Home Loan FAQs – Tax Benefits, Eligibility

For buying residential property you can apply for Home loan.

Applicant should be an Indian citizen between the ages of 21 to 65,  salaried or self-employed, men or women both are eligible.

You can make an online home loan application after comparing home loan interest rates

An EMI is the ‘Equated Monthly Installment’, which is the monthly payment that you make towards repaying your Home Loan on a specified date until full loan amount with interest.

Home loans are long term borrowing instruments with a minimum tenure of 5 years and maximum tenure of 30 years, you can choose your repayment period between 5 to 30 years.

Applicant can be self employed , salaried individuals, professionals — with a regular source of income can apply for home loans. Age must be at least 21 years old and upto  age of 65 years when the loan ends. Home loan eligibility criteria depends on bank to bank and lender to lender like age limits, minimum income level, margin and more.

When you log on to the home loan section of emicalculator-india, you can apply for a home loan in simple steps.
Compare home loan interest rates, loan amount, processing fees, eligibility, income level etc.
Know latest home loan offers based on loan amount and eligibility.
Home Loan EMI calculator tool is available for calculating monthly emi based on loan amount and rate of interest and tenure.
Just you need to enter name, contact number, email, location, salaried or self employed and click on button.

Mostly in market 75% to 85% of cost of property is applicable, but loan amount is also depend on applicant’s eligibility criteria.

When applicant avail of a part of your home loan, applicant will be charged simple interest on the loan amount that has been paid out till your entire sanctioned home loan amount is disbursed. This payment of simple interest on part payment is called Pre- EMI Interest.

Under Income Tax Act 1961, you are eligible for tax benefits on the principal and interest components loan.

Security of the home loan would generally be mortgage of the property that is financed by bank or lender.

A Power of Attorney allows a person to grant another person the right to make decisions regarding the person’s assets, finances and real estate properties. Types are mentioned below.
General Power of Attorney –  where a property owner confers ‘general’ rights. The rights include but are not limited to sell, lease, sub-lease etc.
Special Power of Attorney – wherein only a specific right is given by the owner to the chosen person.

• Original copies of the chain of title agreements and Building Plan approvals
• Original registration and stamp duty receipts
• Possession Letter
• Original share certificate (In case of societies)
• Proof of payment of all dues like maintenance charges, electricity bills, phone, water and property taxes up to the date of handing possession
• NOC from the Society or any other concerned body confirming that there is no objection to the transfer

NRI can also apply for  home loan, those who wish to invest in a property or buy your dream house.

There is no tax benefits is applicable for NRI’s only if you file your returns and subsequently become eligible to avail the tax benefits.

Individual (s) over 18 years of age with a steady source of income who

• are Non Resident Indians (NRIs) holding a valid Indian passport
• are persons of Indian Origin (PIOs) holding a foreign passport

NRI home loan eligible criteria-

1. NRIs, must have total work experience of 2 years in India or abroad.
2. NRIs with a job contract for a minimum period of 2 years abroad after completion of 6 months in the employment and presently holding a valid job contract /work permit.
3. Indian citizens working abroad on assignments with foreign Governments/ government agencies or International/Regional Agencies like the UNO, IMF, World Bank, working with Merchant Navy etc., Officials of the Central and State Governments and Public Sector Undertakings deputed abroad on temporary assignments or posted to their offices (including Indian Diplomatic Missions) abroad

The banks usually offer the following types of loans on interest:

• Home Purchase Loan: For purchasing a new residential property or an old house from its previous owner.
• Home Improvement Loan: For executing repair and renovation work at home.
• Home Construction Loan: Loan is available for construct a house on a piece of land you have already purchased.
• Home Extension Loan: For expanding or extending an existing house. To cite a few examples, addition of an extra room, a floor etc.
• Land Purchase Loan: For the purchase of a plot of land for both residential or investment purposes.
• Home Conversion Loans:  If you have already purchased a house by taking a home loan but would now want to buy and move to another house.
• Balance Transfer Loan: These loans are availed to transfer one’s home loan from one bank to another.
• NRI Home loans: These are specialized loans, structured to suit the requirements of NRI’s who wish to build or buy a home in India.
• Loan against Property (LAP): These loans are given or disbursed against the mortgage of a property.

Immediate family members such as your parents, spouse, siblings and children are allowed to be joint borrowers in case of a home loan.

If the interest rate on the loan varies periodically over the loan tenure, then it is called a floating rate home loan. In this floating interest rate monthly emi may be decrease or increase as per market up or down.

During the whole repayment period EMI will not be affected by any increase or decrease in the market interest rates and the EMI amount will remain unchanged.

There are several way to repay loan amount like issuing post-dated cheques for the tenure of the home loan, getting the amount deducted automatically from your salary account or by ECS (Electronic Clearing System).

Payments are done through NRO, NRE, NRNR and FCNR accounts. These accounts change on the basis of RBI regulations.

Generally, banking & finance institutions pay around 75% to 85% of the cost of the property bought. The remaining 25% to 15% of the amount is paid on an up-front basis, which is popularly known as the down payment.

Completed loan application form
Passport size photographs
Identity proof – PAN card/Passport/ DL/ Voters ID
Residence proof- telephone or electricity bill/ passport/ voter ID / property tax receipt
Bank statement for at least past 6 months and salary certificates/ latest acknowledged ITR
Copy of plan approved for the proposed construction/extension
Cost estimation/ valuation report from Bank’s (or finance company) authorised surveyor/evaluator.
Allotment letter of housing board/ NOC of the society/Builder etc. as well as any other land use certificate/other

If you have an existing home loan and have made timely repayments towards the  home loan, you may get the option of borrowing an additional loan equal to the amount you have paid off on your current home loan. Top up loan is based on your existing loan history.

The percentage of the cost of the home that is not covered by the bank or lender providing you with the home loan. On an average, lenders implement a 15% – 20%  margin on loan i.e. applicant need to pay this percentage, remaining percentage i.e 85 – 80% lender will provide.

Most of bank and lender provide concessional on interest rate for women borrowers.

Amortization is a table with details of interest payment and periodic principal of a loan along with the amount outstanding after each payment and the decrease of loan balance till zero.

It is a facility provided by banks and NBFCs to their customers, those who are interested in purchasing a even before they have decided on a property to purchase.

Below the list of top home loan provider in India.

SBI Home Loan
HDFC Ltd Home Loan
ICICI Home Loan
LIC Home Loan
Axis Bank Home Loan
DHFL Home Loan
Bank of Baroda Home Loan