FAQ

A home loan is a type of secured loan offered by banks and financial institutions, which enables you to borrow funds to purchase, construct, renovate, or extend a home. The property itself serves as security or collateral until the loan is repaid in full.

– The lender gives you a lump sum amount (up to 75%-90% of the property value) based on your eligibility.
– You repay this amount, plus applicable interest, in regular monthly installments called EMIs (Equated Monthly Installments) over a selected tenure (often up to 20–30 years).
– If you fail to repay, the lender can take possession of the property.

– Home Purchase Loan: For buying a ready or under-construction property.
– Home Construction Loan: For building a house on your own plot/land.
– Home Renovation/Improvement Loan: For repairs, refurbishments, or modifications to your existing home.
– Home Extension Loan: For expanding or adding new rooms, floors.
– Plot/Land Purchase Loan: For purchasing land to build a house.
– Home Loan Balance Transfer: To shift your loan to another lender offering better interest rates.
– Top-Up Home Loan: Availing extra funds over existing loan.
– Fixed-Rate/Floating/Hybrid Loans: Interest rate can be fixed, variable (floating), or partly both.

The amount of home loan you can afford depends on your:
– Income and employment stability
– Existing financial obligations
– Credit (CIBIL) score
– Age and repayment tenure desired
– Generally, banks cap your EMI at 50–60% of your net monthly income.

– Interest is usually calculated using the reducing balance method: Interest is charged on the outstanding principal each month after EMIs are paid.
– Formula for monthly interest: (Outstanding principal × interest rate per month).

– EMI is calculated using this formula:
$$
EMI = \frac{P \times r \times (1 + r)^n}{(1 + r)^n – 1}
$$
– P = Principal loan amount
– r = Monthly interest rate (annual rate ÷ 12 ÷ 100)
– n = Loan tenure in months

– Compare interest rates, processing fees, customer reviews, flexibility (part-prepayment/foreclosure rules), tenure, and services.
– Go with reputed lenders offering transparency, quick processing, and low rates.

– Home Loan: Specifically for buying, constructing, or improving a home.
– Mortgage Loan (Loan against Property): You pledge property for any purpose (e.g., business, education, medical); not restricted to housing.

– Interest rates differ by lender and whether the rate is fixed, floating, or hybrid.
– SBI and other major banks often have the most competitive rates in India. Check updated rates directly on their websites or use comparison tools.

Most bank websites offer free online EMI calculators. Input your loan amount, tenure, and interest rate to check monthly EMI.

Main requirements:
– Identity, age, address, and income proof
– Property papers (sale agreement, allotment letter, title deeds)
– Bank statements
– Salary slips/IT returns/Form 16

Factors usually considered:
– Applicant’s age (usually 21–65 years)
– Employment or business continuity
– Regular income
– Good credit score (usually 725+)
– Property value and legal status.