeting numerous big-ticket expenses such as car purchase, home improvement or renovation, children’s higher education, personal travel, medical expenses and others. Thus, there is zero restriction on funds’ usage on a top-up home loan, except if the loan proceeds are used for any speculation purpose. The presence of no restriction on funds usage through top home loans makes such credit options an alternative to loan against credit card and personal loans.&nbsp;</p><p>Also, remember that these loan options come at lower rates, which may be a little more than the underlying home loan rates with longer repayment tenures, which actually is dependent on the underlying home loan’s remaining tenure. Availability of lower rates and longer repayment tenures makes top-up loans one of the cheapest options that are available to existing home loan borrowers than their alternative credit options, namely loan against the credit card or personal loan.&nbsp;</p><h4><strong>What are the Most Popular Tax Benefits on Home Loans Available in India?</strong></h4><p>Home loan is one of the biggest tax-saving credit options owing to the availability of various tax deductions available as per Section 80 C, 24 b, and 80 EEA of the IT Act. Altogether, an eligible borrower of home loan can claim an overall tax deduction of nearly up to Rs 5 lakh wherein Rs 1.5 lakh deduction is allowed on principal repayments as per Section 80 C, Rs 2 lakh is allowed on loan interest component as per Section 24 b and Rs 1.5 lakh deduction is allowed on loan interest component as per Section 80 EEA if one meets the stated eligibility criteria.&nbsp;</p><h4><strong>When Should You Buy a Home Using Your Own Money?</strong></h4><p>Owing to the rising housing and property prices, owning a home by paying the entire amount is near to impossible for many. As an outcome, individuals opt for the home loan option to not just avail their dream home earlier but also make most of the available home loan benefits.</p><p>Big-ticket loan amounts clubbed with long repayment tenures available on home loans result in long term repayment commitment for the home loan borrowers. Also, lenders need their home loan borrowers to fund from their own pockets a sizable proportion of overall home buying or construction cost. Moreover, lenders even check home loan applicant’s repayment capacity when evaluating their application for a home loan. All such factors need prospective applicants of home loans to review his/her financial preparedness before submitting the home loan application.&nbsp;</p><p>Here, we will discuss the top four tips that a home loan applicant must consider to check his/her financial preparedness:&nbsp;</p><h4><strong>Build substantial corpus for home loan down payment</strong></h4><p>As the RBI has allowed the lenders to fund 75% to 90% of the cost of the property through a home loan, applicants of home loans require to contribute the remaining cost of the property from their own pocket as margin contribution or down payment. The ratio of home loan amount and home loan borrowers contribution from their own pocket is referred to as the LTV ratio. Though most home loan applicants prefer choosing higher LTV ratios, opting for a higher down payment for them would be more beneficial. They are choosing a lower LTV ratio results in a lower home loan amount, which helps at lowering the overall interest outgo incurred for property purchase or construction. As a lower LTV ratio lowers the lender’s credit risk, choosing the LTV ratio enhances the home loan approval chances at a lower rate of interest. However, one should not make a higher down payment by compromising on their contingency fund, or those investments particularly meant for achieving important financial goals. Doing this may impel one to take up high-cost credit options to mitigate financial goals or meet instant monetary crunch in case of financial exigencies.&nbsp;</p><h4><strong>&nbsp;Aim to build a higher credit score</strong></h4><p>&nbsp;A credit score is an important parameter factored in by home loan lenders when assessing the applicants for home loans. Applicants with higher scores of 750 or more have an increased probability of availing of home loan approval. Many lenders of home loans even provide preferential rates to the ones with higher scores. Thus, the ones planning to take up home loans must consider reviewing their credit reports regularly. Doing so would provide adequate time to the ones with lower scores to undertake required measures for ameliorating their scores before submitting the loan application for home.&nbsp;</p><p>The ones with lower scores can slowly build their scores by taking up credit cards and making their repayments of card bills on time. As the transactions through credit cards are equivalent to availing loans, such credit card transactions get reported to the credit bureaus, who use the data for setting one’s credit score. The ones who cannot take up regular credit cards owing to unserviceable location, risky job profile, low credit score etc., can take up secured credit cards for building their score.&nbsp;</p><h4><strong>Monthly repayment obligations for a loan within 60% of the monthly income</strong></h4><p>&nbsp;Just like other credit options, lenders of home loans factor in the home loan applicant’s repayment capacity when assessing their application for a home loan. Lenders generally consider lending the ones with a monthly repayment obligation for a loan, involving the new home loan’s EMI of within 60% of their income. Thus, the ones surpassing this limit must consider foreclosing or prepaying their prevailing loans to lower their EMI obligation. Also, these applicants can choose a lower LTV ratio or select longer repayment tenure to lower their overall EMI obligations.&nbsp;</p><p>Applicants of home loans can approach online EMI calculators for knowing their optimum EMI basis for their repayment capacity. Also, they must factor in their fund contributions towards important financial goals when estimating their disposal income. Submitting an application for a home loan once you know your repayment capacity lowers your chances of any EMI default or compromising your monthly investments towards your financial goals.&nbsp;</p><h4><strong>Include in your expected home loan EMI to your emergency fund</strong></h4><p>Uncertainties like job loss, illness, accident, disability etc., can massively affect your repayment capacity for loans. Failure to service home loan EMIs on time incurs heavy penalties and even adversely hampers your credit score. On the contrary, redeeming your investment for repayment of your EMIs for a home loan can morbidly damage your financial health. One of the ideal ways to ensure home loan repayment in such uncertain events is to add in the projected EMI for a home loan of at least six months to your emergency fund.&nbsp;</p><p>&nbsp;A major goal of creating an emergency fund is to keep yourself completely prepared to mitigate unavoidable expenditures such as rent, living expenses, child’s education costs, insurance premiums, loan EMIs and others in the situation of unforeseen financial emergencies or income loss.&nbsp;</p><h3><strong>FAQs</strong></h3><h4><strong>✅What are the benefits of home loan?&nbsp;</strong></h4><p>&nbsp;Home loan benefits&nbsp;include their availability at lower interest rates starting from as low as 6.65% p.a., longer repayment tenures going up to 30 years and involvement of no prepayment fees in case of floating home loans. Other benefits include the availability of tax benefits in home loans and the availability of top-up home loan options to only existing home loan borrowers at lower interest rates than their alternative options like credit card loans or personal loans to meet fund mismatches or to face financial emergencies.&nbsp;</p><h4><strong>✅Why do people go for home loans?&nbsp;</strong></h4><p>As homes involve big-ticket amounts, accumulating massive funds to finance one’s home dream may be near to impossible for many. Home loan comes across as a rescue for them as lenders allow one to buy their dream home by financing the home’s cost. Also, the interest rate on home loans is lower, with their tenures going as high as 30 years, which allows their applicants to opt for the home loan tenure basis their repayment capacity. The option of making a prepayment on a home loan is always available to their borrowers at zero cost in case of floating home loan rates. Opting for this option helps their borrowers to lower their overall interest cost.&nbsp;</p><h4><strong>✅Is home loan EMI tax-free?&nbsp;</strong></h4><p>&nbsp;The principal component of EMI paid on a home loan is allowed for a tax deduction as per Section 80 C. The maximum amount, which one can claim under this Section, is up to 1.50 lakh. In the case of the interest component paid on a home loan, a tax deduction of up to ₹ 2 lakh can be claimed as per Section 24 b.&nbsp;</p><h4><strong>✅How can I opt for a home loan?&nbsp;</strong></h4><p>Home loan applicants can avail of a better deal on home loans by widening their search for a home loan and opting for the lender offering the lowest interest rate for the optimal loan tenure as well as the loan amount.&nbsp;</p><h4><strong>✅Can husband and wife claim home loan interest?</strong></h4><p>In the case of joint home loan as the home or property may be jointly owned by the husband and wife, both are entitled to claim home loan benefits&nbsp;in reference to tax as per Section 24 b on interest repayment and on principal component repayment of home loan as per Section 80 C.</p>

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Know the various benefits of taking a Home Loan at mymoneymantra.com. Buy a new house or renovate the old one with the Home Loan amount and get the benefits.

Benefits of Home Loan in India - MyMoneyMantra

<p>Finance Writer: Expert in Loans &amp; Credit Cards</p>

Priyanka Jain

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<p>Omni Channel Content Specialist| enthusiastic personal finance writer | Top50 CM professional by WMC, CMO</p>

<p>Know the various benefits of taking a Home Loan at mymoneymantra.com. Buy a new house or renovate the old one with the Home Loan amount and get the tax benefits.</p>

<p>State Bank of India (SBI) has waived off 100% processing fee on home loans till August 31, 2021. This comes as a special bonus for new home loan borrowers.</p><p>Currently, the processing fee on <a href="https://www.mymoneymantra.com/home-loans/sbi"><strong>SBI Home Loans</strong></a> is 0.40 per cent of the sanctioned loan amount. Thus, a customer stands to save flat Rs 20,000 on a home loan of Rs 50 Lakh.&nbsp;</p><p>SBI in its press release said that the 'Monsoon Dhamaka Offer' is for limited period and ends on 31st August 2021. It will benefit the home loan borrowers substantially and revive the consumer sentiments.</p><p>SBI said: <i>There could not be a better time to buy a house, considering </i><a href="https://www.mymoneymantra.com/sbi-home-loan-interest-rates"><i><strong>SBI Home Loan Interest Rates</strong></i></a><i> start at just 6.70 per cent.</i>&nbsp;</p><p>C.S. Setty, Managing Director of SBI added, with historically low home loan interest rate the waiver on processing fee will further facilitate consumers and encourage the home buyers to take decision with ease.&nbsp;</p><p>Furthermore, the largest public sector lender in the country is also offering 0.05 % concession (interest rate discount) to home loan applications sourced digitally through YONO App. The women applicants get another 0.05% rate concession on SBI Home Loans.</p><p>The bank had offered a similar processing fee waiver offer in September 2020 as well.</p>

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Good news for home loan borrowers. SBI has waived off 100% processing fee on home loans. Further enjoy lower interest rate on online home loan applications.

