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More About Home Loan

Types of Home Loan

  1. Home Purchase Loan: For the purpose of purchase of a house.
  2. Home Construction Loan: For the purpose of self-construction of a residential home.
  3. Land Purchase Loans/Plot Loans: For the purpose of purchase of a plot of land for construction or as an investment.
  4. Home Extension Loan: For the purpose of add more space to your existing home.
  5. Home Improvement Loan: For the purpose of internal or external repairs, waterproofing, electrical works, painting, roofing, plumbing, etc.
  6. Residential Plot Loan: For the purchase of a residential plot of land in an urban area, and build your house subsequently.

Charges associated with Home Loan

  • Processing Fees
  • Part Prepayment Fees
  • Penalty for delayed payment
  • Cheque / Repayment Mode swap charges
  • Cheque / ECS dishonour Charges, per transaction
  • Conversion charges

Equated Monthly Instalment (EMI)

EMI is the amount you will pay to bank on a specific date each month till the loan is repaid in full.

The EMI comprises of the principal and interest components. These components are designed in such a way that the interest component is much larger than the principal component during the initial years of your loan, while the principal component is much larger than the interest component during the later years of the loan.

You can use our EMI calculator to find out your monthly payments based on the loan amount, the rate of interest and the repayment period.

Interest Charge

Majorly, 2 types of interest rate offered on home loans, which are-

Fixed Interest Rate- Fixed rate of interest means the rate of interest remains unchanged for some initial years but not during the entire duration of the loan. This means one does not benefit even if home loan interest rates drop in the market during the tenure of his/her loan. It provides safety from Fluctuations for a predetermined period of time. The fixed rate remains fixed only for initial 3 year to 10 year terms, after that the interest rate automatically gets converted into the floating rate prevailing at that time.

Floating Interest Rate- Floating rate of interest fluctuates with the market lending rate. This means one has the risk of paying more than he/she budgeted for, in case the lending rate goes up. One needs to pay lower EMI when rates fall.

It depends upon the borrower to decide which option to choose based on what suits him/her the best.

Down Payment (Margin)

When you buy any house property, banks extend home loan of around 70% to 80% of the property's value. The balance amount has to be arranged by the borrower himself. Down Payment is a fraction of the value of your home that you have to pay on your own i.e. out of your own pocket and rest of the amount is funded as home loan by the lender. Down payment is indispensable for a home loan. For example, suppose if you buy a house worth Rs. 50 lakhs and bank approves a home loan of Rs 40 lakhs which is 80% of the value of the property so you need to pay remaining 20% as the down payment (margin) on your own.

Loan Offer Letter

When your loan is sanctioned, you will get a loan offer letter comprising following details:

  • Sanctioned Loan Amount
  • Rate of Interest
  • Type of Interest: Fixed/ Floating
  • Loan Tenure
  • Equated Monthly Instalment (EMI)
  • Other terms of the loan

This is an important legal document that sets out the conditions. This letter is issued after the home loan approval process is completed by the lender and prior to you getting the final home loan agreement. This letter does not mean that you got the loan. It only states that the lender is ready to approve your loan application.

