If you are considering applying for a home loan, you should be aware of the full procedure as it involves a commitment that you will have to fulfil for a number of years until the loan is paid back.
Different types of loan
Certain financial institutions provide adjustable rate mortgages, where the interest rate is connected to the lender's base rate. In the event of a modification in the benchmark rate, the interest rate will be adjusted as well. Fixed-rate loans come with an interest rate that remains constant for the entire duration of the loan. Hybrid loans combine fixed and floating-rate loans. Before making a decision, it is important to carefully consider the advantages and disadvantages of each option. Before submitting your application, it is important to verify with your bank as the interest rate may differ.
The main factors for determining eligibility for a home loan are your income and ability to repay. The interest rate for your home loan is the rate that was in place on the day you received the money.
Name of Lender Loan Amount (Rs) Upto 30 Lakh
PUBLIC SECTOR BANKS
1. State Bank of India- 8.50-9.85
2. Bank of Baroda- 9.15-10.65
3. Union Bank of India- 8.35-10.75
4. Punjab National Bank- 8.45-10.25
5. Bank of India- 8.40-10.85
6. Canara Bank- 8.50-11.25
7. UCO Bank- 8.45-10.30
8. Bank of Maharashtra- 8.35-11.15
9. Punjab and Sind Bank- 8.50-10.00
10. Indian Overseas Bank- 8.40-10.60
11. Central Bank of India- 8.45-9.80
PRIVATE SECTOR BANKS
1. Kotak Mahindra Bank - 8.70 onwards
2. ICICI Bank- 8.75 onwards
3. Axis Bank- 8.75-13.30
4. HSBC Bank- 8.50 onwards
5. South Indian Bank- 8.70-11.70
6. Karur Vysya Bank- 9.00-11.05
7. Karnataka Bank- 8.50-10.62
8. Federal Bank- 8.80 onwards
9. Dhanlaxmi Bank- 9.35-10.50
10. Tamilnad Mercantile Bank- 8.60-9.95
11. Bandhan Bank- 9.16-15.00
12. RBL Bank- 8.90 onwards
13. CSB Bank- 10.73-12.58
14. HDFC Bank Ltd.- 8.75 onwards
15. City Union Bank- 8.25-9.50
Cost of your home loan
When assessing your home loan qualification, it is important to also consider the fees associated with it. The expense will include interest payments, processing fees, administrative fees, early payment fees, and other related costs. For adjustable or floating rate loans, the best prepayment charge is zero.
Also Read: Home Loan Interest Rates - May 2024
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Ans 1. Home Loan Interest Rate 2024 Currently, Union Bank of India and Bank of Maharashtra offer the lowest home loan interest rate starting from 8.35% p.a. Punjab National Bank, Bank of India, Indian Overseas Bank and Canara Bank offer rate of interest on home loans starting from 8.40% p.a.
Ans 2. The EMI value for Rs. 30 lakh home loan will depend on two factors – loan tenure and interest rate. For example, if you're availing SBI home loan at 9% p.a. for tenure of up to 20 years, then your home loan EMI will be Rs. 26,992.
Ans 3. Illustration : How Much Loan Can I Avail? For e.g. If a person is 30 years old and has a gross monthly salary of ₹30,000, he can avail a loan of ₹20.49 lakh at an interest rate of 6.90% for a tenure of 30 years provided he has no other existing financial obligations such as a personal loan or car loan etc.
Ans 4. In the case of the daily reducing balance, which is the methodology we employ, your interest is calculated only on the outstanding loan amount, which reduces every time you pay off your EMIs or make any prepayments. This in essence lowers your effective rate of interest significantly.
Ans 5. The government-backed-guaranteed return schemes should be the first choice. These are the Senior Citizen Saving Scheme (SCSS), Pradhan Mantri Vaya Vandana Yojana (PMVVY) and Post Office Monthly Income Scheme (PO-MIS).