SBI’s Monsoon Dhamaka: Zero Processing Fee for New Home Loans

<p>SBI’s Monsoon Dhamaka: Zero Processing Fee for New Home Loans</p>

<p>In the event of financial requirements, it is common for one to opt for loans. In case you are one of those already servicing or repaying your home loan EMIs, your best bet is often to opt for the top-up<strong> </strong>loan option, which is available over and above one's existing home loan. Though you can avail a different credit option like a personal loan, gold loan etc., they are generally available at a higher interest rate than top-up home loans. Thus, as top-up home loans come with no documented requirement and are available at a lower interest rate than other credit options, opting for them in case of financial emergencies are much better for existing home loan borrowers.&nbsp;</p><p>HDFC top-up loan, SBI home loan top up<strong> </strong>and other banks and HFCs provide top-up loans even when you opt for the home loan balance transfer option. Also, note that the features of top-up loans of home loans are similar to personal loans or loans against credit cards wherein the loan borrower is allowed to use their fund proceeds for meeting any purpose, may it be for funding their child's higher education, home renovation cost, travel abroad expenses etc. Thus, one can use top-up loans for meeting various purposes and at the same time enjoy their cost-effective rate of interest.&nbsp;</p><h2><strong>What is Top Up Loan?</strong></h2><p>Top-up home loans are an additional loan, which is taken over and above the outstanding home loan amount for mitigating big-ticket lifestyle expenses such as car buying, home renovation, medical exigencies, personal travel, child's higher education or wedding etc.&nbsp;</p><p>The loan amount sanctioned on top-up loans generally depends upon the difference between the originally disbursed home loan amount &amp; the outstanding loan amount. The lenders can allow a home loan amount of around Rs 50 lakh or more. On the contrary, in the situation of their alternatives, the personal loan's amount can go up to Rs 40 lakh basis on the applicant's capacity to repay. For loans against credit cards, their loan amount is generally a proportion of the card holder's free credit limit. Note that there are few credit card issuers who might permit credit card loans over and above the credit card user's credit card limit. Thus, in the event of the top-up loans, the possibility of getting higher loan amounts is way higher.&nbsp;</p><h3><strong>Benefits of Top Up Loan</strong></h3><p>The existing home loan borrowers might require incurring big-ticket lifestyle expenses related to home renovation or improvement, car purchase, personal travel, medical emergencies, child's higher education or wedding etc. The ones witnessing monetary mismatches or shortfalls to mitigate such expenses can look for taking up top-up loans on their home loans from their existing lenders of home loan.</p><p>Here, we will in detail discuss some of the top advantages of opting for top-up home loans for the existing home loan borrowers:&nbsp;</p><h3><strong>Fund proceeds that are available come with zero restriction on their end usage.</strong></h3><p>Though top-up loans<strong> </strong>can only be taken up by the existing borrowers of home loans, they do not have any restriction on the end-use of the funds. However, their funds cannot be used for meeting speculative purposes. The absence of end-use restriction on their loan proceeds makes top-up loans an alternative to personal loans or loans against credit cards for the existing borrowers of home loans. Proceeds available from top-up loans can be used for purchasing a car, funding a child's higher education or marriage etc.&nbsp;</p><h3><strong>Available at a lower rate of interest</strong></h3><p>Interest rates on personal loans can range anywhere from 9% to 24% p.a. based on the applicants' credit profiles. Loan against credit card's rates is usually a notch higher as compared to personal loan's rates available to the applicants from the same bank or NBFC. However, the top-up home loan's rates are usually the same or maybe slightly higher as compared to the existing rates of the underlying home loans. It makes top-up loans one of the cheapest loan options for the existing home loan borrowers who are availing of home loans at a lower rate of interest.</p><h3><strong>Higher repayment loan tenure</strong></h3><p>The repayment tenures of the top-up home loans primarily are based on the remaining tenure of the underlying home loan. For example, for the existing home loan borrowers with remaining home loan repayment tenure of 15 years, his top-up loan repayment tenure may be of up to 15 years. Loan repayment tenures for their alternative loan options such as personal loans and loans against credit cards are usually up to five years, with few of the lenders allowing to offer longer tenures on personal loans for up to 7 years. As higher loan repayment tenures result in reduced EMIs, selecting top loans might help in lowering the EMI burden.&nbsp;</p><h3><strong>Higher loan amount</strong></h3><p>Loan amount on the occasion of a top-up home loan can go nearly up to Rs fifty lakh or even more. Note that for top-up home loans, the loan amount calculation is primarily based on the difference between the originally disbursed home loan amount and the outstanding loan amount. The loan amount in the situation of personal loan ranges anywhere between Rs 50,000 and Rs 40 lakh based on the applicant's income and his repayment capacity. In the case of loans against credit cards, loan amounts usually are the portion of the credit card user's free credit card limit. However, some of the credit card issuers can provide a loan against a credit card option over the card user's credit limit. Hence, the possibility of availing higher loan amount in the case of top-up loans are much higher, particularly for the ones who have repaid a considerable portion of their original home loan amount.&nbsp;</p><h3><strong>Swift processing and documentation</strong></h3><p>Top-up home loan's processing time is generally longer as compared to personal loans and credit card loans. Loans against credit cards are generally sanctioned on the same day of submitting the loan application, while personal loans take time and are usually sanctioned within 2 to 7 days of a loan application. However, in the case of top-up home loans, a few of the lenders have begun offering such loans in pre-approved versions to the existing home loan borrowers. Top-up loans nowadays may get disbursed on the same day of the loan application. Availability of instant top-up home loans competes against personal loan options and loans against credit cards in terms of instant disbursal.&nbsp;</p><h3><strong>Features of Top Up Loan</strong></h3><h4><strong>High loan amount</strong></h4><p>Top-up home loan's loan amount usually goes up to Rs 50 lakh or even higher. Remember that for top-up home loans, their loan amount calculation is done based on the difference between the original home loan amount, which is sanctioned and the outstanding home loan amount.</p><h4><strong>Longer repayment tenure</strong></h4><p>A top-up home loan's repayment tenure basically depends upon the residual tenure of the underlying home loan. For instance, for existing borrowers of home loans with a residual home loan tenure of 15 years, his top-up repayment tenure would be up to 15 years.&nbsp;</p><h4><strong>Lower rate of interest</strong></h4><p>Top-up home loan's interest rates are generally the same or might be a little higher than the existing home loan's interest rate. This makes top-up loans one of the cheapest credit options for the existing home loan borrowers servicing their home loans at a lower rate of interest.</p><h4><strong>Has no restriction on funds end usage</strong></h4><p>Similar to a personal loan or loan against a credit card's loan proceeds, the loan proceeds of top-up home loans come with no restriction on their funds end usage. One can use the loan proceeds for any purpose such as home furnishing, meeting medical expenses, funding a child's education or marriage expenses etc. However, one cannot use the loan proceeds for any speculative reason.</p><h4><strong>Swift processing</strong></h4><p>While the regular top-up home loan may take up to a week to get disbursed, their instant version offered by some lenders makes the top-up home loans available to the existing home loan borrowers on the same day of submission of a loan application. Note that the availability of top-up home loans competes well against credit card loans and personal loan credit options in reference to instant disbursals.&nbsp;</p><h2><strong>Best Top Up Loan Interest Rates 2021</strong></h2><figure class="table"><table><tbody><tr><td colspan="4">Top-up home loan interest rates</td></tr><tr><td>Name of lender</td><td>Interest rate (%)</td><td>Loan amount (Rs)</td><td>Loan repayment tenure</td></tr><tr><td>State Bank of India</td><td>7.50 - 9.80</td><td>No limit</td><td>Up to 30 years</td></tr><tr><td>Punjab &amp; Sind Bank</td><td>8.10 - 8.65</td><td>Up to 25 lakh&nbsp;</td><td>Up to 10 years</td></tr><tr><td>Bank of Baroda</td><td>Applicable ROI on linked home loan + Strategic Premium + 0.60</td><td>1 lakh – 2 crore</td><td>Depends on the applicant's age criteria</td></tr><tr><td>Canara Bank</td><td>7.45 - 9.50</td><td>Up to 25 lakh</td><td>Up to 10 years</td></tr><tr><td>HDFC Ltd</td><td>For existing customers: 7.60 – 8.80; For new customers: As per home loan slab</td><td>Up to 50 lakh</td><td>Up to 15 years</td></tr><tr><td>Bank of India</td><td>Applicable interest rates linked home loan + 0.50</td><td>2 lakh onwards*</td><td>Up to 12 years</td></tr><tr><td>UCO Bank</td><td>8.70</td><td>1 lakh – 25 lakh</td><td>The personal loan is to be repaid before the borrower attains the age of 75 years.</td></tr><tr><td>Axis Bank</td><td>8.65 onwards</td><td>Up to 50 lakh</td><td>Same as the residual tenure of existing home loan</td></tr><tr><td>Bank of Maharashtra</td><td>7.40 – 8.65</td><td>Up to overall LTV ratio of 75%</td><td>Up to 15 years</td></tr><tr><td>Indian Bank</td><td>8.60 – 9.25</td><td>1 lakh-60 lakhs</td><td>Up to 10 years</td></tr><tr><td colspan="4">* Total loan amount including outstanding loan amount of existing home loan should not exceed 75% of distress value of property&nbsp;</td></tr><tr><td colspan="4"><strong>Data as of 27th July 2021</strong></td></tr></tbody></table></figure><h3><strong>Eligibility Criteria</strong></h3><p>Existing home loan borrowers can take up top-up home loans basis the listed conditions:&nbsp;</p><p>* Top up loans can just be extended against a complete property with zero post disbursal documentation requirement.</p><p>* For the existing borrowers, a clear repayment track record of home loan's EMI is crucial. Even one bounced EMI can hamper the borrower's approval chances for availing of top-up home loans.</p><p>* An existing home loan borrower becomes eligible for the top-up option post 6 months' clear repayment.</p><p>* For a top-up home loan with the takeover of the home loan from another lender, a 1-year clear repayment history will be needed.&nbsp;</p><h3><strong>Documents Required</strong></h3><p>Usually, in the case of pre-approved top-up home loan offer to the existing home loan borrowers, there is no requirement of any documentation as lenders offer the pre-approved option to select borrowers with a good credit profile and excellent repayment record. However, in the case of regular top-up loans, few documents may be required.&nbsp;</p><p>An updated bank account statement showing your existing home loan EMIs is a vital document needed for a top-up loan. Before you submit an application, ensure to avail relevant information regarding the documents needed as different lenders have different document requirements. Doing so can help you fasten up your approval process.&nbsp;</p><h3><strong>How to Apply for Top Up Loan in India</strong></h3><p>There are majorly 2 ways to apply for top home loans. Firstly, you can directly approach your existing home loan lender to avail of the loan by visiting the bank or HFC branch. Secondly, you can visit the lender's website and apply for a top-up loan online, wherein you require submitting your contact details, and the respective lender will contact you.</p><h3><strong>FAQ</strong></h3><h4><strong>✅What is the benefit of top-up loan?&nbsp;</strong></h4><p>One of the main benefits of top-up loans is that they are available at a lower interest rate than their alternatives, such as personal loans and loans against credit cards. Additionally, the loan repayment tenure offered by top-up home loans are even much higher and are based on the residual tenure of the underlying home loans. However, in the case of their alternative credit option, personal loans allow a loan tenure of up to 7 years and loans against credit cards permit a loan repayment tenure of up to 5 years.&nbsp;</p><h4><strong>✅How much top-up loan can I get?&nbsp;</strong></h4><p>The loan amount for a top-up home loan can go up to Rs 50 lakh or more. Note that in the case of top-up loans, their calculation for a loan amount is on the basis of the difference between the originally disbursed or sanctioned home loan amount and the outstanding home loan amount.</p><h4><strong>✅Is a top-up loan a good idea?&nbsp;</strong></h4><p>Yes, for the existing home loan borrowers, opting for a top-up home loan is the best decision they can make in the event of financial shortages or emergencies. It is because top-up home loan's interest rates are lower as compared to their alternatives like personal loans and loans against credit cards. Also, the top-up loan option's repayment tenure is higher than personal loan and credit card loans. Furthermore, the chances of availing of the higher loan amount are more in the case of top-up home loans than unsecured loan alternatives.&nbsp;</p><h4><strong>What is the interest rate for a top-up loan in Axis Bank?&nbsp;</strong></h4><p>The top-up home loan rate offered by Axis Bank begins from 8.65% p.a onwards.</p><h4><strong>What is the rate of interest for a top-up loan in SBI?&nbsp;</strong></h4><p>SBI's top-up home loans interest rate at present ranges between 7.50% p.a. and 9.80 % p.a.</p>

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Top-up loan can be used for the purpose of modification or construction of your house or to meet your personal expenses. Know more about top up loans here.

What is Top-up Loan? Should You Avail One?

Reshma Rawat

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<p>Top-up loan can be used for the purpose of modification or construction of your house or to meet your personal expenses. Know more about top up loans here.</p>

