Dhanlaxmi Bank

Home Loan Interest Rates

Get home loan up to Rs. 2.5 Crores from Dhanlaxmi Bank with minimal documentation. The borrowed amount can be repaid in maximum repayment tenure of up to 20 years. Dhanlaxmi Bank home loan interest rates vary from 7.85% to 9% p.a.


Dhanlaxmi Bank Home Loan Details

Dhanlaxmi Bank offers all kinds of banking services from personal banking to corporate banking. As a Kerala-based bank, Dhanlaxmi Bank is a preferred on for NRI banking, as well. It has a well-formulated micro and agricultural banking segment, as well. The bank is in the forefront in lending to SME units in Kerala and other adjoining states. Besides, Dhanlaxmi Bank has one of the best Home Loan products available among private banks.

Dhanlaxmi Bank Home Loan is a versatile product that caters to all requirements of housing. It covers construction or homes to purchase of readymade units. Loans are also available for repairs, renovations, and refurbishments. The bank is also a frontrunner in lending to PMAY beneficiaries, especially in the states of Kerala and Tamil Nadu.

Dhanlaxmi Bank Home Loan - Exciting Features and Benefits


  • Purchase of new/second-hand houses or flats
  • Construction of house/flat
  • Purchase of residential plot
  • Repairs and renovations to existing home

Quantum of Loan

The maximum loan amount available at Dhanlaxmi Bank is 2.50 Crores depending on the eligibility criteria. The maximum amount applicable to a plot loan is 50 Lakhs. The factors that affect the quantum of a Home Loan at Dhanlaxmi Bank are.

  • 85% of the cost of construction or purchase of a new house
  • 75% of the purchase cost in the case of residential plots
  • 75% for repairs and renovations of existing dwellings

Target Group

  • Salaried employees and self-employed individuals/professionals including agriculturists and NRIs having a minimum annual income of 1.20 Lakhs

Eligibility Criteria

  • The loan should be repaid entirely before the borrower attains the age of 60 years

Repayment tenure

  • The maximum tenure of the Home Loan is 20 years including the moratorium period

Additional Info: Also check DDA Housing Scheme

Dhanlaxmi Bank Home Loan Interest Rates

Dhanlaxmi Bank bases its Home Loan interest rates on the MCLR of the bank. The MCLR concept is in force in Dhanlaxmi Bank since April 01, 2016. As per Reserve Bank of India norms, Dhanlaxmi Bank revises its MCLR every month and publishes the same on its website. The latest such revision is with effect from September 01, 2019.


The Home Loan interest rates link to the one-year MCLR of the bank.

Home Loan ProductMCLR spreadEffective Interest Rate
Dhanam Home Loan1Y-MCLR + 0% to 1Y-MCLR + 0%9.80%

Before April 2016, Dhanlaxmi Bank used to base its interest rates according to its Base Rate Structure. This structure was valid from July 01, 2010. The Benchmark Prime Lending Rate structure was in force before July 2010.

Dhanlaxmi Bank announces its Base rate and BPLR at regular intervals. The last such revision was as follows:

  • Base Rate of Dhanlaxmi Bank is 11.35% w.e.f. December 01, 2018
  • BPLR of Dhanlaxmi Bank is 21% w.e.f. November 02, 2011.

The MCLR Concept

The Base Rate concept linked to the market rates indirectly. However, RBI felt that the customers were not getting the benefit of market rate fluctuations, especially when the rates go down. Therefore, they came up with a new concept known as the Marginal Cost of Funds based Lending Rate. This MCLR concept was introduced in the entire banking industry from April 01, 2016. The MCLR concept comprised of various factors, both internal and external.

  • Marginal cost of funds
  • Negative CRR carry
  • Operating costs
  • Tenor premium

The banks switched over to this concept by adding a spread over the MCLR when quoting the interest rates for the individual products. The factors influencing the range were the credit rating of the borrower and the loan tenure. Any change in the MCLR affects the interest rates on the loans.

Dhanlaxmi Bank announces its MCLR monthly, but the rates are offered to new loans sanctioned or disbursed from that date. The existing loans come with a reset clause.

The resetting of the MCLR takes place at regular intervals. Some banks have a monthly reset, whereas some have a quarterly reset. The interest rates on individual accounts will change only with the resetting of the MCLR corresponding to the particular loan account.

