In India, saving and investing money is the option which everyone looks for. Investing money in buying a home is in everyone’s to do list. So no wonder that they go for a detailed analysis about the home loan and the process involved in it to choose the best, the fastest and the safest home loan provider.
According to the recent analysis, here are the details of the best banks for home loan borrowers.
- SBI Home Loan capturing 25.5% market share.
- HDFC Ltd. with 24.13%
- LIC Housing with 15.83%
- ICICI Bank with 13.10%
- Axis Bank with 6.23%
- IDBI Home Loan with 4.67%
- PNB Home Loan with 4.22%
- Others with 6.32%
These are the points usually borrowers look at while applying for a home loan.
- Interest rate – Fixed, floating, hybrid
- Home loan processing speed and the fees involved.
- Loan qualification
- Repayment terms
Let us go deep into these topics.
Interest rate :
Interest rate offered is the primary factor of comparison. It affects the EMI and total amount payable. For a home loan, it is advised to go for a loan with low interest rates. Also it is recommended to decide whether to go for a fixed or flexible or hybrid loan rate.
Interest rates of various banks are as follows :
SBI – 9.50% – 9.75%
HDFC Ltd. – 9.50% – 9.75%
LIC Housing – 9.6% – 9.75%
ICICI Bank – 9.50% – 9.75%
AXIS Bank – 9.50% – 9.75%
IDBI Bank – 9.60% – 9.75%
PNB – 9.60% – 9.75%
Here is the graph showing the trends of Home loan base interest rate over the five years :
- Home Loan processing speed and the fees involved :
It is a bit difficult process to apply for the home loan. You have to submit a large set of income and property related documents. The timeline for the approval will differ from bank to bank. Some banks are comparatively slower than others in carrying out the procedures, while some banks will approve your loan in simple and less time-consuming way.
You can choose your bank as per your convenience. If you can spend enough time to carry out the procedural work, then you can apply for the slower banks.
Here is the list of some major banks processing fees :
|ICICI Bank||0.50% of the loan amount or Rs. 1500/- (Rs. 2000/- for Mumbai, Delhi & Bangalore), whichever is higher + applicable Service Tax & Surcharge|
|HDFC Ltd||0.5% or 10,000+service tax (12.36%), whichever is higher|
|SBI Home Loan||Upto 1cr- NIL|
|Axis Bank||Up-to 0.50% of the loan amount subject to minimum of Rs.10,000/-|
|LIC Housing||0.50% of the loan amount|
|IDBI Home Loan||Upto 0.50%|
|PNB Home Loans||0.50% of the loan amount|
- Loan Qualification :
Each bank, internally, has its own rules to grant the loan. The different aspects usually lenders look into are the age, the source of income, credit history, employment stability, etc. Hence, each individual chooses the lender according to one’s own preferences.
- Repayment terms :
Housing finance regulator, National Housing Bank (NHB), has already barred home finance companies from charging any prepayment penalty. Among banks, State Bank of India was the first to do away with the pre payment fee on both fixed and floating rate loans. Following this, nearly 20 banks withdrew the penalty on floating rate loans. however, most lenders continue to charge the penalty on premature closure of fixed rate loans. Hence, it is another aspect a borrower looks at while taking a loan.
Different lenders use different yardsticks for measuring the borrower’s eligibility. Why shouldn’t borrowers consider doing research and compare several competitive feature of home loans offered by different lenders? It is better to have the policies, facts, terms and conditions clarified well in advance before locking in a seemingly ideal home loan with any lender.