<h2><strong>What are the Home Loan Tax Benefits in 2021?</strong></h2><p>Purchasing a home is one of the significant financial decisions one makes in their lifetime. To give it a push, the Indian government has come up with various home loan tax benefit options to encourage home seekers to invest in the home through a home loan. One of the most common home loan tax benefits generally availed by individuals is offered by Section 80 C, wherein up to Rs 1.5 lakh tax deduction is allowed on account of repayment of the principal component. And a home loan tax benefit of up to Rs 2 lakh can be availed on repayment of the interest component for the self-occupied property under Section 24b. Apart from this, there are other income tax benefits on home loans available to the home loan borrowers about which we will discuss below.&nbsp;</p><p>Besides this, note that the government has also come up with numerous schemes, such as Pradhan Mantri Jan Dhan Yojana, which strives at bringing down the problem of accessibility and affordability.&nbsp;</p><h2><strong>Income Tax Benefit on Home Loan in FY 2021-22</strong></h2><p>Have any idea about the income tax rebate on a home loan provided by the government? Here, we will look at numerous home loan tax benefits that one can claim against their home loan.&nbsp;</p><figure class="table"><table><tbody><tr><td colspan="3"><strong>Home loan tax benefit</strong> in FY 2021-22</td></tr><tr><td>IT Section</td><td>Home loan tax deduction nature</td><td>The maximum tax deduction amount</td></tr><tr><td>Section 80C</td><td>Principal (including the registration &amp; stamp duty fee)</td><td>1.50 lakh</td></tr><tr><td>Section 24 (b)</td><td>Interest&nbsp;</td><td>Rs 2 lakh</td></tr><tr><td>Section 80EE</td><td>In addition, interest for first-time buyers</td><td>Rs 50,000</td></tr></tbody></table></figure><p>Indian government provides home loan tax benefits under the IT Act of 1961. Home loan borrowers can avail the benefits of the tax deduction on interest under Section 24 (b), tax deduction on principal under Section 80C and additional home loan tax benefit for first time home applicants as per Section 80EE.</p><p>Such tax saving on home loans assists borrowers in saving a sizable component per year. Moreover, the Finance Minister - Nirmala Sitharaman, on 1st&nbsp;February 2021, in the Union Budget, extended additional tax deduction on interest paid of up to Rs 1.50 lakh for buying affordable homes by a year more. Thus, the home loan borrowers can avail of deduction on interest paid of up to Rs 3.50 lakh for a year more until 31st&nbsp;March 2022. Remember that such tax deductions are available as per Section 80EEA, which offers home loan tax benefits of up to 1.50 lakh on the interest component serviced through home loans. Such benefits on a home loan are available over and above the present exemption of Rs 2 lakh as per Section 24 b.</p><p>However, note that such deductions can just be claimed to buy houses available at a value of up to Rs 45 lakh. Homebuyers can claim such benefits on home loans if availed till 31st March 2022. &nbsp;</p><h3><strong>Home Loan Tax Benefits under Section 80C</strong></h3><p>Section 80 C of the IT Act offers a home loan tax benefit linked to principal amount repayment. As per the section, the amount serviced as repayment of principal amount through home loan is permitted as a deduction for up to Rs 1.50 lakh.&nbsp;</p><p>&nbsp;Crucial terms for a tax deduction on home loan principal repayment based on Section 80C:&nbsp;</p><ul><li>Such types of deductions are permitted after the home construction. Also, completion certificates must be awarded for obtaining such deductions. Such deductions cannot be permitted for periods under which the home was under the construction phase.&nbsp;</li><li>&nbsp;Crucial point to be considered is that according to Section 80 (5), one cannot transfer their property if deduction under Section 80 has been obtained. These properties cannot be transferred for a minimum 5 years period from the end of the year when possession of the home was obtained. In case such properties are sold under a 5 year period, all the deductions that were permitted as a tax benefit in erstwhile years may be considered to be your income when you made such property sale.&nbsp;</li></ul><figure class="table"><table><tbody><tr><td>Particulars</td><td>Section 80C of the IT Act</td></tr><tr><td>Tax deduction permitted for&nbsp;</td><td>Principal</td></tr><tr><td>Kind of property</td><td>Just residential house property</td></tr><tr><td>Tax deduction basis</td><td>Paid basis</td></tr><tr><td>Tax deduction allowed</td><td>Rs 1.50 lakh</td></tr><tr><td>Loan purpose</td><td>Construction of new property/purchase</td></tr><tr><td>Eligibility to claim a tax deduction</td><td>Nil</td></tr><tr><td>Restriction on the property sale</td><td>Deduction claimed can be reversed if the property is sold off within 5 years.</td></tr></tbody></table></figure><h3><strong>Home Loan Tax Benefits under Section 24B</strong></h3><p>According to the Section 24 b of the Income Tax Act, 1961, one can avail<strong> of home loan tax benefit </strong>on home loan interest amount. As per the Section, one can claim up to Rs 2 lakh tax deduction on the interest paid for a home loan for a self-occupied property. However, zero maximum limit applies in the situation of the property, which may not be self-occupied, is deemed or rented. A taxpayer can get a deduction of the entire amount paid as per Section 24. However, if the property owner owing to employment or occupation reason does not occupy the home and is living in another place, the maximum tax deduction permitted will be Rs 2 lakh. Property must be constructed or bought within a span of 5 years from the end of the financial year when the loan was drawn.&nbsp;</p><figure class="table"><table><tbody><tr><td>Particulars&nbsp;</td><td>Section 24 b of IT Act&nbsp;</td></tr><tr><td>Tax deduction permitted for</td><td>Interest</td></tr><tr><td>Property type</td><td>Any kind of real estate property</td></tr><tr><td>Tax deduction basis</td><td>Accrual basis</td></tr><tr><td>The amount allowed for a tax deduction</td><td>Self-occupied property: Rs 2 lakh</td></tr><tr><td>Loan purpose</td><td>Construction/purchase/renewal/repair/reconstruction of residential home property</td></tr><tr><td>Eligibility to claim tax deductions</td><td>Construction must be completed with a span of 5 years/Purchase.</td></tr></tbody></table></figure><h3><strong>Tax benefits on home loan as per Section 80EE</strong></h3><p>&nbsp;Just the first time, home loan owners can claim home loan tax benefits as per Section 80EE. According to the section provision, an additional Rs 50,000 deduction may be permitted to those making payment of interest on their home loan. This specific incentive can be separate &amp; in excess of Rs 2 lakh deduction permitted under Section 24 and deduction of Rs 1.5 lakh permitted as per Section 80 C.&nbsp;</p><h4><strong>Crucial conditions for a tax deduction on first home loan interest according to Section 80EE</strong></h4><ul><li>Taxpayers must not be the owner of any other type of property when submitting the loan application. Property against which home loan is taken must be the first.&nbsp;</li><li>Property’s value must be up to Rs 50 lakh.</li><li>Home loan taken must be up to Rs 35 lakh.</li><li>Amount of such home loan must be disbursed to individuals between 1st&nbsp;April 2016 &amp; 31st&nbsp;March 2017.&nbsp;</li></ul><figure class="table"><table><tbody><tr><td>Particulars</td><td>Section 80EE</td></tr><tr><td>Tax deduction permitted on</td><td>Interest</td></tr><tr><td>Property type</td><td>Just residential home property</td></tr><tr><td>Tax deduction basis</td><td>On paid basis</td></tr><tr><td>Tax deduction amount permitted</td><td>Rs 1.50 lakh</td></tr><tr><td>Loan purpose</td><td>Construction of new home property/purchase</td></tr><tr><td>Eligibility to claim a tax deduction</td><td>Nil</td></tr></tbody></table></figure><h3><strong>Additional deduction on tax as per PMAY - CLSS scheme: Section 80EEA</strong></h3><p>To make purchasing homes affordable, the government has extended the interest deduction permitted for the low-cost housing loan to 31st&nbsp;March 2022. According to this new section of 80EEA, one can claim up to Rs 1.50 lakh deduction on interest paid for a home loan.&nbsp;</p><h4><strong>For claiming the benefits, listed conditions must be met:&nbsp;</strong></h4><ul><li>Stamp duty value of the house property must be within Rs 45 lakh.&nbsp;</li><li>You must not own a residential property on loan sanction date.&nbsp;</li><li>You must not be eligible for claiming a deduction as per Section 80EE of the IT Act.</li></ul><h4><strong>Income Tax Benefit on Home Loan on Buying Second Property</strong></h4><p><strong>&nbsp;</strong>One can claim this tax deduction on availing of their second home loan but just on interest paid on a home loan. Presently, individuals can claim a home loan tax benefit just for the 1 property, which is self-occupied and conduct tax repayments basis notional rent.&nbsp;</p><h4><strong>Income Tax Benefit on Joint Home Loan</strong></h4><p>Submitting a home loan application jointly not just enhances one’s home loan eligibility. It even renders home loan tax benefits. Those individuals taking up home loans jointly are given a choice to take up avail tax benefit individually. It implies that if 2 individuals have submitted an application for a joint home loan, each of them can claim the home loan tax benefit of up to Rs 2 lakh and up to Rs 1.5 lakh on their home loan interest and principal, respectively. Thus, the combined home loan tax benefit that they may enjoy can sum up to Rs 7 lakh only if they meet the required prerequisites.&nbsp;</p><h3><strong>How to Claim Tax Benefit on Home Loan in India?&nbsp;</strong></h3><p>The procedure for claiming home loan tax benefits is very simple and easy.</p><ul><li>Ensure you are the owner of the residential property. In the situation of a joint home loan, make sure to be the home’s co-owner.&nbsp;</li><li>Ensure to calculate the overall amount that you can claim in the form of tax deduction.&nbsp;</li><li>Ensure to hand over your company with whom you are working your home loan interest certificate to make sure they adjust the TDS. On failing to follow the step, you require filing your IT returns.</li></ul><p>&nbsp;A self-employed borrower requires not to submit such documents. They should keep them handy so that they can provide them right away in the case of any query in the future.&nbsp;</p><h3><strong>FAQs</strong></h3><p><strong>✅What is the home loan tax deduction in case of a joint loan?</strong></p><p>&nbsp;If a home loan is taken jointly, each home loan borrower can enjoy home loan tax benefits from their taxable income individually. Note that one can claim up to Rs 1.5 lakh on their principal amount paid and up to Rs 2 lakh on their interest amount paid.&nbsp;</p><h4><strong>✅Is there any home loan tax benefit on a second home?</strong></h4><p>&nbsp;In case you take another home loan, home loan tax benefits are applicable on payable interest components. In this case, you can claim the whole interest amount that is paid as no cap is applied to it. Presently, individuals can claim just one property in the form of self-occupied and make the tax payments on another notional basis rent.&nbsp;</p><h4><strong>✅How to claim a home loan tax benefit?</strong>&nbsp;</h4><p>The procedure to claim the home loan tax benefit involves:&nbsp;</p><ul><li>Ensure the residential property is owned by you. In the event of a joint home loan, make sure you are the co-owner of the home loan.&nbsp;</li><li>Calculate the overall amount that you can claim in the form of tax deduction.</li><li>You should hand over the company with whom you are employed with your home loan interest certificate so that they can adjust TDS. Not following the step will require you to file IT returns.&nbsp;</li></ul><p>&nbsp;A self-employed person does not require to submit any of the above-mentioned documents. However, they should keep required documents handy in the case of any query, which may come up in future.&nbsp;</p><h4><strong>✅What is the highest amount eligible for a tax deduction for a home loan?</strong></h4><p><strong>&nbsp;</strong>The maximum tax-deductible amount for a home loan is stated below as per IT Act 1961:</p><ul><li>Up to Rs 1.50 lakh on the principal amount repaid as per Section 80C.&nbsp;</li><li>Up to Rs 2 lakh deduction under Income tax act on home loan interest amount repaid as per Section 24 b.&nbsp;</li><li>Up to Rs 1.50 lakh on interest repaid for only first time home buyers under Section 80EEA</li><li><strong>✅Who is eligible for Income tax exemption on a home loan?&nbsp;</strong></li></ul><p>An individual who has bought a new home for self-occupation or to rent out can claim the tax exemption as per Section 24(b), 80C and 80EEA of the IT Act, 1961. Co-owners or co-borrowers of home loans can even claim home loan tax benefits.&nbsp;</p>

What are the home loan tax benefits in 2021

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know about Tax benefit on Home loan, Housing loan interest deduction, Income Tax rebate on Home loan.Find out Income tax exemption and home loan tax benefit

What are the Home Loan Tax Benefits in 2021? 

