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Best Bank for Home Loan in India 2022

Home Loan is the type of loan that a wring professional do take at least once in their lifetime. As your home is close to your heart, the loan which helps you in taking it should also be appropriate & as per your needs. We here have come up with the 11 best-researched home loans for your benefit.

But before moving forward, let’s discuss – the Factors that Should Be Consider Before Choosing the Best Bank for Home Loan in India

1. Interest Rate

Interest rate is the most important factor, as even a small difference of 0.5% in the rate can make a huge difference.

2. Processing Fees

Bank charges a fixed amount or a percentage of the loan value as processing fees. The fee is for processing the application and does not guarantee loan approval; it is usually non-refundable.

3. Legal Fees

Bank charge a legal fee to verify the property documents.

4. Pre-closure Charges

Some banks have a clause, that you cannot pre-close your loan. If you close then you have to pay an additional fee (amt) in form of charges to pre-close.

5. Loan-To-Value (LTV) Ratio

It indicates the proportion of the property value that bank will finance you. It could be anywhere between 75% to 90% of the property value.

6. Part-Payment Rules

To avoid losing interest income some banks / housing finance companies (HFCs) put rigid part payment rules. Banks could also put a clause, which limits the amount or the percentage of the loan that can be prepaid during a month or given tenure.

7. Insurance Cover

You can buy an insurance cover for your home loan liability. Note, it’s optional, not mandatory, but it could be useful for your dependents at time of need.

Best Bank for Home Loan in India 2022

#1. ICICI Bank Home Loan

Pro’s

  1. It has simplified documentation process.
  2. Speedy approvals and competitive interest rates.
  3. House Construction, Home Renovation, Top-up home loans & Plot.
  4. Home loans up to Rs.5 Crores and up to 30 years loan tenure.
  5. Interest is charged on a monthly reducing basis i.e. the principal is calculated at the end of every month and then interest charged accordingly.
  6. Special rebate on the interest rate for the women first applicant.
  7. Non-working, female partner is allowed to be the first applicant.

Con’s

  1. EMI once increased cannot be decreased even after enough part-payments.
ParametersDetails
Interest Rate6.70% – 7.55%
Processing Fees0.75% of the loan amount or Rs. 11,000/- whichever is higher
KYC Checking FeeRs. 5,000/- + 18% GST
Maximum Tenure30 years
Pre-payment ChargesNil for floating rate loans
2% for fixed-rate loans.
LTVup to 90%
Late-Payment Charges2% per month

#2. State Bank of India Home Loan

Pro’s

  1. Stringent property verification measures.
  2. Loans for house purchase, house construction, home renovation, Top-up, SBI Maxgain loans (home loan as an overdraft loan).
  3. Interest is charged on a daily reducing balance i.e. the principal is calculated at the end of every day and the interest charged accordingly.

Con’s

  1. Slow approval process.
ParametersDetails
Fixed Interest RateNone
Floating Interest Rate6.80% – 7.15%
MaxGain interest rate7.15% – 7.50%
Processing Fees0.35% of loan amount Minimum – Rs. 2,000 and Maximum – Rs. 10,000
Maximum Tenure3 years to 30 years
Pre-closure ChargesNil
LTVUp to 90%
Part-Payment ChargesNil

#3. HDFC Ltd. Home Loan

Pro’s

  1. Door-step services for consultation.
  2. Stringent verification of property documents.
  3. Easily apply online and upload the documents.
  4. “TruFixed” Loan the interest rate is ‘Fixed’ for an initial 24 months.
  5. Offers Multiple types of repayment options to choose from:
    1. Step Uprepayment schedule is linked to the expected growth of your income. You can increase the EMI after every few years as income increases.
    2. Flexible Loan Instalments :EMI is higher during the initial years and subsequently decreases later.
    3. Tranche Based : If you have purchased an under-construction property, instead of paying only the interest on the loan disbursed, you can actually start paying the full EMIs i.e. the EMI amount after you get the entire loan amount disbursed.
    4. Accelerated Repayment :it provides flexibility to increase the EMIs every year in a fixed proportion, helping in repaying the loan much faster.
    5. Telescopic Repayment:in this option, you get longer repayment tenure of up to 30 years for enhanced loan amount eligibility and smaller EMIs.