Dhanlaxmi Bank Home Loan Interest Rate - Points to Note

  • The effective rates of interest on the Home Loan are linked with the 1Y-MCLR
  • These rates apply to new loans sanctioned from the date of announcement of the MCLR. In this case, it is September 01, 2019.
  • Existing Home Loans will continue with their contracted rate until the next resetting or review date.
  • Dhanlaxmi Bank offers a floating rate of interest on Home Loans

Dhanlaxmi Bank Home Loan Service Charges

Nature of feesAmount
Processing fees1% of the loan amount with a minimum of 10,000
Non-refundable fee payable with the application

Up to 20 Lakhs: 3,500

Above 20 Lakhs: 5,000

Cheque bouncing charges 500 per occasion
Late payment fees3% per month on the default amount
Cheque swapping charges 500 per instance
NOC issuance
  •  500 for the second NOC onwards
  • No charges for the first NOC
Document retrieval charges 500
Change in the EMI cycle 500
Foreclosure statement charges 200
Switching fees (from floating to fixed and vice versa)3% of the outstanding amount
Part prepayment charges
  • Up to 6 months: No part prepayment allowed
  • After 6 months: Minimum of 50,000 and a maximum of 25% of the loan amount outstanding at the commencement of the year.
  • Only 1 prepayment is allowed in a year
Foreclosure chargesNil
Stamp duty on documentsDepends on State Laws

Additional Info: Also check Sukanya Samriddhi Yojana

Dhanlaxmi Bank Home Loan Interest Calculation and Repayment

Dhanlaxmi Bank charges interest every month on the daily reducing balances. Thus, the best method of repayment is EMI. However, agriculturists having seasonal income can opt for equated quarterly or equated half-yearly instalments.


Mode of Repayment

Dhanlaxmi Bank customers

  • Post-dated cheques from their savings or current accounts
  • Standing Instruction to debit the account for recovery of home loan EMI
  • Internet banking or mobile banking transfer
  • Pay cash at Dhanlaxmi Bank counter

Other Bank customers

  • Post-dated cheques
  • ECS mandates
  • Funds transfer via internet/mobile banking
  • Funds transfer from their bank branch
  • Pay cash at Dhanlaxmi bank counter

Dhanlaxmi Bank Home Loan - Calculation of EMI

Dhanlaxmi Bank offers the EMI Calculator feature to help customers calculate their Home Loan EMI. Access the application and submit the information like loan amount, rate of interest, and repayment period to get your EMI.


MyMoneyMantra has a similar EMI calculator on its webpage.

Dhanlaxmi Bank Home Loan - Different Ways to Apply for a Home Loan

Apply online

  • Access the official page of Dhanlaxmi Bank
  • Click on the Apply Now option
  • Complete the form and submit it online
  • Dhanlaxmi Bank loan officials will contact you to complete the formalities

Apply through MyMoneyMantra

MyMoneyMantra offers a similar facility whereby you can apply for Dhanlaxmi Bank Home Loan. The advantages of applying through MyMoneyMantra are as follows:

  • Compare various Home Loan products on a single screen
  • Get advice from MyMoneyMantra Home Loan counsellors
  • These services are available free of cost

Additional Info: Also check Home Renovation Loan

Dhanlaxmi Bank Home Loan - PMAY

Dhanlaxmi Bank has a strong presence in the southern states of Kerala and adjoining Tamil Nadu. It has many branches in the smaller towns, thereby making it an ideal bank for PMAY. Dhanlaxmi Bank has HUDCO as its Chief Nodal Agency. The bank applies to HUDCO for the approval and disbursement of interest subsidy.

PMAY beneficiaries are eligible for upfront interest subsidy. The amount of grant depends on different factors:

  • Category of borrower
  • Maximum loan amount eligible for a subsidy
  • Maximum eligible subsidy
Category of borrowerEconomically Weaker Section EWSLow-Income Group - LIGMiddle-Income Group-I MIG-IMiddle-Income Group-II MIG-II
Annual family income ceiling 3 Lakhs 6 Lakhs 12 Lakhs 18 Lakhs
Loan amount eligible for subsidy 6 Lakhs 6 Lakhs 9 Lakhs 12 Lakhs
Rate of subsidy6.50%6.50%4%3%
Amount of subsidy 2.67 Lakhs 2.67 Lakhs 2.35 Lakhs 2.30 Lakhs

Points to note

  • PMAY subsidy is upfront interest subsidy
  • It is credited to the Home Loan forthwith
  • Upfront credit of support reduces the loan EMI for the borrower
  • It is calculated using the NPV formula
  • The notional rate of interest is 9% for 20 years
  • Loan amount over the eligible amount for subsidy is an unsubsidised loan
  • Foreclosure of the loan before 20 years involves a refund of the corresponding value of the grant

Best Value Home Loans

MyMoneyMantra is India’s largest phygital loan distributor. With trust of 70 lakh customers, we assure hassle free access to the best Home Loans up to 10 crore for housing loan borrowers in India. Our service is 100% free. We use latest technology and AI to serve customers across the length & breadth of our diverse country. Check Eligibility & Apply.