<p>know about Tax benefit on Home loan, Housing loan interest deduction, Income Tax rebate on Home loan.Find out Income tax exemption and home loan tax benefit</p>

<h2><strong>Home Loan Insurance</strong></h2><p>Home loan insurance is even addressed by the term mortgage insurance, which is a massively popular term in the present-day world owing to the rising prices of housing. As life is uncertain and prone to unpredictable events, most individuals usually secure their future as well as the future of their near and dear ones by opting for home loan insurance. To know how they can be of great help to us and benefit us, we must first know what home loan insurance&nbsp;actually is.</p><h2><strong>What is Home Loan Insurance?</strong></h2><p>A home loan insurance&nbsp;scheme is a plan under which the plan insurer settles the home loan outstanding amount with the concerned HFCs or banks in case of any unforeseen event with the home loan borrower. Few of the comprehensive plans related to&nbsp;home loan insurance schemes may offer cover for the home, applicant and all their contents. The premium that is meant to be paid for the home loan insurance&nbsp;scheme is applicable to avail tax benefits.</p><h2><strong>Why is Home Loan Insurance Important?</strong></h2><h4><strong>Importance of home loan insurance for the lenders:</strong></h4><p>Home loan lenders do not want their offered home loans to convert into bad debt. They generally look forward to protecting the money. To avoid the home loan converting into bad debt, most lenders want their borrowers to take up&nbsp;home loan insurance. On the occasion of the borrower's unexpected demise, lenders may end up losing a lot, particularly if the home loan borrower was the sole breadwinner of the family.</p><h4><strong>Importance of home loan insurance for the home loan borrowers:</strong></h4><p>As we are already aware, the home loan insurance scheme covers home loan outstanding amounts in the case when borrowers are unable to repay their debts. Such cases might come up if the borrower faces job instability or faces demise. The borrowers might select a regular plan or choose the one with additional features clubbed with riders for more enhanced insurance coverage.&nbsp;Home loan insurance is necessary for home loan borrowers as it makes sure that their dependents do not turn homeless in their absence or in case of any crisis situation.</p><h2><strong>Crucial aspects to be factored in before choosing a home loan insurance scheme:</strong></h2><h3><strong>Major ways that one can select for insuring their home loan are listed below:</strong></h3><ul><li><strong>Term insurance:&nbsp;</strong>This is bought so that all of your debts and liabilities can be taken care of in case of your absence.</li><li><strong>Separate home loan insurance:&nbsp;</strong>It is an insurance plan that just takes care of your outstanding home loan amount at the time when you are not able to repay it off.</li></ul><p>Most&nbsp;home loan insurance plans provide reducing cover. The size of such covers is linked to home loans outstanding. Thus, the insured sum goes down on repayment of the home loan EMI. However, in the case of term insurance, the cover remains the same. In the situation of a term policy, the assured sum is received by the nominee who requires making the repayment to the bank/HFC for settling the home loan.</p><p>A home loan insurance&nbsp;plan can be bought either from a life insurance company or a general insurance company. Those plans that are provided by general insurance companies require being renewed annually. Policies issued by life insurance companies come with longer terms. Issuers can even ask for add-on covers and riders. Adding in them can be helpful in situations like disability and unemployment alongside death. Also, note to check the&nbsp;home loan insurance&nbsp;plan covers both accidental death and natural death.</p><p>The insurance cover period and loan repayment tenure period should match. Thus, it is not recommended to choose a shorter cover period with the thought process that you will increase it later on. They hold a strong chance of you missing out on the extension of it. Also, as you become older, it gets tough for you to avail substantial coverage. Even if you avail of it, it may be very costly.</p><p>Thus, when you decide to buy a specific protection plan, make sure that it is a perfect match with all your home loan repayment tenure. Strike a comparison of different products prevalent in the market &amp; then pick up the one that matches your needs. Before bundling up your home loan EMI repayments along with the premium payments, ensure to sort out your expenditures.</p><h2><strong>Benefits of Home Loan Insurance</strong></h2><ul><li>In the untimely event of an unfortunate death of the home loan borrower, the insurer can repay the outstanding home loan amount to the bank or HFC.</li><li>As per Section 80C, tax benefits can be availed</li><li>Borrowers can take up add-on covers and even riders for enhancing their&nbsp;home loan insurance&nbsp;scheme. Adding in add on or rider options makes sure that the outstanding home loan amount is not just covered in the situation of witnessing an unfortunate death but also in case of critical illness or disability.</li></ul><h2><strong>Types of Home Loan Insurance</strong></h2><p>There are 3 kinds of&nbsp;home loan insurance schemes that involve a level plan, hybrid cover plan and reducing plan, which is discussed below:</p><ul><li><strong>Level plan</strong>: Throughout the loan repayment tenure, the cover stays the same for the insured.</li><li><strong>Hybrid plan</strong>: Cover stays full in the course of the first year. It begins lowering as the home loan balance amount lowers with the tenure.</li><li><strong>Reducing plan</strong>: Both the outstanding loan and cover lowers with loan tenure.</li></ul><p>It must be evident from above that the borrowers can take up&nbsp;a home loan insurance&nbsp;scheme if they have not taken up term insurance. On the grounds of features, home loan insurance&nbsp;and term insurance share almost the same benefits, with home loan insurance&nbsp;being restricted just towards meeting up the home loan debts in case of any uncertainty, while term insurance serves as a replacement income to meet all the liabilities and loan obligations of the insurer by their dependents. Borrowers having home loans must definitely think of taking up&nbsp;home loan insurance&nbsp;to secure their family against any unfortunate happening. However, note that taking up&nbsp;home loan insurance&nbsp;is not at all mandatory. But borrowers of the home loan must still consider this after or while taking a home loan.</p><h2><strong>Difference between Home Loan Insurance &amp; Home Insurance</strong></h2><p>Individuals usually get confused between&nbsp;home loan insurance&nbsp;and home insurance. Note that these 2 terms are completely different &amp; serve different purposes.</p><p>As per the home insurance, the insurance assists at covering your home against major risks like:</p><ul><li>Damage from any natural calamity such as storm, earthquake, fire, flood etc.</li><li>Damage of the property or home owing to theft.</li></ul><p>It means home insurance serves as a replacement cost of a home in case of any damage. However, home loan insurance&nbsp;plans cover the home loan that you take for purchasing the home or property. The plan covers just the home loan outstanding amount from the purchase date. While most lenders have made the purchase of home insurance mandatory, home loan insurance&nbsp;plans are not compulsory and depend on the sole discretion of the home loan applicant or loan borrower.</p><h3><strong>FAQs</strong></h3><h4><strong>✅Is purchasing a home loan insurance plan mandatory?</strong></h4><p>It is certainly not compulsory to purchase a&nbsp;home loan insurance plan. However, few of the lenders may insist their borrowers purchase one to ensure timely repayments of their home loan EMIs even in cases when the borrower witnesses any uncertainty. However, choosing a&nbsp;home loan insurance&nbsp;plan is completely an individual choice and is advantageous for both the borrower and lender.</p><h4><strong>✅How much does home loan insurance cost?</strong></h4><p>Home loan insurance&nbsp;plans vary from lender to lender or from one insurance company to another. Also, the insurance amount is based on the borrower’s home loan amount. Moreover, it further depends on the&nbsp;home loan insurance&nbsp;the borrower has opted for.</p><h4><strong>✅How does the home loan insurance function?</strong></h4><p>Home loan insurance plan functions as a home loan protection plan. The premium for home loan insurance is charged one time, which is distributed based on the home loan EMIs. In a situation of repayment failure, the insurer repays the loan amount on behalf of the insured.</p><h4><strong>✅What is meant by the home loan protection scheme?</strong></h4><p>A home loan protection scheme refers to the insurance scheme, as per which the insurer carries out the loan responsibilities when the borrower fails to repay them owing to unforeseen reasons.</p><h4><strong>✅Is property insurance for home loans mandatory for the home loan borrowers as per the RBI?</strong></h4><p>No, as per RBI, it is not mandatory for home loan borrowers to opt for property insurance for a home loan plan. However, lenders might advise their borrowers to purchase&nbsp;property insurance for a home loan, but it is completely dependent upon the borrower's choice to do so.</p><h4><strong>✅Name some popular home loan insurance schemes.</strong></h4><p>Insurers cater to various home loan insurance schemes, including HDFC home loan insurance,&nbsp;SBI home&nbsp;loan insurance etc. A few of them are SBI Life Rinn Raksha, SBI Life Saral Shield, SBI Life Smart Shield, HDFC life home loan protection scheme etc.</p>

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Are you planning to buy your first home? Get to know everything about home loan insurance, how to avail home loan protection, insurance premium etc. Read more

What is Home Loan Insurance | All You Need to Know About Home Loan Insurance

<p>Are you planning to buy your first home? Get to know everything about home loan insurance, how to avail home loan protection, insurance premium etc.&nbsp;</p>