Con’s

  1. HDFC charges up to Rs. 2,000 for re-appraisal of loan.
Parameters Details
TruFixed Interest Rate7.40% – 8.20%
Floating Interest Rate6.70% – 7.65%
Processing FeesUp to 0.50% of the loan amount or Rs. 3,000/- whichever is higher.
Maximum Tenure30 years
Pre-payment Nil for floating rate home loans
2% in case of fixed-rate or combination rate loan
LTV90% for loan value less than Rs. 20 lakhs
80% for loan value more than 20 lakhs
75% for loans above Rs. 75 lakhs
Charges for delayed payment of EMI24% per annum

#4. Axis Bank Home Loan

Pro’s

  1. Home loan as small as Rs.3 lakhs.
  2. Loan for purchase of a constructed residences, construction of property, and top-up loans.
  3. Axis bank offers floating and fixed interest rate home loans with a maximum tenure of up to 30 years.
  4. Fast Forward Home Loans, bank offer up to 6-month EMI holiday on completion of 10 years loan tenure and another 6 months on completion of 15 years from the first disbursement, provided the repayment track record is clean. Here, the EMI holiday means that you can stop paying EMIs for a few pre-determined months.

Con’s

  1. Charges for statement issue, re-pricing, document photocopy issue, document retrieval, interest certificate issue etc.
Parameters Details
Fixed Interest Rate12% for all cases.
Floating Interest Rate6.75% – 7.20%
Processing FeesHigher of 1% of the loan amount or Rs. 10,000 + GST
Maximum Tenure30 years
Pre-closure ChargesNil for floating-rate loans and
2% for fixed-rate loans
LTV90% for loan value less than Rs. 30 lakhs
80% for loan value more than 30 lakhs to Rs. 75 lakhs
75% for loans above Rs. 75 lakhs.
Penal interest rate 2% per month

#5. Union Bank of India Home Loan


Pro’s

  1. Home loan as small as Rs.3 lakhs.
  2. Bank also includes the cost of simultaneous purchase of a solar power panel

Con’s

  1. Fixed rate are for maximum of 5 years

.

Parameters Details
Fixed Interest RateUp to Rs. 30 lakhs – 11.40%
Rs. 30 to 50 lakh – 12.40%
Rs. 50 lakh to Rs. 2 Crore – 12.65%
Floating Interest RateHome Loan up to Rs. 30 lakh – 6.60% to 7.35%
Home Loan above Rs. 30 lakh – 6.60% to 7.40%
Processing Fees0.50% of the loan amount. Maximum of Rs. 15,000 + GST
Maximum Tenure30 years
Pre-closure ChargesNil for floating rate loans
Nil for a fixed-rate loan if repaid from own sources
2% – if the loan is being refinanced
LTV90% for loan value less than Rs. 30 lakhs
80% for loan value more than 30 lakhs
Part-Payment ChargesNil

#6. Indiabulls Housing Finance Home Loan

Pro’s

  1. Indiabulls do not charge for legal opinion and technical valuation charges.
  2. The interest is calculated on a monthly reducing balance basis.
  3. It offers a dual-rate loan i.e. ‘Fixed and Floating Rate Loans’ in this interest rate remains fixed for initial 2 years.
  4. It is preferred lenders for those who want to buy properties with incomplete documentation or an unclear chain.
  5. “eHome Loans” is a innovative product where the entire application process is online i.e. document submission, loan sanction, loan disbursal, status of application.

Con’s

  1. Slow processing of application and customer service not up to the mark.
  2. Rs. 650 charges for database admin fee.
  3. Processing fee is as high as charges 2%.
Parameters Details
Dual loan (Fixed and Floating) Interest Rate8.99% onwards
Variable Interest Rate7.60% to 10%
Processing FeesUp to 2% of the loan amount
Maximum Tenureup to 30 years
Pre-closure ChargesNil for floating rate loans
For fixed-rate loans – 2% (during the fixed interest rate period)
LTV90% for loan value less than Rs. 30 lakhs
80% for loan value 30 lakhs to 75 lakhs
75% for loan value above Rs. 75 lakhs
Late-Payment Charges24% per annum