Find Banks Home Loan Interest Rates

Abhyudaya Cooperative Bank LimitedAhmedabad Mercantile Cooperative Bank
Akola Urban Coop Bank Allahabad Bank
Allahabad Up Gramin BankAmanath Cooperative Bank Ltd. Bangalore
Andhra BankAndhra Pradesh Grameena Vikas Bank
Andhra Pragathi Grameena BankApna Sahakari Bank Limited
Arunachal Pradesh Rural BankAssam Gramin Vikash Bank
Au Small Finance Bank LimitedAxis Bank
Bandhan Bank LimitedBangiya Gramin Vikash Bank
Bank Of BarodaBank Of India
Bank Of MaharashtraBaroda Gujarat Gramin Bank
Baroda Rajasthan Kshetriya Gramin BankBaroda Up Gramin Bank
Bassein Catholic Cooperative Bank LimitedBharat Cooperative Bank (mumbai) Ltd., Mumbai
Bharati Sahakari BankBharatiya Mahila Bank Limited
Bihar Gramin BankBombay Mercantile Co Op Bank Ltd
Canara BankCapital Small Finance Bank Limited
Catholic Syrian Bank LimitedCentral Bank Of India
Central Madhya Pradesh Gramin BankChaitanya Godavari Grameena Bank
Chhattisgarh Rajya Gramin BankCitizen Credit Cooperative Bank Limited
City Union Bank LimitedCorporation Bank
Dcb Bank LimitedDena Bank
Dena Gujarat Gramin BankDhanalakshmi Bank
Dombivli Nagari Sahakari Bank LimitedEllaquai Dehati Bank
Equitas Small Finance Bank LimitedEsaf Small Finance Bank Limited
Export Import Bank Of IndiaFederal Bank
Fincare Small Finance Bank LtdG P Parsik Bank
Gramin Bank Of AryavartHdfc Bank
Himachal Pradesh Gramin BankIcici Bank Limited
Idbi BankIdfc Bank Limited
Indian BankIndian Mercantile Cooperative Bank Ltd.
Indian Overseas BankIndusind Bank
Jalgaon Janata Sahakari Bank LimitedJammu And Kashmir Bank Limited
Jammu And Kashmir Grameen BankJanakalyan Sahakari Bank Limited
Janalaxmi Coop Bank Janata Sahakari Bank Ltd
Jharkhand Gramin BankKallappanna Awade Ichalkaranji Janata Sahakari Bank Limited
Kalupur Commercial Cooperative BankKalyan Janata Sahakari Bank
Kapol Cooperative Bank LimitedKarnataka Bank Limited
Karnataka Vikas Grameena BankKarur Vysya Bank
Kashi Gomti Samyut Gramin BankKaveri Grameena Bank
Kerala Gramin BankKhamgaon Urban Co Op Bank Ltd
Kotak Mahindra Bank LimitedLangpi Dehangi Rural Bank
Laxmi Vilas BankMadhya Bihar Gramin Bank
Madhyanchal Gramin BankMahanagar Cooperative Bank
Maharashtra Gramin BankMalwa Gramin Bank
Manipur Rural BankMeghalaya Rural Bank
Mizoram Rural BankNagaland Rural Bank
Nagar Urban Co Operative BankNagpur Nagarik Sahakari Bank Limited
Narmada Jhabua Gramin BankNasik Merchants Cooperative Bank Ltd.
New India Cooperative Bank LimitedNkgsb Cooperative Bank Limited
North East Small Finance Bank LimitedNutan Sahakari Bank Ltd
Odisha Gramya BankOriental Bank Of Commerce
Pallavan Grama BankPandyan Grama Bank
Paschim Banga Gramin BankPragathi Krishna Gramin Bank
Prathama BankPravara Sahakari Bank Ltd
Puduvai Bharathiar Grama BankPunjab And Maharshtra Cooperative Bank
Punjab And Sind BankPunjab Gramin Bank
Punjab National BankPurvanchal Gramin Bank
Rajarambapu Sahakari Bank LtdRajasthan Marudhara Gramin Bank
Rajkot Nagrik Sahakari Bank LimitedRbl Bank Limited
Rupee Cooperative Bank Ltd.Sangli Urban Co Op Bank Ltd Sangli
Saptagiri Grameena BankSaraswat Cooperative Bank Limited
Sardar Bhiladwala Pardi Pepls Co BkSarva Haryana Gramin Bank
Sarva Up Gramin BankSaurashtra Gramin Bank
Shikshak Sahakari Bank LimitedSolapur Janata Sahakari Bank Limited
South Indian BankState Bank Of Bikaner And Jaipur
State Bank Of HyderabadState Bank Of India
State Bank Of MysoreState Bank Of Patiala
State Bank Of TravancoreSuryoday Small Finance Bank
Sutlej Kshetriya Gramin BankSyndicate Bank
Tamilnad Mercantile Bank LimitedTelangana Grameena Bank
The A.p. Mahesh Cooperative Urban Bank LimitedThe Akola Janata Commercial Cooperative Bank Ltd., Akola.
The Cosmos Co Operative Bank LimitedThe Goa Urban Co Op Bank Ltd
The Greater Bombay Cooperative Bank LimitedThe Jalgaon Peopels Cooperative Bank Limited
The Kapol Cooperative Bank LimitedThe Karad Urban Cooperative Bank Limited
The Mapusa Urban Coop Bank Of Goa LtdThe Mehsana Urban Cooperative Bank
The Nainital Bank LimitedThe Shamrao Vithal Cooperative Bank
The Surath Peoples Cooperative Bank LimitedThe Thane Bharat Sahakari Bank Limited
The Zoroastrian Cooperative Bank LimitedTjsb Sahakari Bank Ltd
Tripura Gramin BankUco Bank
Ujjivan Small Finance Bank LimitedUnion Bank Of India
United Bank Of IndiaUtkal Grameen Bank
Utkarsh Small Finance BankUttar Banga Kshetriya Gramin Bank
Uttar Bihar Gramin BankUttarakhand Gramin Bank
Vananchal Gramin BankVidharbha Konkan Gramin Bank
Vijaya BankYes Bank
Zila Sahakari Bank Ltd