<h2><strong>What is the Interest Rate on Home Loans in India?</strong></h2><p>What is the interest rate on home loans is one of the first questions that arises in the minds of those looking for availing home loans. The major reason for this question, 'what is the interest rate on home loans' comes up because the rates of home loans are one of the most crucial factors that significantly impact the overall home's cost. As home loans come with big-ticket amounts and for higher repayment tenures, even a minor difference in their rates can have a sizable financial implication, particularly in the long term. Availing a lower rate on a home loan not just helps at lowering one's EMI outgo but even the entire home loan interest cost. Thus, it is crucial that if you want to avail of a home loan, you should first consider comparing all the possible options available and then select the lowest rate on offer with other suitable terms and conditions.</p><p>Here, in this article, we will understand what the interest rate on home loans in India, the different types of interest rates on home loans available, the difference between fixed and floating home loan rates and what are the factors that impact home loan's rate is.&nbsp;</p><h2><strong>What is the Interest Rate on Home Loans in 2021?</strong></h2><figure class="table"><table><tbody><tr><td colspan="4">Home Loan Interest Rates (%)</td></tr><tr><td rowspan="2">Name of Lender</td><td colspan="3">Loan Amount (Rs)</td></tr><tr><td>Up to Rs 30 lakh</td><td>Above Rs 30 lakh &amp; up to Rs 75 lakh</td><td>Above Rs 75 lakh</td></tr><tr><td colspan="4">Public Sector Banks</td></tr><tr><td>Punjab &amp; Sind Bank</td><td>6.65 - 7.60</td><td>6.65 - 7.60</td><td>6.65-7.60</td></tr><tr><td>State Bank of India</td><td>6.70 - 7.50</td><td>6.95 - 7.65</td><td>7.05 - 7.75</td></tr><tr><td>Bank of Baroda</td><td>6.75 - 8.35</td><td>6.75 - 8.35</td><td>6.75 - 8.60</td></tr><tr><td>Union Bank of India</td><td>6.80 - 7.60</td><td>6.90 - 7.65</td><td>6.90 - 7.65</td></tr><tr><td>Punjab National Bank</td><td>6.80 - 7.75</td><td>6.80 - 7.90</td><td>6.80 - 8.00</td></tr><tr><td>Central Bank of India</td><td>6.85 - 7.30</td><td>6.85 - 7.30</td><td>6.85 - 7.30</td></tr><tr><td>Bank of India</td><td>6.85 - 8.35</td><td>6.85 - 8.35</td><td>6.85 - 8.35</td></tr><tr><td>Canara Bank</td><td>6.90 - 8.90</td><td>6.90 - 8.90</td><td>6.90 - 8.90</td></tr><tr><td>UCO Bank</td><td>6.90 - 7.25</td><td>6.90 - 7.25</td><td>6.90 - 7.25</td></tr><tr><td>Bank of Maharashtra</td><td>6.90 - 8.05</td><td>6.90 - 8.40</td><td>6.90 - 8.40</td></tr><tr><td>IDBI Bank*</td><td>6.95 - 10.05</td><td>6.95 - 10.05</td><td>6.95 - 10.05</td></tr><tr><td>Indian Bank</td><td>7.00 - 7.25</td><td>7.10 - 7.35</td><td>7.20 - 7.40</td></tr><tr><td>Indian Overseas Bank</td><td>7.05</td><td>7.15</td><td>7.30</td></tr><tr><td colspan="4">Private Sector Banks</td></tr><tr><td>Kotak Mahindra Bank^</td><td>6.65 - 7.30</td><td>6.65 - 7.30</td><td>6.65 - 7.30</td></tr><tr><td>ICICI Bank^^</td><td>6.75 - 7.30</td><td>6.75 - 7.45</td><td>7.10 - 7.55</td></tr><tr><td>Axis Bank</td><td>6.90 - 11.50</td><td>6.90 - 11.50</td><td>6.90 - 8.55</td></tr><tr><td>HSBC Bank</td><td>7.20 - 7.75</td><td>7.20 - 7.75</td><td>7.20 - 7.75</td></tr><tr><td>Karur Vysya Bank</td><td>7.35 - 9.55</td><td>7.35 - 9.55</td><td>7.35 - 9.55</td></tr><tr><td>Karnataka Bank</td><td>7.50 - 8.75</td><td>7.50 - 8.75</td><td>7.50 - 8.85</td></tr><tr><td>Federal Bank</td><td>7.65 - 7.70</td><td>7.70 - 7.75</td><td>7.75 - 7.80</td></tr><tr><td>Dhanlaxmi Bank</td><td>7.85 - 9.00</td><td>7.85 - 9.00</td><td>7.85 - 9.00</td></tr><tr><td>South Indian Bank</td><td>7.95 - 9.45</td><td>7.95 - 9.45</td><td>7.95 - 9.45</td></tr><tr><td>Tamilnad Mercantile Bank</td><td>8.25</td><td>8.25</td><td>8.25</td></tr><tr><td>Bandhan Bank (GRUH Home Loan)</td><td>8.50 - 11.75</td><td>8.50 - 11.25</td><td>8.50 - 11.25</td></tr><tr><td>RBL Bank</td><td>10.20 - 12.80</td><td>10.20 - 10.70</td><td>9.50 - 10.00</td></tr><tr><td colspan="4">Housing Finance Companies (HFCs)</td></tr><tr><td>LIC Housing&nbsp;</td><td>6.66 - 7.85</td><td>6.66 - 8.05</td><td>6.90 - 8.05</td></tr><tr><td>HDFC Ltd***</td><td>6.75 - 7.45</td><td>7.00 - 7.70</td><td>7.10 - 7.80</td></tr><tr><td>Bajaj Finserv&nbsp;</td><td>6.75 - 8.50</td><td>6.75 - 8.50</td><td>6.75 - 8.50</td></tr><tr><td>Tata Capital</td><td>&gt;=6.90</td><td>&gt;=6.90</td><td>&gt;=6.90</td></tr><tr><td>PNB Housing</td><td>7.35-9.35</td><td>7.35-9.55</td><td>7.70-9.55</td></tr><tr><td>GIC Housing Finance</td><td>&gt;=7.45</td><td>&gt;=7.45</td><td>&gt;=7.45</td></tr><tr><td>Repco Home Finance</td><td>&gt;=7.75</td><td>&gt;=7.75</td><td>&gt;=7.75</td></tr><tr><td>Indiabulls Housing</td><td>&gt;=8.65</td><td>&gt;=8.65</td><td>&gt;=8.65</td></tr><tr><td>Aditya Birla Capital</td><td>9.00 - 12.50</td><td>9.00 - 12.50</td><td>9.00 - 12.50</td></tr><tr><td>Reliance Home Finance</td><td>9.75 - 13.00</td><td>9.75 - 13.00</td><td>9.75 - 11.00</td></tr><tr><td colspan="4">*10 bps concession for women borrowers under limited period offer. Conditions apply.&nbsp;</td></tr><tr><td colspan="4">**Interest rate of 6.85%-7.00% p.a. offered under IND AWAS Scheme&nbsp;</td></tr><tr><td colspan="4">^ Special HLBT rates starting at 6.65% p.a. for any loan amount.&nbsp;</td></tr><tr><td colspan="4">^^ HLBT interest rate range of 6.75%-7.55% p.a. for any loan amount, with repayment from ICICI Bank Account&nbsp;</td></tr><tr><td colspan="4">^^^ HLBT offered at an interest rate of 6.64% p.a.&nbsp;</td></tr><tr><td colspan="4">***Special interest rates available under limited period offer. Valid for disbursements availed on or before 30th September 2021&nbsp;</td></tr><tr><td colspan="4">Rates as of 21st July 2021</td></tr></tbody></table></figure><h2><strong>Types of Interest Rate on Home Loans in India</strong></h2><p>Fixed interest rate: Fixed rates on home loans stay the same throughout the home loan tenure, which keeps the EMI on home loans constant. Note that opting for home loans at fixed rates is a better option when the present home loan rates are very low, with an anticipation for an upward trend in future for home loans interest rates. However, in reference to the present trend of falling interest rates, HFCs/banks are providing their customers with the choice of switching to floating rates after completion of a specific time period.&nbsp;</p><p>Floating interest rate: Floating rates even are addressed by the term variable interest rate. It is dependent upon the present market lending interest rates and thus may change in the course of the loan tenure. EMIs of home loans rise or fall based on the movement of the interest rate. Note that with the present trend of falling home loan rates, opting for floating interest rates is beneficial for prospective home loan applicants.&nbsp;</p><p>Mixed interest rate: Mixed interest rate home loans include fixed interest rates for initial years and then switch to variable or floating interest rates for the remaining loan tenure.&nbsp;</p><h2><strong>Fixed vs Floating Home Loan Interest Rates</strong></h2><p>As explained in the case of fixed interest rates, the home loan rates stay the same for the whole loan repayment tenure. This permits borrowers to estimate their overall repayment liability clubbed with overall interest cost at the starting of the loan repayment tenure. Opting for a home loan at a fixed interest rate even assists in planning repayments and managing finances efficiently. Fixed rates are suitable in the course of times when the chances of a rise in interest rate exist. However, this option is not suitable under the circumstances, which predict a falling trend in rates. Also, lenders charge prepayment fees of up to 2% of principal outstanding in case of fixed interest rate, while in case of floating rates, no prepayment charges are charged.</p><p>Unlike fixed interest rates, floating rates on home loans are variable and are prone to change over the home loan tenure owing to multiple factors. Basis the benchmark rate, which is linked to housing finance, floating rates on home loans rises or falls. Home loan applicants can opt for home loan rates when markets indicate a falling rate trend. Floating interest rates might not be suitable in the course of high market volatility because the risk linked with increasing rates exists and can lead to increased accumulation of interest over the time period. Based on suitability, home loan applicants can choose to shift from fixed to floating rates &amp; vice versa in the course of loan repayment tenure. However, remember that fixed interest rates are generally 1 to 2.5% higher as compared to the floating rates.&nbsp;</p><h2><strong>How to Calculate Interest Rate on Home Loans</strong></h2><p>There are 3 distinct ways that you can consider for calculating your home loan interest rate. Here, we will step by step mention each of the ways:&nbsp;</p><h4><strong>Using interest formula</strong></h4><p>It is a manual procedure of deriving home loan interest rate through a formula:&nbsp;</p><p>EMI=[P X R (1 + r) ^ n]/[(1 + r)^n-1]</p><p>Here, P stands for principal or the loan amount, r stands for interest rate, and n refers to loan tenure.&nbsp;</p><h4><strong>Using excel</strong></h4><p>Simpler option is to use MS excel to calculate EMIs through ‘PMT’ function:</p><p>= PMT(RATE,NPER,PV,FV,TYPE)</p><p>Rate here is the interest rate being offered, which is divided by 12, NPER refers to the number of EMIs, PV refers to the principal amount. Both TYPE and FV must have their values set to zero.</p><h4><strong>Using home loan EMI calculator</strong></h4><p>Usage of online EMI calculators is one of the simplest ways to guarantee an error-free outcome. Here is the step.</p><p>- Enter in your loan amount in the space marked as ‘Loan Amount’</p><p>- Put in the rate of interest offered to you</p><p>- Select the loan tenure under the loan tenure field</p><p>- Click on the calculate option for the result</p><h2><strong>Factors that Impact Home Loan Interest Rates and EMI</strong></h2><p>With a home loan's repayment tenure going up to thirty years, even a slight difference in the rates can result in an excessive difference in the entire home loan's interest cost. As lenders factor in various parameters when setting one's home loan rates, having a thorough understanding of these factors can help one avail a suitable deal with the lowest interest outgo.&nbsp;</p><p>Here, we will mention factors that determine one’s home loan interest rates:&nbsp;</p><h4><strong>Credit score</strong></h4><p>Most of the lenders factor in the credit scores of the home loan applicants when setting their rates. As the ones with an excellent credit score of 750 and above are looked at as creditworthy, lenders too try and entice them by offering lower rates on home loans. Likewise, as the ones with a low credit score of below 750 are generally looked upon as those lacking credit discipline, lenders make up for their higher involvement of credit risk by charging them with higher home loan rates.&nbsp;</p><p>Thus, ensure reviewing your credit report at least six months before you submit your application for a home loan. Doing this would give you adequate time to take corrective measures for improving your score. Also, it would assist you in identifying wrong information or clerical issues, if any, in your report, which is responsible for bringing down your score. On reporting such issues or incorrect information to the lender or bureau, the corrective report would automatically bring up your credit score.&nbsp;</p><h4><strong>Loan amount</strong></h4><p>Those opting for higher loan amounts infer higher credit risk on lenders' part. Hence, the lenders charge higher home loan rates from those opting for higher home loan amounts. For instance, the home loan rate of SBI on the loan amount of up to Rs 30 lakh begins from 6.70% p.a onwards while their rates for loan amount for over Rs 30 lakh and over Rs 75 lakh begin from 6.95% p.a. and 7.05% p.a., respectively. Thus, the applicants must try to make a higher down payment as this would allow them to avail of home loans at lower interest rates.&nbsp;</p><h4><strong>Type of interest rate</strong></h4><p>Home loan rates can be categorized into – fixed, floating and fixed rates. Floating rates usually fluctuate based on the changes in rate benchmark, which are adopted by the home loan lenders, while rates for fixed-rate home loans stay the same in the course of the whole repayment tenure. The home loan on mixed rate stays the same for a defined period, generally for a time period of two or three years, and after this, they change to floating interest rate home loans. As fixed and mixed rates come with higher rate risk for lenders, HFCs and banks usually charge higher rates on them from home loan borrowers for making up their losses in their interest income because of adverse change (if any) in the rate of interest regime.&nbsp;</p><h4><strong>LTV ratio</strong></h4><p>A home loan's loan to value ratio refers to the proportion of the property value, which is disbursed as a loan by lenders. Note that the rest of the amount requires to be funded through your own pocket as a down payment amount. As HFCs and banks require making higher provisions in case of home loans having higher LTV ratios, compensation for such increased provisioning is done by them by charging the borrower a higher interest rate on home loans with a higher LTV ratio. Thus, as a borrower of a home loan, you should make an effort to choose a lower LTV ratio to lower your interest outgo.&nbsp;</p><h4><strong>Job profile</strong></h4><p>Income sources of the home loan applicants are also considered by most HFCs and banks when setting their rate of interest. Usually, the salaried individuals are offered lower rates than those who are self-employed because of the existence of income certainty in the case of salaried. Among the salaried, PSUs and government employees are highly preferred because of the increased job stability and income certainty. After them, those working in large private companies or MNCs are generally given preference as such organizations are generally looked upon as stable with increased capability to bear economic uncertainties than other small private companies.</p><p>As lenders' credit risk appetite and their factors for fixing rates can differ widely, ensure to compare all the possible home loan options before you make your final decision. Begin by discussing with your banks or those lenders with whom you share long term existing relationships as they may offer you preferential interest rates on home loans. After this approach, online lending marketplaces strike a comparison of rates being offered by various other banks and HFCs based on your income, credit score, loan amount, job profile and LTV ratio. Your final home loan application should be with the one charging the lowest home loan rates for optimal loan tenure and home loan amount.&nbsp;</p><h3><strong>FAQs</strong></h3><h4><strong>✅Which bank home loan is best?&nbsp;</strong></h4><p>Lenders offering home loans of below 7% p.a are Punjab National Bank, State Bank of India, Bank of Baroda, Union Bank of India, Punjab &amp; Sind Bank, Central Bank of India, Bank of India, Canara Bank, UCO Bank, Bank of Maharashtra, IDBI Bank, Kotak Mahindra Bank, ICICI Bank, Axis Bank, LIC Housing, HDFC Ltd and Bajaj Finserv.</p><h4><strong>✅Which bank provides the lowest interest on a home loan?&nbsp;</strong></h4><p>Kotak Mahindra Bank and Punjab &amp; Sind Bank are providing the lowest interest rate that starts from 6.65% p.a. They are followed by lenders, like State Bank of India, Bank of Baroda, Union Bank of India, Punjab National Bank, Central Bank of India, Bank of India, Canara Bank, UCO Bank, Bank of Maharashtra, ICICI Bank, Axis Bank, LIC Housing, HDFC Ltd and Bajaj Finserv, all of them charging an interest rate of below 6.95% p.a.</p><h4><strong>✅How much is the lowest interest on a home loan?&nbsp;</strong></h4><p>Currently, the lowest home loan interest rate is 6.65% p.a. is offered by Punjab &amp; Sind Bank and Kotak Mahindra Bank.&nbsp;</p><h4><strong>✅Is availing a home loan a good idea?&nbsp;</strong></h4><p>Yes, taking a home loan is one of the best ways to meet one's goal of owning a house at an early age. As the cost of owning a home involves a big-ticket amount, it may not be possible for young earners or even those nearing their 40s to pay the whole home cost to purchase it. And accumulating huge funds for purchasing a home at the time of your retirement may not sound like an appealing idea. Thus, home loans are the best option one can depend on to buy a home during their working stage. Remember that the option of loan prepayment is always available in case of home loans, and there are no prepayment charges attached in case of floating rate home loans. Thus, one is always free to prepay their home loan whenever they get surplus funds to lower their interest cost burden.&nbsp;</p><h4><strong>✅Can I get a 100% home loan?&nbsp;</strong></h4><p>No, as RBI allows banks and HFCs to fund only up to 75 – 90% of the cost of the property as home loan amount, the applicants of home loan require bearing the remaining cost from their own pocket in the form of margin contribution or down payment.</p>

