A home loan is a type of loan provided by banks or financial institutions to help individuals purchase, construct, or renovate a house. It allows borrowers to buy property by paying a small down payment and repaying the rest in monthly installments (EMIs) over a fixed tenure.
Features of a Home Loan
🏡 High Loan Amount: Depending on the borrower’s income and eligibility, lenders offer up to 80-90% of the property’s value.
🏡 Flexible Repayment Tenure: Borrowers can choose repayment periods between 5 to 30 years.
🏡 Low Interest Rates: Home loan interest rates are generally lower than personal loans and vary between fixed and floating rates.
🏡 Tax Benefits: Borrowers can claim deductions under Section 80C and 24(b) of the Income Tax Act for principal and interest repayment.
🏡 Prepayment & Foreclosure Options: Some banks allow prepayment with low or no extra charges, helping borrowers save on interest.
🏡 Balance Transfer Facility: Borrowers can transfer their existing home loan to another lender with better interest rates and terms.
🏡 Joint Home Loan Option: A home loan can be taken with a co-applicant, increasing loan eligibility.
Eligibility Criteria for Home Loan
Lenders assess an applicant’s financial stability before approving a home loan. The key eligibility factors include:
✅ Age: 21–65 years (varies by lender)
✅ Income Stability: A steady income from salaried or self-employed sources
✅ Employment Status: Salaried employees should have at least 2–3 years of work experience, while self-employed individuals need a stable business history
✅ Credit Score: A 750+ credit score is preferred for better loan approval chances
✅ Existing Loans & Debts: A low debt-to-income ratio improves eligibility
✅ Property Valuation: The property should be legally approved and meet the lender’s requirements.
Documents Required for a Home Loan
📜 Identity Proof: Aadhar Card, PAN Card, Passport, Voter ID