#7. LIC Housing Finance Home Loan

Pro’s

  1. Loans for house purchase, house construction, repairs, plot purchase, home extension as well as renovation.
  2. Top-up loans available under certain conditions.
  3. You can choose a fixed or a floating rate loan with a tenure of up to 30 years.
  4. The interest is calculated on a monthly reducing basis.
  5. People with low CIBIL score can apply here.
Parameters Details
Fixed Interest Rate10.05% to 10.15%
Floating Interest Rate6.70% – 7.90%
Processing FeesRs. 10,000 for loans up to 50 Lakhs
Rs. 15,000 for loans above Rs. 50 Lakhs
Maximum Tenureup to 30 years salaried / up to 25 years self-employed
Pre-payment ChargesNil
LTV90% for loans up to 30 Lakhs
80% for loans above 30 Lakhs and up to 75 Lakhs
75% for loans above 75 lakhs
Late-Payment Charges1.5% for default of up to 12 months
2% for default beyond 12 months

#8. PNB Housing Finance Home Loan

Pro’s

  1. Products like Home Purchase Loans, Home Construction Loans, Home Extension Loans, Residential Plot Loan and Home Improvement Loans.
  2. You can request for enhancement in your loan amount, in case of escalations in costs.
  3. People with low CIBIL score can apply here.

Con’s

  1. But does not provide top-up loans
ParticularsDetails
Floating Interest RateLoan amount up to Rs. 35 lakhs – 6.75% to 9.60%
Loam amount greater than Rs. 35 lakhs –  6.90% to 9.75%
Processing Fees1% of the loan amount. Minimum fees – Rs. 10,000
If the loan is approved then PNBHF keeps all the fee.
In case the loan is not approved then PNBHF retains Rs. 3,000 per property.
Maximum Tenure30 years
Pre-payment ChargesNil for floating rate loans
LTV90% for loan of less than Rs. 30 lakhs
80% for loan of more than 30 lakhs and up to Rs. 75 lakhs
75% for loan of value more than Rs. 75 lakhs
Late-Payment Charges2% per month

#9. Bank of Baroda Home Loan

Pro’s

  1. Loans for house purchase, buy plot, construction, improvement, top-up and renovation.
  2. Pre-approved home loan are also available even before you finalize the property.
  3. In Home Loan Advantage product you can park your savings in a savings account which is linked to the loan account. The entire amount in the savings account will be treated as principal paid and thus interest outgo will reduced.
  4. Free credit card facility and concession of 0.25% for car loans. Bank also offers free accident insurance with every home loan.
Parameters Details
Fixed Interest RateNot offered
Floating Interest Rate6.85% – 8.70%
Processing FeesFor loan up to Rs. 50 lakhs
Processing fee- 0.50% of the loan amount. Minimum – Rs. 8,500 and Maximum – Rs. 15,000
For loan above Rs. 50 lakhs
Processing fee- 0.25% of the loan amount. Minimum – Rs. 8,500 and Maximum – Rs. 25,000
Maximum Tenure30 years
Pre-closure ChargesNil
LTV90% for loan of less than Rs. 30 lakhs
80% for loans of more than 30 lakhs and up to Rs. 75 lakhs
75% for loans of value more than Rs. 75 lakhs
Part-Payment ChargesNil

Tips – When You About To Choose Home Loan

1. Make a woman (either your wife or mother) as a co-borrower to avail lesser interest rate.

2. If a property is already approved by a bank, even then you have to pay legal & property verification fees.

3. Bank will approve the amount based on your income eligibility, no matter how much loan-to-value the banks claim to finance.

4. Your loan amount eligibility will get reduced by your existing loans such as personal loan, education loan, car loan, etc.

5. A good CIBIL score above 750 will help you in getting lesser interest rates. If you have a lower CIBIL Score you should know

6. In a situation where your bank value’s the property at a lesser price than what the builder has quoted. Then always, trust the bank’s valuation and renegotiate with the builder.

7. Before transferring your existing home loan to the new banker for a lesser interest rate, keep in mind that your current lender might charge you a fee (usually in a percentage of your loan amt) to transfer it. This cost could subside the benefit of lesser interest.

9. Bank always take away the original sale deed and documents immediately on registration and store it with them till the home loan gets over. So check how and where they store it, and how much time will it take to retrieve it after the loan is paid. As losing your original sale documents is a big loss and may present legal challenges too.

10. Along with interest rates and processing charges, do check other miscellaneous charges too, like document retrieval charges, valuation charges, documentation charges, additional statement charges, part payment charges, pre-closure charges, CIBIL Report charges, No Due Certificate/ NOC charges and Conversion charges.

11. On the closure of loan, it’s the duty of bank or financial institution to update the same in your CIBIL. Ensure that, as failing might affect your score.

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