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What is the interest rate on home loans is one of the first questions that arises in the minds of those looking for availing home loans. Visit the page for more details

What is the Interest Rate on Home Loans in India? - MyMoneyMantra

<p>What is the interest rate on home loans is one of the first questions that arises in the minds of those looking for availing home loans.</p>

<h2><strong>What is Repo Linked Lending Rate (RLLR) Meaning?</strong></h2><p>From 1st October 2019 onwards, all the new floating retail loans interest rates like personal loans, education loans, car loans, home loans etc., sanctioned by the financial institutions got linked to the external benchmark wherein one of the benchmarks is the central bank's repo rate. Each and every bank has its own RLLR (RLLR full form – Repo Linked Lending Rate), which keeps differing every time the RBI revises its repo rate. Repo rate is the rate at which the financial institutions borrow from RBI. Central banks review the repo rates bi-monthly through their MPC or Monetary Policy Committee meeting.</p><h2><strong>What is RLLR Full Form &amp; RLLR Meaning?</strong></h2><p>Wondering what is RLLR meaning? As suggested by the name, RLLR full form is Repo Linked Lending Rate, which is linked with RBI's repo rate plus the bank's margin or spread.&nbsp;</p><p>RLLR = RBI’s repo rate + Margin/spread charged by the bank</p><p>Banks may address RLLR by other terms, even called EBLR (External Benchmark Linked Rate), RBLR (Revised Repo Rate Lending Rate) etc.</p><p>The margin or spread that the bank charges stays the same for all the loan applicants. However, based on the RBI circular, banks have the permission to charge their borrowers risk premium. The risk premium that the banks charge to the borrower is based on their risk analysis considering a particular applicant and differs from one applicant to another.&nbsp;</p><h2><strong>What is MCLR?</strong></h2><p>MCLR, also known as Marginal Cost of Funds Lending Rate, refers to a tenor based internal benchmark system that decides the rates of the loans. MCLR is the minimum rate used by banks to extend credit options to their customers. The introduction of this rate was done to enhance average revenue yielded by the banks through loan extension depending on the marginal cost of funds. It is calculated internally by the financial institutions based on 4 crucial components – CRR or Cash Reserve Ratio, Marginal Cost of Funds, Operating Costs and Tenure Premium.&nbsp;</p><p>Basis the above components, the formula for one year MCLR = Rate of interest offered by the bank on one-year term deposit + tenure premium + CRR + operating costs.&nbsp;</p><p>The banks set the MCLR for various tenures like overnight, one month, 3 months, 6 months etc. Note that the final MCLR based rate for a loan is determined by banks after they have considered the spread to MCLR based on the applicant's credit profile, loan tenure, loan amount etc.&nbsp;</p><h2><strong>MCLR vs RLLR</strong></h2><p>* MCLR is banks' internal benchmark where their own funds' cost decides their MCLR. However, RLLR is an external benchmark, wherein the bank's own funds cost does not have any impact directly when the repo rate rises or falls. RBI, in turn, is dependent on the repo rate. On every revision of RBI's repo rate, banks' RLLR gets affected. Repo rate cut lowers banks RLLR &amp; vice versa.</p><p>* MCLR's reset period is usually 12 months, whereas few lenders reset it every 6 months. Based on the reset period, the borrower's loan rate and their EMI have been revised accordingly. It gives time lag to the MCLR linked loans. But in the case of the RLLR linked loans, the reset period of rates is at least 3 months.</p><p>* In the situation of MCLR based loans, lenders are permitted to charge spread, margin or mark up. For instance, if the MCLR of a bank equals 7 %, then it might lend at 8 % after factoring in 100 basis points of mark upcharge. In the case of RLLR, the spread is based on the risk group of the applicants and the loan amount opted for.</p><h2><strong>Why is RLLR replacing MCLR?</strong></h2><p>RLLR based loans were introduced by RBI to make sure that the loan applicants have accessibility to a completely transparent benchmark. Quicker rate cuts transmission plays a major role among many applicants to opt for the RLLR option instead of MCLR.&nbsp;</p><p>Repo rate linked loans are not just available to the new applicants but also the existing loan borrowers. That is, if you are under the MCLR benchmark, you can opt to switch to RLLR. RBI has instructed the lenders to permit their borrowers to transition from MCLR to RLLR without incurring any additional margin or spread. But note that they might be charged with administrative fees based on the financial institution’s policy.&nbsp;</p><p>While the repo rate appears to be a good option for the existing borrowers, note that the final rate will be at the repo rate plus the margin or spread charged by the lenders. This means lenders may have an RLLR of 8%, wherein the repo rate is 4%, and their spread is 4%. Financial institutions are completely free to set their spread at differing margins for their borrowers based on their credit risk analysis.</p><h2><strong>How much do you expect to save on RLLR-linked loans?</strong></h2><p>To know how much you can save on your RLLR based loans compared to the MCLR linked loans, let us take an example of an IDBI car loan.&nbsp;</p><p>Car loan amount: Rs 5 lakh</p><p>Loan tenure: 5 years</p><p>IDBI MCLR 1 year: 7.65% and RLLR is 6.90%</p><p>Interest rate range for MCLR based car loan: 9.20% - 9.80%&nbsp;</p><p>Interest rate range for RLLR based car loan: 7.50% - 8.10%</p><figure class="table"><table><tbody><tr><td>EMI for MCLR based car loan</td><td>EMI for RLLR based car loan</td></tr><tr><td>Rs 10,428 – 10,574</td><td>Rs 10,019 – 10,162</td></tr></tbody></table></figure><p>Based on the above example, the burden of interest will be lower in the case of RLLR loans as compared to MCLR linked loans. Monthly instalments, too, would be relatively less for RLLR based loans. Thus, the amount that you save by opting for the RLLR linked loans can be get used for investment purposes or to meet any other financial needs.&nbsp;</p><h3><strong>FAQs</strong></h3><h4><strong>1) What is RLLR?</strong></h4><p>RLLR refers to an external benchmark. RLLR full form is Repo Linked Lending Rate. RLLR based loan interest rates get calculated on factoring in RBI's repo rate plus bank's margin plus borrower's credit risk spread.&nbsp;</p><h4><strong>2) What is better, MCLR or RLLR?</strong></h4><p>RLLR linked loans are better because of 2 major reasons:&nbsp;</p><p>* In the case of RLLR based loans, the interest burden on borrowers is lower than the MCLR based loans.</p><p>* Advantage of repo rate cut by the RBI is transferred immediately to the borrowers.</p><h4><strong>3) What is the RLLR of Canara Bank?</strong></h4><p>RLLR for Canara Bank currently is 6.90%.</p><h4><strong>4) What is RLLR in SBI?</strong></h4><p>EBLR for SBI currently is 6.65%.&nbsp;</p><h4><strong>5) What is PNB RLLR?</strong></h4><p>RLLR for PNB currently is 6.80%</p>

What is new Repo Linked Lending Rate (RLLR)?

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What is new Repo Linked Lending Rate (RLLR)? - Meaning, Details & Benefits. Repo rate linked Home loan.

What is Repo Linked Lending Rate (RLLR) Meaning?


<p>What is new Repo Linked Lending Rate (RLLR)? - Meaning, Details &amp; Benefits. Repo rate linked Home loan.&nbsp;</p>

