Home Loan
A home loan is a secured financial product offered by banks and housing finance companies to help individuals purchase, construct, or renovate residential properties. Leading lenders like HDFC Bank, PNB Housing Finance, IIFL Housing Finance, ICICI Bank, Axis Bank, and Adhar Housing Finance provide a wide range of home loan products tailored to the needs of salaried and self-employed individuals.
Key Features:
- Purpose: Home loans are specifically designed for the purchase, construction, or renovation of residential properties. The funds cannot be used for other purposes.
- Loan Amount & Tenure: Borrowers can avail up to 90% of the property value, with repayment tenures extending up to 30 years, making it easier to manage EMIs.
- Interest Rates: Home loans generally come with lower interest rates compared to other secured loans. For example, HDFC Bank offers rates starting from 8.25% to 9.80% per annum, depending on the loan amount and applicant profile. ICICI Bank, Axis Bank, and other major lenders offer competitive rates in a similar range.
- Processing Fees & Charges: Processing fees typically range from 0.25% to 0.50% of the loan amount, with some lenders offering fixed fees for salaried and self-employed applicants.
- Tax Benefits: Home loan borrowers can avail tax deductions under Section 80C (principal repayment) and Section 24(b) (interest payment) of the Income Tax Act, making it a tax-efficient borrowing option.
- Eligibility: Eligibility is based on income, employment stability, credit score, and property value. Most lenders provide online eligibility calculators and instant approvals.
Major Lenders
- HDFC Bank: Known for its competitive rates, high loan-to-value ratio, and flexible repayment options.
- PNB Housing Finance: Offers tailored home loan solutions for salaried and self-employed individuals.
- IIFL Housing Finance: Focuses on affordable housing loans with quick processing.
- ICICI Bank: Provides digital application processes and attractive interest rates.
- Axis Bank: Offers customized home loan products with balance transfer facilities.
- Adhar Housing Finance: Specializes in affordable housing finance for lower and middle-income segments.
- Other NBFCs: Many non-banking financial companies (NBFCs) also offer home loans, often catering to niche customer segments or those with limited credit histories.
Home loans remain the most popular route for property acquisition in India, thanks to their lower interest rates, long tenures, and tax benefits.