In 2020 as per a study, India’s average home loan ticket size increased to Rs.26.41 lakh from Rs.23.82 lakh in 2019. Several surveys have also concluded that this is the best time to avail of a home loan.
However, availing a home loan is a long-term financial commitment. Thus, to successfully apply for a home loan in India, an applicant should know about the features of a home loan beforehand.
Features of a home loan in India
Easy eligibility criteria for home loan
To apply for home loan, an applicant needs to fulfil some basic eligibility criteria. They must have a CIBIL score of around 700 and above to qualify for this loan. Though the eligibility criteria vary with lenders, there are some common factors, including-
- Applicants must be residing citizens of India.
- The age should be 23 to 62 years (salaried) and 25 to 70 years (self-employed).
- The self-employed individuals should have a business continuity of at least 5 years at the current enterprise.
- The salaried individuals must have a working experience of at least 3 years with a steady income source.
Applying for a home from a leading financial institution involves minimal documentation. However, applicants must submit the required documents to prove their creditworthiness.
Flexible repayment tenor
An applicant can choose a repayment tenor of up to 30 years to ensure manageable monthly payments. One can use a home loan EMI calculator and choose a preferable tenor per his/her financial capabilities.
Although the application process of a home loan varies with lenders, there are some common steps. Once prospective applicants decide the loan amount and check the EMI payable, they can follow the steps below to apply for a home loan online:
Steps to apply for a home loan
Step 1: Visit the official portal of the chosen lender.
Step 2: Navigate to the home loan section.
Step 3: Click on ‘Apply now’.
Step 4: Enter all the relevant details, including personal, financial, and others.
Step 5: Lastly, a representative from the lender’s end will contact the applicant to take the process further.
Before availing a home loan in India, most lenders advise checking their EMI amount on the home loan EMI calculator. Although an easy online tool to use, one has to follow a few steps.
Steps to use home loan EMI calculator
Step 1: Enter the preferred loan amount.
Step 2: Select a tenor.
Step 3: Enter the applicable rate of interest.
After entering all the details, the EMI calculator will display the financial details regarding the home loan. Apart from knowing the EMI, there are also other benefits to using this calculator.
Benefits of availing a home loan
Easy home loan balance transfer facility
Besides new borrowers, existing ones can transfer the outstanding loan amount to a new lender and enjoy lower interest rates and better terms of service.
Avail top-up loans
Additionally, lenders also offer a top-up loan with a home loan balance transfer that individuals can utilise without any end-use restrictions.
Secure high-value loans easily
Reputed lenders avoid lengthy application processes. One can apply for a home loan both online or offline against simple eligibility and documentation to avail funds in no time. Moreover, such lenders offer affordable home loan interest rates to make repayment hassle-free.
Get tax benefits
Under section 24 of the Income Tax Act, individuals can claim tax benefit on the interest repayment amount up to Rs.2 lakh if the chosen property is completed within 5 years and self-occupied. Also, they can avail claim up to Rs.1.5 lakh on principal amount under Section 80C. Also, first-time homebuyers can avail an additional benefit of up to Rs.50,000 against interest repayment.
In India, several HFCs extend pre-approved offers to expedite the home loan application process. These offers are available on a variety of financial products like a home loan, loan against property, and others. An applicant needs to enter his/her name and contact number to check the offer. So, if an individual is looking to apply for home loan in India, they should keep all the information’s in mind.