<p>MCLR full form is the marginal cost of funds based lending rate, and it refers to the internal reference of the bank's fixed rate by RBI (Reserve Bank of India). It assists banks in defining the minimum rate on various credit types.&nbsp;</p><p>Banks are not permitted to lend to individuals below MCLR. Otherwise, they will witness stringent regulatory action. Only in exceptional cases they can lend their borrowers below MCLR with prior consent from RBI. Lending rates get determined based on the incremental or marginal cost of arranging every rupee for loan borrowers.&nbsp;</p><p>On 1st April 2016, RBI had replaced the system of the base rate used for determining rates with the MCLR system. Those borrowers who were provided loans before 1st April 2016&nbsp; are under base rate and BPLR (Benchmark Prime Lending Rate) rate and can choose to switch to the MCLR in case they consider it to be beneficial for them.&nbsp;</p><p>Here, in this article, we will provide answers to constantly googled questions regarding MCLR– what is MCLR, what is MCLR rate, MCLR meaning, MCLR full form, MCLR means etc. We will even list the difference between what is MCLR and what is a base rate.&nbsp;</p><h2><strong>MCLR Meaning</strong></h2><p>MCLR means a reference rate even called the internal benchmark for the banks, and MCLR full form is the marginal cost of funds based lending rate. MCLR defines the procedure, which is put into use for determining the minimum loan rate. MCLR was initially introduced in 2016 by the RBI. This system replaced the old base rate system, which was launched in 2010. Thus, the credit limit renewal and loan sanctioning both are performed based on the MCLR norms.&nbsp;</p><p>Note that MCLR is the lowest loan rate that any lender or bank can offer. Most of the banks cannot offer rates lower than MCLR. However, in exceptional cases, if permitted by the RBI, then only the lender can provide rates below MCLR.&nbsp;</p><h2><strong>What MCLR means in terms of a home loan?</strong></h2><p>MCLR is very closely related to the fund costs and repo rate of banks. Thus, in case there is any repo rate change, it even impacts the home loan's floating rate. If the bank pulls down the MCLR, the home loan's floating rate even comes down.&nbsp;</p><p>Guidelines by RBI about MCLR:</p><ul><li>Fixed interest rate home loans will not get impacted by the MCLR.</li><li>The deposit balance &amp; other borrowings are factored in when computing the fund’s marginal cost.</li><li>Banks should publish their MCLR for the different tenures.</li><li>MCLR, as mentioned on the date of sanction, will remain the same till the next reset date.</li></ul><h3>Current MCLR Rates for Top Banks</h3><figure class="table"><table><tbody><tr><td colspan="2">Banks</td><td colspan="2">Overnight (%)</td><td colspan="2">1 month (%)</td><td colspan="2">3 month (%)</td><td colspan="2">6 month (%)</td><td colspan="2">1 year (%)</td><td>2 years (%)</td><td colspan="2">3 years (%)</td></tr><tr><td colspan="2">State Bank of India</td><td colspan="2">6.65</td><td colspan="2">6.65</td><td colspan="2">6.65</td><td colspan="2">6.95</td><td colspan="2">7.00</td><td>7.20</td><td colspan="2">7.30</td></tr><tr><td colspan="2">HDFC Bank</td><td colspan="2">6.85</td><td colspan="2">6.90</td><td colspan="2">6.95</td><td colspan="2">7.05</td><td colspan="2">7.20</td><td>7.30</td><td colspan="2">7.40</td></tr><tr><td colspan="2">ICICI Bank</td><td colspan="2">7.00</td><td colspan="2">7.00</td><td colspan="2">7.05</td><td colspan="2">7.20</td><td colspan="2">7.25</td><td>-</td><td colspan="2">-</td></tr><tr><td colspan="2">Axis Bank</td><td colspan="2">7.15</td><td colspan="2">7.15</td><td colspan="2">7.25</td><td colspan="2">7.30</td><td colspan="2">7.35</td><td>7.45</td><td colspan="2">7.50</td></tr><tr><td colspan="2">Punjab National Bank</td><td colspan="2">6.65</td><td colspan="2">6.70</td><td colspan="2">6.80</td><td colspan="2">7.00</td><td colspan="2">7.30</td><td>-</td><td colspan="2">7.60</td></tr><tr><td colspan="2">Citibank</td><td colspan="2">5.55</td><td colspan="2">5.55</td><td colspan="2">5.65</td><td colspan="2">5.85</td><td colspan="2">6.00</td><td>-</td><td colspan="2">-</td></tr><tr><td colspan="2">IndusInd Bank</td><td colspan="2">8.15</td><td colspan="2">8.20</td><td colspan="2">8.30</td><td colspan="2">8.50</td><td colspan="2">8.60</td><td>8.90</td><td colspan="2">8.95</td></tr><tr><td colspan="2">RBL Bank</td><td colspan="2">7.75</td><td colspan="2">7.80</td><td colspan="2">7.85</td><td colspan="2">8.00</td><td colspan="2">8.45</td><td>-</td><td colspan="2">-</td></tr><tr><td colspan="2">Canara Bank</td><td colspan="2">6.70</td><td colspan="2">6.70</td><td colspan="2">6.95</td><td colspan="2">7.30</td><td colspan="2">7.35</td><td>-</td><td colspan="2">-</td></tr><tr><td colspan="2">IDFC First</td><td colspan="2">7.85</td><td colspan="2">7.85</td><td colspan="2">7.95</td><td colspan="2">8.10</td><td colspan="2">8.25</td><td>-</td><td colspan="2">-</td></tr><tr><td colspan="2">Bank of India</td><td colspan="2">6.65</td><td colspan="2">7.15</td><td colspan="2">7.20</td><td colspan="2">7.25</td><td colspan="2">7.30</td><td>-</td><td colspan="2">7.75</td></tr><tr><td colspan="2">Nainital Bank</td><td colspan="2">6.90</td><td colspan="2">6.90</td><td colspan="2">6.95</td><td colspan="2">7.05</td><td colspan="2">7.20</td><td>7.50</td><td colspan="2">8.00</td></tr><tr><td colspan="2">Jammu &amp; Kashmir Bank</td><td colspan="2">6.55</td><td colspan="2">6.65</td><td colspan="2">6.85</td><td colspan="2">7.15</td><td colspan="2">7.30</td><td>7.75</td><td colspan="2">7.80</td></tr><tr><td colspan="2">Bandhan Bank</td><td colspan="2">8.69</td><td colspan="2">8.74</td><td colspan="2">8.84</td><td colspan="2">8.97</td><td colspan="2">9.25</td><td>10.38</td><td colspan="2">10.93</td></tr><tr><td>Union Bank of India</td><td colspan="2">6.60</td><td colspan="2">6.65</td><td colspan="2">6.90</td><td colspan="2">7.05</td><td colspan="2">7.20</td><td colspan="3">7.25</td><td>7.25</td></tr><tr><td>UCO Bank</td><td colspan="2">6.70</td><td colspan="2">6.85</td><td colspan="2">6.95</td><td colspan="2">7.20</td><td colspan="2">7.30</td><td colspan="3">-</td><td>-</td></tr><tr><td>Punjab &amp; Sind Bank</td><td colspan="2">7.10</td><td colspan="2">7.15</td><td colspan="2">7.25</td><td colspan="2">7.40&nbsp;</td><td colspan="2">7.60</td><td colspan="3">-</td><td>-</td></tr><tr><td>Bank of Baroda</td><td colspan="2">6.55</td><td colspan="2">7.00</td><td colspan="2">7.10</td><td colspan="2">7.20</td><td colspan="2">7.35</td><td colspan="3">-</td><td>-</td></tr><tr><td>Federal Bank of India</td><td colspan="2">7.75</td><td colspan="2">7.85</td><td colspan="2">7.90</td><td colspan="2">7.95</td><td colspan="2">8.00</td><td colspan="3">-</td><td>-</td></tr><tr><td>IDBI Bank</td><td colspan="2">7.00</td><td colspan="2">7.05</td><td colspan="2">7.10</td><td colspan="2">7.30</td><td colspan="2">7.65</td><td colspan="3">8.10</td><td>8.60</td></tr><tr><td>Indian Overseas Bank</td><td colspan="2">6.90</td><td colspan="2">7.05</td><td colspan="2">7.15</td><td colspan="2">7.20</td><td colspan="2">7.30</td><td colspan="3">-</td><td>-</td></tr><tr><td colspan="15">As of 9th July 2021</td></tr></tbody></table></figure><h3><strong>Difference Between MCLR Rate and Base Rate</strong></h3><p>Both MCLR &amp; base rates offered by the lenders might seem similar at first glance. Both are based on similar principles &amp; are implemented with the same objective. But there are major factors that distinguish between MCLR and base rate.</p><p>Firstly, the base rate is based on the average funds cost, while MCLR is based on the marginal/incremental funds cost. Base rate is calculated by factoring in the minimum return rate or profit margin. However, MCLR gets calculated by factoring in the tenure premium. Operating costs and the costs required for maintaining the cash reserve ratio even governs the base rate. Repo rate, operating costs, deposit rates, and the expense incurred at maintaining the cash reserve ratio controls the MCLR.&nbsp;</p><h3><strong>How to Calculate MCLR Rate?</strong></h3><p>For calculating the MCLR, you should factor in all borrowing sources for financial institutions. Financial institutions borrow from numerous sources, which include current accounts, fixed deposits, savings accounts etc. The interest rate in such borrowing sources can be used by one for estimation of the marginal borrowing cost. Note that the source of a financial institution's fund is not just borrowing; it is even equity (infused or retained earnings). Hence, equity returns can even be expected.&nbsp;</p><p>The formula prescribed by RBI for MCLR calculation is –</p><p>MCLR = Marginal borrowing costX92 percent + net worth returnX8 percent</p><p>Banks should even maintain a 4% cash reserve ratio. Remember, in such deposits; zero interest gets earned by banks. As per MCLR, banks can take up a few allowances known as Negative Carry on the CRR. Moreover, operating expenses should be factored in and taken good care of. There are numerous costs of financial institutions that involve opening branches, raising funds, paying of salary to their staff, employees etc. Such expenses are not charged to the financial institution's customers. Lastly is the tenor premium or discount. The interest rate's reset is known as a tenor. This is directly proportional to the reset period; that is, the tenor is more if the reset period is more.&nbsp;</p><p>MCLR is based on:&nbsp;</p><ul><li>Operating cost of bank</li><li>Tenor premium</li><li>Marginal funds cost</li><li>Negative carry on the Cash Reserve Ratio</li></ul><p>As per the regulations by RBI, banks are supposed to issue their minimum loan interest rate or the MCLR for numerous tenures monthly. Such maturities/tenures involve overnight, 1 month, 3 months, 6 months, 1 year and other tenures which the bank might want to publish. You can figure out the MCLR of various banks by simply visiting their websites.&nbsp;</p><h3><strong>Why MCLR?</strong></h3><p>You may be wondering why did the central bank shift the banks to the MCLR system when the base rate/BPLR was working just fine? RBI was not pleased with the base rate system's effectiveness. This is the reason why RBI decided to shift banks to a new system where the borrowers &amp; the country's economy both can benefit.&nbsp;</p><p>RBI realized that the system of base rate wasn't sensitive in case of changes in any policy rates. And a change in policy rate is crucial for the right implementation of monetary policies. Note that there was zero uniform system prevalent in the country until the introduction of the MCLR system. All the financial institutions calculated the base rate basis numerous methodologies depending upon their discretion. While few used the average funds' costs, others employed the blended funds' cost &amp; marginal funds cost tactic.</p><p>One of the most crucial reasons why RBI shifted the banks to the MCLR system was to make sure swifter and simpler transmission of the policy rates into the banks' lending interest rates. Thus, MCLR was introduced because of the listed reasons:&nbsp;</p><ul><li>Enhance RBI policy rate transmission into the nation’s banking system</li><li>Ameliorate transparency in the system used by financial institutions to fix the loans' interest rates.&nbsp;</li><li>Make sure fairness in the credit rates for both the borrowers and banks.</li><li>&nbsp;Provide competitive benefits to the banks &amp; even boost their long term value and at the same time contribute to the nation’s economic growth.&nbsp;</li></ul><h3><strong>FAQs</strong></h3><h4><strong>✅What is MCLR?</strong></h4><p>MCLR means Marginal Cost of Funds Based Lending Rate. It is the minimum rate below which the banks cannot lend their borrowers except in specific situations.</p><h4><strong>✅What is the difference between MCLR and base rate?</strong></h4><p>MCLR is determined by the current incremental/marginal cost of funds, while average funds cost plays a crucial role in estimating the base rate. And the calculation of MCLR is done based on the tenor premium, wherein the tenor gets defined as the reset period for rates. Also, the tenor is directly proportional to the reset period, which means if the tenor increases, the reset period even increases. However, the base rate gets calculated by factoring in the return margin or minimum profit.&nbsp;</p><h4><strong>✅What is the purpose of MCLR introduced by RBI?</strong></h4><p>MCLR was introduced with the goal to ameliorate transmission of the policy rates into banks lending rates.</p><h4><strong>✅What is the MCLR of HDFC Bank?</strong></h4><p>HDFC bank’s current MCLR for overnight is 6.85%, 1 month is 6.90%, 3 months is 6.95%, 6 months is 7.05%, 1 year is 7.20%, 2 year is 7.30% and 3 year is 7.40%.</p><h4><strong>✅What is the current MCLR rate of ICICI?</strong></h4><p>ICICI bank's current MCLR for overnight is 7.00%, 1 month is 7.00%, 3 months is 7.05%, 6 months is 7.20%, and 1 year is 7.25%.&nbsp;</p>

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MCLR is the minimum interest rate that a bank can lend at. Let us understand what MCLR means and the recent developments in this space.

What is MCLR? A Complete Guide - MyMoneyMantra

<p>MCLR is the minimum interest rate that a bank can lend at. Let us understand what MCLR means and the recent developments in this space.</p>

