Everything You Need to Know About Home Loans ๐
Looking to buy your dream home? A home loan might be the perfect financial tool for you. Here’s everything you need to know:
Understanding Home Loans
When you take out a home loan, you’re essentially borrowing money from a lender to purchase a home. You’ll then repay this loan in monthly installments that include both the principal amount borrowed and interest.
- Home loans can be used for various purposes, such as:
- Purchasing a property from a developer
- Buying a resale property
- Constructing a housing unit on a plot of land
- Making improvements to an existing property
Choosing the Right Home Loan
One of the key factors to consider when selecting a home loan is the interest rate offered by the lender. Here are some of the top banks and housing finance companies offering competitive interest rates for loan amounts above Rs 75 lakh:
Banks Offering the Best Interest Rates
When it comes to home loans, interest rates play a crucial role in determining the overall cost of the loan. Here are some of the banks offering the best home loan interest rates for loan amounts above Rs 75 lakh:
- Public Sector Banks
- State Bank of India: 8.50-9.85%
- Bank of Baroda: 8.40-10.90%
- Union Bank of India: 8.35-10.90%
- Punjab National Bank: 8.40-10.15%
- Private Sector Banks
- Kotak Mahindra Bank: 8.70% onwards
- ICICI Bank: 8.75% onwards
- Axis Bank: 8.75-9.65%
- HSBC Bank: 8.50% onwards
- Housing Finance Companies (HFCs)
- LIC Housing Finance: 8.50-10.75%
- Bajaj Housing Finance: 8.50% onwards
- Tata Capital: 8.75% onwards
- PNB Housing Finance: 8.50-11.45%
Loan Amount
When applying for a home loan, you’ll typically need to contribute between 10% and 25% of the total property cost as a down payment. The loan amount can cover between 75% and 90% of the property cost, which can be used for various purposes like building, improvement, and extension.
Home Loan Tax Benefits
One of the advantages of taking out a home loan is the tax benefits you may be eligible for. Depending on the repayment of the principal and interest components of your loan, you could qualify for tax benefits under sections 80C, 24(b), and 80EEA of the Income Tax Act, 1961.
Minimum CIBIL Score Required
Your credit score plays a crucial role in determining your eligibility for a home loan. Most financial institutions prefer applicants with a CIBIL score of 750 or higher. While some lenders may consider applicants with slightly lower scores, they may offer less favorable terms and conditions.
Hot Take: Ready to Finance Your Dream Home?
Now that you’re armed with all the essential information about home loans, you’re ready to take the next step towards buying your dream home. Compare interest rates, understand the terms and conditions, and make an informed decision that suits your financial needs and goals. Happy home hunting!
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