Home Loan

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What is a Home Loan ?

Home Loan is money (capital) provided by Lender to Borrower from a Bank/NBFC etc to Purchase, Construction, Repair Home or Residential Plot.

What is the Minimum amount for a Home Loan ?

Minimum Home Loan amount is Rs. 100,000/-

What is the Maximum amount for a Home Loan ?

Home Loan sanction amount is usually 70-90% of Property Value. Further, Maximum Loan Sanction amount is dependent upon the Financial Credentials of the Loan Applicant. There is no upper limit.

What are the General Eligibility Criteria for Home Loan ?

    The general eligibility conditions are as follows:

  • Borrower should be Resident of India or NRI.
  • Borrower should be at least 18 years of age.
  • Loan Repayment should be up to the age of 70 years (borrower).

Does CIBIL score matter when it comes to Home Loan ?

Yes. A good (high) CIBIL Score and Clean Credit History is very important. All lenders refer to CIBIL score before making a final decision on Home Loan. CIBIL Score can be a Deal Maker or a Deal Breaker.

When should I apply for a Home Loan ?

You can apply for Home Loans, before or after choosing/finalising a property (Home, Plot etc) to be purchased. Home Loan approval letter (Conditional Home Loan Sanction Letter) from the lender will confirm the amount of loan, which the lender can sanction to you. This helps in Budgeting and Property Purchase Power. Disbursement of Loan Amount starts after proper verification of the Property Documents by the Lender.

How can I apply for Home Loan ?

What is the Home Loan Approval Process ?

    Home Loan Approval Process consists of four stages, namely:

  • Loan Eligibility Assessment
  • Conditional Home Loan Sanction Letter (from Lender to Borrower).
  • Security Audit
  • Home Loan Disbursement

What is the disbursal time for Home Loan ?

Three Working Days, after receipt of all documents from the Applicant.
Home Loan Disbursal is a Step by Step (Stage by Stage) Process on the basis of the Stage of Construction. In case of resale or ready possession properties, the disbursement is full and final.

How can I save Income Tax from Home Loan ?

  • Taxpayers, who have availed Home Loan, can claim Tax Benefits under the following laws :
  • Section 80C of Income Tax : Tax Benefits on principal amount of the Home Loan.
  • Section 24 of Income Tax : Tax Benefit is available on the interest that is paid towards the Home Loan under Section 24.
  • Section 80EE of Income Tax : Tax Benefit on interest paid on Home Loan for First Time Buyers.

What are the various types of Home Loans available ?

  • New Home Purchase Loan : Loan required for purchasing a New Home.
  • New Home Construction Loan : Loan required for construction of New Home Building
  • Home Renovation : Loan required for Home Repair/Improvement/Expansion etc.
  • Plot Loan : Loan required for purchase of Plot of Land (non Agricultural) for Home Construction/Investment.
  • Home Loan Transfer : Transfer of existing Home Loan from other lenders (Banks, NBFC etc).
  • NRI Home Loans : Special Home Loans for NRI (Non Resident Indians)

What is a Fixed Rate of Interest ?

Rate of Interest remains unchanged for the entire duration of the loan period. It does not fluctuate with changes in lending rates increase or decrease by Government. Risk involved is less. But in case Market Lending Rates decrease in the future, you still have to pay the pre-contracted Fixed Interest Rates.

What is a Floating Rate of Interest ?

Rate of Interest changes, based on fluctuations in the Market Lending Rate. In case Market Lending Rates go up, you have to pay higher Interest Rates Component. On the other side, if Market Lending Rate goes down, you can benefit by having lower Market Interest Rate Payments.

Can I have a Flexible Loan Term i.e. Part Fixed Rate, Part Floating Rate /

Yes. It is possible to have Flexible Loan Terms wherein Some Part of the Loan is on Fixed Interest Rate and the remaining part is on Floating Interest Rate.

What is Pre EMI Interest ?

It is the interest component which has to be paid by the Borrower to the Lender, until total Loan Disbursement has not been done by the borrower. It is the interest which is applicable on the portion of loan disbursed to borrower (prior to reaching the Full Loan Disbursement Stage). Pre EMI Interest is payable on monthly basis.

Who pays the Stamp Duty. Buyer or Seller ?


What is the time frame for Home Loan Repayment ?

Usually, Home Loan Repayment time period is between five (5) to twenty (20) years.

What is FreeHold Property ?

FreeHold Property (Flat, Plot etc) is the type of asset ownership where the ownership if full and unconditional (as per law of land). There is no lessee/lessor involved. It is comparatively safe to go for purchase of FreeHold Property.

Can I Pre Pay the Home Loan Amount ?

Yes. There is no penalty for Pre Payment of Loan Amount.

I have money to purchase a House. Should I still avail Home Loan ?

Yes. Home Loan provides you with Tax Exemption Benefits. If you avail Home Loan, you can claim Tax Benefits on Principal and Interest Components of Home Loan, in the form of Income Deductions to the assesse (Income Tax Act, 1961). contact us for a detailed discussion.

Can I obtain In Principal Loan Approval Letter and avail Loan at a Later Stage ?

Yes. In Principal Loan Approval Letter is usually valid for 3 months.

What is the difference between Carpet Area, Built Up Area, Super Built Up Area ?

  • Carpet Area : Area of the Apartment/Flat. It does not include Area of the Walls.
  • Built Up Area : Area of the Apartment/Flat. It includes Area of the Walls.
  • Super Built Up Area : Built Up Area + Common Areas (Lobby, Lifts, Staircase etc).