Home Loan FAQs

Home loans are generally taken for a long tenure as the loan amount is usually a large sum. A home loan can be taken for a period ranging anywhere between 5 and 30 years.

There are many banks and housing finance companies that provide home loans, like:

• HDFC Ltd.
• ICICI Bank
• IDBI Bank
• Axis Bank
• LIC Housing Finance
• CITI Bank
• Punjab National Bank
• Indiabulls

You can get a home loan of up to 80% of the Total Consideration Value i.e., the total value of the property, or, your eligibility as determined by the lender, whichever is lower.

Indians who have a regular source of income that include salaried individuals, self-employed professionals, self-employed business people and existing property owners even NRIs, are eligible for home loan. The only condition here would be of security against the loan.

Yes, one can avail a pre-approved loan from any financial institution or bank.

Yes you can have your husband/wife, son/daughter, father/mother as a Co-Owner in your property.

You can include your wife/husband as a co-applicant for the home loan. But keep in mind that their income shall be included to enhance the loan amount and for other legal issues.

Many financial institutes and banks have made it mandatory to have a Co-Applicant while applying for the loan. For being a Co-Applicant it is not necessary for that person to be a Co-Owner in the property. Clarify it further with the institutions.

Generally banks and financial institutions pay 85% of the cost of the property. The rest 15% of the money that we pay from our side is known as down payment for the loan.

The other costs that usually accompany a home loan are:

• Processing Charge – is the fee that lender charge when you apply for a loan.
• Commitment Fees – is levied by financial institutions in case the loan is not availed within a stipulated period of time even after it was processed and sanctioned.
• Miscellaneous Costs – is charged by lenders as a documentation or consultant charge.

EMI (equated monthly Installment) is the amount of money that is paid to the lender (banks/financial institutions) on a monthly basis. EMI is always paid on a fixed date of each month until the total amount due is paid up during the tenure.

The EMI is calculated, taking into account the loan amount, the time period for the repayment of loan and the interest rate on loan amount. For example: If your loan amount is 1,00,000, the loan period is 10 years and the interest rate is 8.75% per annum, then your calculated EMI will be Rs 1,253.27.

If it seems a bit confusing, then take the help of our EMI Calculator.

You have to submit the following documents to get the loan approval.

• Personal details like: Name, Residential Address and DOB (date of birth) etc.
• Identity proof like: Pan Card or Voter ID or driving license.
• Proof of income like: Salary slip (including all the deductions).
• Proof of address: Electricity bill, water bill, bank statement or the credit card statement.
• Bank statement of last 6 months.
• Guarantor form (this is optional depending upon the bank or the financial institution).

The steps involved are:

• Submit the application form with all the necessary documents.
• Verification of the documents by the financial institutions.
• After all the documents are verified you get the loan sanctioned by the banks.
• After loan is sanctioned, you sign the loan agreement and the loan amount is given to you.

A fixed interest rate remains constant throughout the loan period irrespective of the changes in market conditions. On the other hand, floating interest rate can decrease or increase depending on market fluctuations.

Some factors to be kept in mind while comparing loans from different financial institutions are as follows:

• Plan out the kind of loan and the amount that you want to apply for.
• Determine the total cost of the loan that you will be paying when the loan tenure ends.
• Carefully read all the terms and conditions on which the bank or financial institution will be providing the loan to you.
• Check out the different loan offers that are available in the market and make your pick keeping in mind the above steps.

According to the Income Tax Act, 1961, you do enjoy some tax benefits on your loan, but only on the principal and interest components. Check the current market conditions and the benefits that you can avail from www.incometaxindia.gov.in