<h2><strong>What is Home Loan?</strong></h2><p>For most, home loans are the sole means to fulfil their dream of owning a home owing to the involvement of big-ticket amounts. However, the initial obstacle towards approval of a home loan application is to meet certain eligibility criteria such as credit score, job profile, monthly income, employer's profile, EMI affordability, the title of the property, etc. Meeting such parameters can help enhance your home loan eligibility prospect.</p><p>Here in this article, we will discuss, what are home loans, what are the different types of home loans available in India, the benefits of availing of a home loan, and other crucial aspects of home loans.&nbsp;</p><h2><strong>What are Home Loans?</strong></h2><p>What are home loans, home loan meaning, what is home loan etc. are the general searched queries by the applicants looking for availing a home loan. Here, we have explained in detail - what is home<strong> </strong>loan?</p><p>A home loan is a credit option used by borrowers to fund their dream home. It is through home loans that individual borrowers can borrow a big-ticket amount from the financial institution at a specific rate of interest to be repaid in the form of EMIs for longer tenures extending up to 30 years. One can avail of financing through a home loan of up to 75-90% of the property's value basis of the loan amount. Note that a home loan is a secured loan wherein the home you purchase through loan is taken as security by the financial institution. In events of constant EMI defaults, lenders have the right to recover the loan amount through the sale of a house.&nbsp;</p><h2><strong>Types of Home Loans Available in India</strong></h2><p>Plot loan: Plot loans assist one to buy a plot of land for the construction of own residential home. However, the LTV ratio and the loan repayment tenures offered by few banks and the HFCs on plot loans are slightly lower as compared to their regular home loans.&nbsp;</p><p>Construction home loan: Construction home loan is provided to the ones who already hold a plot and need funds for funding the construction of their residential home property on the land. Though the LTV ratio, rate of interest and loan tenures for them are generally the same as regular home loans, few lenders might provide lower loan repayment tenures for construction home loans.&nbsp;</p><p>Rural housing loans: Such loans are looked at as specialized offerings that get extended to the home loan applicants from rural regions to mitigate their unique requirements.&nbsp;</p><p>Affordable housing loans: Affordable home loans are specifically aimed at the ones hailing from lower-income groups of society.&nbsp;</p><p>Home renovation/improvement loan: A home renovation/improvement loan is provided to the ones looking to either renovate or make some repairs to their existing homes. Most of the lenders offer such loans for shorter repayment tenures than regular home loans.&nbsp;</p><p>Bridge home loan: Bridge home loan is basically aimed at those home loan owners aspiring to enhance from their existing houses into new bigger sized houses at better locations. As such loan applicants might witness a short term liquidity crisis on account of the time lag between the sale of their existing home and purchase of their new home, bridge home loans are formulated to meet such fund mismatches. The maximum loan repayment tenure for such loans is 2 years for a ready property. However, for those properties under construction, maximum repayment tenure can go as high as 5 years.&nbsp;</p><p>NRI home loan: NRI home loans are offered to the NRIs, PIOs, OCIs to fund their construction/purchase of housing property in India.&nbsp;</p><p>Special loans for the government employees: Many of the lenders provide separate categories of home loans to their PSU and government employees at concessional rates and other better terms &amp; conditions.&nbsp;</p><h2><strong>Benefits of Home Loan</strong></h2><h3><strong>Tax benefits</strong></h3><p>One of the important benefits of availing of a home loan is an income tax deduction that you can claim on principal and interest repayments. One can claim up to Rs 1.5 lakh on the principal repayments under section 80 C and up to Rs 2 lakh on the interest repayments under section 24 B.<strong>&nbsp;</strong></p><h3><strong>Lower interest rate</strong></h3><p>Home loans owing to their secured nature, come at lower interest rates, with rates starting at just 6.65% p.a. onwards. Financial institutions offering lower home loan rates of 6.85% p.a are Punjab &amp; Sind Bank, Kotak Mahindra Bank, LIC Housing, Bank of Baroda, ICICI Bank, Union Bank of India and Punjab National Bank.&nbsp;</p><h3><strong>Long repayment tenure&nbsp;</strong></h3><p>Unlike other loans, home loans being a big-ticket loan, come with higher repayment tenure extending up to 30 years. Owing to their longer tenure availability, one has the freedom to opt for the loan tenure basis their repayment capacity.&nbsp;</p><h3><strong>Zero prepayment penalty</strong></h3><p>As RBI has disallowed lenders from charging prepayment/foreclosure charges on loans floating interest rates, home loans availed at floating rates do not attract any prepayment charges. Note that even for fixed-rate home loans, most lenders generally do not charge prepayment charges if loan prepayments are conducted from your own funds.</p><h3><strong>Availability of top-up home loan</strong></h3><p>Existing home loan borrowers become eligible to opt for top-up home loans. Note that such loans, similar to personal loans, allow their borrowers to use their loan proceeds for various big-ticket expenses like the home renovation or improvement, car purchase, personal travel, children's higher education, medical expenses etc. Thus, there is no restriction on top-up home loan's fund usage except if used for any speculative reason. The absence of restriction on top-up home loan's fund usage makes them an alternative to loans like personal loans &amp; loans against credit cards.&nbsp;</p><p>Also, note that such loans come at lower interest rates, which are just slightly higher than the underlying home loan interest rate with longer tenures that depend on the underlying home loan's residual tenure. Lower interest rates clubbed with longer tenures make top-up home loans the cheapest options for the existing home loan borrowers as compared to their alternatives like personal loans or loans against credit cards.&nbsp;</p><h2><strong>Best Home Loan Interest Rates 2021</strong></h2><figure class="table"><table><tbody><tr><td colspan="4">Home loan interest rate (%)&nbsp;</td></tr><tr><td rowspan="2">Name of Lender</td><td colspan="3">Loan Amount (Rs)&nbsp;</td></tr><tr><td>Up to Rs 30 lakh</td><td>Above Rs 30 lakh &amp; up to Rs 75 lakh&nbsp;</td><td>Above Rs 75 lakh</td></tr><tr><td colspan="4">Public Sector Banks</td></tr><tr><td>Punjab &amp; Sind Bank</td><td>6.65-7.60</td><td>6.65-7.60</td><td>6.65-7.60</td></tr><tr><td>State Bank of India</td><td>6.70-7.50</td><td>6.95-7.65</td><td>7.05-7.75</td></tr><tr><td>Bank of Baroda</td><td>6.75-8.35</td><td>6.75-8.35</td><td>6.75-8.60</td></tr><tr><td>Union Bank of India</td><td>6.80-7.60</td><td>6.90-7.65</td><td>6.90-7.65</td></tr><tr><td>Punjab National Bank</td><td>6.80-7.75</td><td>6.80-7.90</td><td>6.80-8.00</td></tr><tr><td>Central Bank of India</td><td>6.85-7.30</td><td>6.85-7.30</td><td>6.85-7.30</td></tr><tr><td>Bank of India</td><td>6.85-8.35</td><td>6.85-8.35</td><td>6.85-8.35</td></tr><tr><td>Canara Bank</td><td>6.90-8.90</td><td>6.90-8.90</td><td>6.90-8.90</td></tr><tr><td>UCO Bank</td><td>6.90-7.25</td><td>6.90-7.25</td><td>6.90-7.25</td></tr><tr><td>Bank of Maharashtra</td><td>6.90-8.05</td><td>6.90-8.40</td><td>6.90-8.40</td></tr><tr><td>IDBI Bank*</td><td>6.95-10.05</td><td>6.95-10.05</td><td>6.95-10.05</td></tr><tr><td>Indian Bank**</td><td>7.00-7.25</td><td>7.10-7.35</td><td>7.20-7.40</td></tr><tr><td>Indian Overseas Bank</td><td>7.05</td><td>7.15</td><td>7.30</td></tr><tr><td colspan="4">Private Sector Banks</td></tr><tr><td>Kotak Mahindra Bank ^</td><td>6.65-7.30</td><td>6.65-7.30</td><td>6.65-7.30</td></tr><tr><td>ICICI&nbsp;Bank ^^</td><td>6.75-7.30</td><td>6.75-7.45</td><td>7.10-7.55</td></tr><tr><td>Axis&nbsp;Bank</td><td>6.90-11.50</td><td>6.90-11.50</td><td>6.90-8.55</td></tr><tr><td>HSBC Bank^^^</td><td>7.20-7.75</td><td>7.20-7.75</td><td>7.20-7.75</td></tr><tr><td>Karur Vysya Bank</td><td>7.35-9.55</td><td>7.35-9.55</td><td>7.35-9.55</td></tr><tr><td>Karnataka Bank</td><td>7.50-8.75</td><td>7.50-8.75</td><td>7.50-8.85</td></tr><tr><td>Federal Bank</td><td>7.65-7.70</td><td>7.70-7.75</td><td>7.75-7.80</td></tr><tr><td>Dhanlaxmi Bank</td><td>7.85-9.00</td><td>7.85-9.00</td><td>7.85-9.00</td></tr><tr><td>South Indian Bank</td><td>7.95-9.45</td><td>7.95-9.45</td><td>7.95-9.45</td></tr><tr><td>Tamilnad Mercantile Bank</td><td>8.25</td><td>8.25</td><td>8.25</td></tr><tr><td><p>Bandhan Bank</p><p>(GRUH Home Loan)</p></td><td>8.50-11.75</td><td>8.50-11.25</td><td>8.75-11.25</td></tr><tr><td>RBL Bank</td><td>10.20-12.80</td><td>10.20-10.70</td><td>9.50-10.00</td></tr><tr><td colspan="4">Housing Finance Companies (HFCs)</td></tr><tr><td>LIC&nbsp;Housing</td><td>6.66-7.85</td><td>6.66-8.05</td><td>6.90-8.05</td></tr><tr><td>HDFC&nbsp;Ltd.***</td><td>6.75-7.45</td><td>7.00-7.70</td><td>7.10-7.80</td></tr><tr><td>Bajaj Finserv</td><td>6.75-8.50</td><td>6.75-8.50</td><td>6.75-8.50</td></tr><tr><td>Tata Capital</td><td>&gt;=6.90</td><td>&gt;=6.90</td><td>&gt;=6.90</td></tr><tr><td>PNB Housing</td><td>7.35-9.35</td><td>7.35-9.55</td><td>7.70-9.55</td></tr><tr><td>GIC Housing Finance</td><td>&gt;=7.45</td><td>&gt;=7.45</td><td>&gt;=7.45</td></tr><tr><td>Repco Home Finance</td><td>&gt;=7.75</td><td>&gt;=7.75</td><td>&gt;=7.75</td></tr><tr><td>Indiabulls Housing</td><td>&gt;=8.65</td><td>&gt;=8.65</td><td>&gt;=8.65</td></tr><tr><td>Aditya Birla Capital</td><td>9.00-12.50</td><td>9.00-12.50</td><td>9.00-12.50</td></tr><tr><td>Reliance Home Finance</td><td>9.75-13.00</td><td>9.75-13.00</td><td>9.75-11.00</td></tr><tr><td colspan="4">*10 bps concession for women borrowers under limited period offer. Conditions apply.&nbsp;</td></tr><tr><td colspan="4">**Interest rate of 6.85%-7.00% p.a. offered under IND AWAS Scheme&nbsp;</td></tr><tr><td colspan="4">^ Special HLBT rates starting at 6.65% p.a. for any loan amount.&nbsp;</td></tr><tr><td colspan="4">^^ HLBT interest rate range of 6.75%-7.55% p.a. for any loan amount, with repayment from ICICI Bank Account&nbsp;</td></tr><tr><td colspan="4">^^^ HLBT offered at an interest rate of 6.64% p.a.&nbsp;</td></tr><tr><td colspan="4">***Special interest rates available under limited period offer. Valid for disbursements availed on or before 30th September 2021&nbsp;</td></tr><tr><td colspan="4"><i>Rates as of 13th July 2021&nbsp;</i></td></tr></tbody></table></figure><h2><strong>Eligibility Criteria</strong></h2><p>Financial institutions check on various parameters before approving your home loan application. The initial thing that lenders evaluate is one's credit report to understand their past repayment history and know their score. Usually, a credit score equalling 750 and above is preferred by home loan lenders. Other factors that lenders take into consideration are:&nbsp;</p><p>* Age</p><p>* Annual income</p><p>* Employment type</p><p>* Margin requirement</p><h2><strong>Documents Required</strong></h2><p>Listed below are the main documents that are required for applying for a home loan:&nbsp;</p><p>* Identity and residential proof</p><p>* Past 6 months bank statement</p><p>* Processing fee cheque</p><p>* Recent salary slip</p><p>* Form 16</p><h2><strong>Home Loan EMI Calculator</strong></h2><p>Remember, EMIs depend on the loan amount, interest rate and loan tenure. Though higher EMI results in shorter loan tenure &amp; lower interest amount, lower EMI results in longer repayment tenures &amp; higher interest amount. Thus, the home loan applicant must take the help of online home loan calculators for finding the optimum EMI basis for their repayment capacity. Such home loan applicants should even ensure to factor their insurance premiums, unavoidable monthly expenses, etc., to know their optimum home loan EMIs. Filling up the application for a home loan after having knowledge about the optimum EMI will lower one's chances of any EMI default owing to aggressive payment schedules.&nbsp;</p><h2><strong>How to Apply for a Best Home Loan Option in India?</strong></h2><p>Owing to the advancement in technology, most lenders have come up with their own respective online platforms where applicants can easily apply for a home loan with all required documents. Also, those looking to visit their bank branch can even consider visiting the bank to inquire regarding various available home loan options.&nbsp;</p><p>Once you submit your home loan application, the lender begins with their loan processing evaluation, where they first check your credit report, and then your income, employer's profile, job profile, EMI affordability etc., to decide whether to approve or turn down the loan application for home.&nbsp;</p><h3><strong>FAQs</strong></h3><h4><strong>What is home loan?</strong></h4><p>A home loan is a secured loan availed by those looking to buy a home. Through home loans, one can borrow the big-ticket amount from banks/HFCs at a particular interest rate, which is repaid in the form of EMIs for tenures going up to 30 years.&nbsp;</p><h4><strong>What is home loan and its types?</strong></h4><p>A home loan is a credit option availed by individuals to finance their dream home. Various types of home loans are plot loans, construction home loans, rural housing loans, home loan renovation/improvement loans, bridge home loans, NRI home loans, and special loans for government employees.&nbsp;</p><h4><strong>What is EMI for a 20 lakh home loan?</strong></h4><p>For a home loan amount of Rs 20 lakh available at 30 years repayment tenure at an home loan interest rate of 6.75% p.a., the EMI would be Rs 12,972. If the tenure reduces to 20 years with all loan components remaining the same, the EMI would be Rs 15,207.&nbsp;</p><h4><strong>What should I consider before applying for a home loan?</strong></h4><p>Before availing of a home loan, you should consider checking the listed:&nbsp;</p><p>* Ensure your credit score is good, i.e. 750 or above</p><p>* Make sure you have accumulated adequate corpus for your home loan down payment</p><p>* Ensure your monthly loan repayment obligation, including the new home loan EMI is within 50% of your monthly income</p><p>* Make sure to include your expected home loan EMI into your contingency fund.</p><h4><strong>Can I pre-close my home loan?</strong></h4><p>Yes, home loan borrowers can prepay whenever they get sufficient surpluses without bearing any prepayment charges in case of floating home loan interest rate. However, note that your home loan prepayment should not be at the cost of your emergency fund or crucial financial goals.&nbsp;&nbsp;</p>

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Know about Home Loan, Types of Home Loans in India, Definition of Housing Loan etc. ✔ Check Eligibility ✔ Calculate EMI ✔ Apply for Home Loan Online

What is Home Loan, Types, Benefits and Eligibility - MyMoney Mantra


<p>Know about Home Loan, Types of Home Loans in India, Definition of Housing Loan etc. ✔ Check Eligibility ✔ Calculate EMI ✔ Apply for Home Loan Online</p>

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