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Dhanlaxmi Bank Home Loan Interest Rates FAQs

Can a customer switch over from the Base Rate or BPLR structure to the MCLR concept and vice versa?


Switching over from the Base Rate or BPLR to MCLR is permissible on the payment of a conversion fee. However, the bank does not allow switching of loans from the MCLR to the Base Rate concept.

Is there a fixed rate of interest Home Loan concept in Dhanlaxmi Bank?


In the MCLR structure, there is no fixed-rate concept of Home Loans. However, there could be borrowers who might have availed the fixed rate of interest Home Loans in the Base Rate structure. Such persons can switch over to a floating rate of interest by paying a switch-over fee.

What are the advantages of adopting a floating rate of interest on Home Loans?


The floating rate of interest on Home Loans is linked to the MCLR of the bank. The MCLR, in turn, is a market-related rate. The MCLR moves along with the market rates. Thus, Home Loan interest rates move accordingly, as well. Any reduction in the MCLR can bring benefits to the customer by way of a reduction in the Home Loan interest rate. Secondly, Dhanlaxmi Bank does not charge any foreclosure penalty on Home Loan accounts with floating rates of interest.

If MCLR were such a practical concept, why did the RBI announce the linking of rates to an external benchmark rate?


RBI noticed that banks were not prompt in passing over the benefits of rate fluctuations to its customers. It defeated the very purpose of having a market related rate concept. Banks also had the compulsions. The MCLR concept is a tedious one, as well.

Hence, RBI came up with a simple formula whereby banks could link to any of the following external benchmark rates:

  • Repo rate announced by RBI
  • T-bill rate published by FBIL daily
  • Any other benchmark rate published by FBIL

Which of these three rates is the best option for banks?


Citibank has opted for the 3M T-bill rate announced by FBIL as its benchmark rate. SBI and other commercial banks in India have adopted the repo rate. Compared to the T-bill rate that could fluctuate almost daily, the repo rate is a better option. The Reserve Bank of India announces these repo rates from time to time.

How do banks calculate the repo rate linked lending rates?


The repo rates announced by the RBI is the external benchmark rate for the banks switching over to RLLR. RLLR has two components.

  • Repo rate
  • The average net interest margin of the bank for the last ten years rounded off to the nearest' five basis points.'

The bank further adds a spread to the RLLR. This interest spread depends on factors like,

  • Credit rating of the borrower
  • LTV ratio

How does the RLLR benefit the customer?


The Reserve Bank alters the repo rate at regular intervals. With every change in the repo rate, the RLLR of the bank changes. The banks reset the RLLR-linked rates on the first day of the month following the change announced by the RBI. Any reduction in the repo rate benefits the borrower as he/she gets the effect immediately.

How is the RLLR beneficial to the MCLR?


RLLR is a simple calculation that does not have many variables. The spread over the RLLR remains constant for the borrower unless there is a drastic change in the credit ratings. The net interest margin also does not fluctuate much. Hence, the interest rate for the borrower directly links to the repo rate. RBI publicly announces the repo rates. Therefore, borrowers can calculate the benefits/drawbacks almost immediately.

The MCLR also links to an external benchmark rate. However, the calculations are tedious. They do not have any transparency either. The borrower cannot understand the fluctuations in the MCLR as easily as he/she can in the case of RLLR.

Has Dhanlaxmi Bank shifted to the RLLR?


No, Dhanlaxmi Bank has not switched over to the RLLR method of calculating the Home Loan interest rate. However, they could do so soon.

Under such circumstances, will borrowers in the existing MCLR regime get an opportunity to shift to the RLLR structure?


Initially, the banks offer RLLR to new customers alone. Secondly, the concept is in its infancy today. However, banks will provide an opportunity for borrowers to switch over to the MCLR sometime in the future.