Best Home Loans 2020| North Loop Official Blog
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09 Sep 2020

Best Home Loans 2020

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Credit: North Loop

Home loans offer the opportunity to fulfil your housing dreams and have become an indispensable part of the real estate market. The growing popularity of home loans has also led to the entry of many lenders in the market offering home loans at various interest rates. But the key factor in opting for a home loan is not just choosing one with the lowest home loan interest rate but also one that aligns with your long-term financial goals or housing needs and offers ease of application.

Here are some benefits of home loans –
High repayment tenure: Home loans have the longest repayment tenure of up to 30 years among all other loan forms. That means the burden of equated monthly instalments can get considerably reduced by extending the tenure of your loan.
Capital appreciation: Home loans aid in investing in real estate property that ultimately leads to high capital appreciation with prices or property continually increasing with time.
Monthly instalment facility: Home loans convert many housing dreams into reality. Easy monthly instalment payment for the repayment of home loans makes it easy to buy desired homes and save money on high rents.

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Now that we know the advantages of home loans, let’s read about some of the important steps you must remember to avail the lowest interest rate home loans -

Maintaining a good credit score – A good credit score shows your ability to repay loans successfully and acts as evidence of your efficient loan repayment history. A good credit score can help you attract home loans at better terms and conditions and affordable rates.

Joint home loans – The primary advantage of joint home loans is that they involve the credit-worthiness of two individuals instead of just one. That means, if you take a joint home loan with another person, both your credit score is considered together and the ability to repay the loan also increases, attracting loans with lower interest rates and better terms.

Home loan type – Home loans is a broad term that covers various aspects of home loan products such as loans for improvement of homes, home renovation loans, home purchase loans etc. The general observation is that the loans offered for the purchase of homes are usually at a lower interest rate in comparison to those for home improvements and others.

Home loan offers: You can get low-interest rate home loans by keeping a lookout for promo offers by lenders. Securing such offers can help you apply for negotiable home loan interest rates with other added benefits.

Fixed income source – It is easier to get home loans at lower interest rates if you have a fixed source of income. Therefore, if you are a salaried individual, the chances of you getting home loans at low rates are the highest.

Let us now compare and look at the Top 10 banks with the lowest Home loan interest rate as of September 2020 –
SBI Home Loan – 6.95 %

HDFC Home Loan – 6.95 %

Citibank Home Loan – 7.20 %

North Loop Home Loan – 9.75 %

Bank of Baroda Home Loan – 7.00 %

ICICI Home Loan – 6.95 %

Axis Bank Home Loan – 7.10 %

LIC Home Loan – 6.90 %

PNB Home Loan – 8.60 %

Indiabulls Home Loan – 9.25 %

SBI Home Loan –

SBI home loan is offered to both Resident as well as Non-Resident Indian and is a popular home financing option for people in the country. SBI home loan interest rates are comparatively lower than average interest rates with its balance transfer and top-up loan rates being fairly competitive. The SBI home loan eligibility is 18 to 70 years and the maximum tenure of the loan is 30 years.

While SBI home loan interest rates are lower than the market average, the SBI home loan eligibility criteria and process of application is tedious and the documentation required is cumbersome. Moreover, if you are an NRI applying for the loan, the application can be even more difficult and the customer services offered by the bank are below average.

HDFC Home Loan –

HDFC Bankoffers home loans to NRIs, PIOs (Persons of Indian Origin) as well as OCIs (Overseas Citizen of India). It has flexible repayment tenure and no hidden charges, making the process a transparent one. However, the HDFC Bank home loan interest rate is considerably higher as compared to other banks. The home loan eligibility is 18 to 65 years and the maximum loan tenure is 20 years.

Even though HDFC offers a diverse range of financial products and services including home loans, customers have often reported of a poor grievance redressal mechanism followed by the bank and several hindrances while applying for the home loan including the production of a variety of different documents and proofs. Also, the high HDFC Bank home loan interest rate is a negative factor that many people complain about.

Citibank Home Loan –

Citibank offers a competitive home loan interest rate on loan amounts up to Rs.10 crore. The home loan eligibility for Citibank is 23 to 60 years and the maximum tenure of its loan is up to 25 years.

While Citibank is one of the popular banks in India offering low-interest rate home loans, its application fee is considerably higher as compared to other banks and can go up to Rs.5000.

North Loop Home Loan –

North Loop is one of the lowest home loan interest rate provider in India. It offers an end-to-end online home loan process with extremely competitive and low-interest rates. Its online home loan application process is extremely easy, user-friendly and takes the minimum amount of time.

Moreover, North Loop requires significantly fewer documentation or proofs and can provide home loans up to Rs.5 crore, depending on the price of the property. The customer service offered at North Loop is also exemplary with special professional assistance to help you choose the home loan option and EMI that best suits your needs.

ICICI Home Loans –

ICICI offers a wide range of home loan scheme options to meet different kinds of home loan requirements and finance needs. It also facilitates pre-approved home loans and offers a tax benefit option of up to Rs.1.5 lakh. If you are an NRI, the home loan eligibility for ICICI Bank is 25 to 60 years.

As compared to other banks, the minimum work-experience requirement for ICICI home loan eligibility is a little more stringent, especially if you are living in the USA. While the educational qualification is at least a diploma or graduate degree, the minimum work experience is for three years.

Axis Bank Home Loan

Axis Bank home loans do not include prepayment and foreclosure charges along with offering good turnaround time. The home loan eligibility for Axis Bank is that you should be between 24 and 60 years of age. If you are an NRI, the home loan eligibility is that your minimum income should be $3000 per month with a work experience of at least 6 months abroad. Axis bank offers good benefits for home loans in India but the interest rate offered by it is not competitive enough and slightly on the higher side as compared to the other options available.

LIC Home Loan –

LIC offers home loans to purchase, construct, extend or renovate a property. The loan amount offered varies from Rs.1 lakh to Rs.15 crore depending on your financing needs, income stability and property value. The maximum tenure allowed for repayment of the loan is 30 years and if you are an NRI, the home loan eligibility is 18 years.

Moreover, to apply for the LIC home loan, a good credit CIBIL score of 750+ is a necessity. LIC specialises in providing various types of loans to its customers, but its application processing fee is markedly higher as compared to other banks and ranges between Rs.10,000 to Rs.15,000 including GST (Goods and Services Tax).

Bank of Baroda Home Loan –

Bank of Baroda home loan can be used for the purchase of a home, plot and even for construction or home renovation. The tenure of Bank of Baroda home loans is up to 30 years and the age limit is 21 to 70 years. As an NRI, the home loan eligibility is that your minimum gross annual income should be equivalent to Rs.5 lakh per annum. While the bank offers attractive home loan interest rates to both resident Indians and NRIs, its processing fee is slightly high with a minimum of Rs.8500 and maximum of Rs.25000 (on loan amounts above Rs.50 lakh).

PNB Home Loan –

PNB offers multiple home loan schemes to Indian residents, NRIs and PIOs. The maximum loan amount available is up to Rs.1 crore with no prepayment penalty on floating rate home loans. PNB home loans offer attractive repo-linked interest rates and multiple repayment options. The home loan eligibility for PNB is 18 years and the maximum is 70 years. PNB home loans offer benefits like quick approvals and interest concession to women borrowers but require a high credit score. Moreover, the maximum loan amount offered by the bank is considerably lower as compared to other banks offering loans of up to Rs.15 crore.

Indiabulls Home Loan –

Indiabulls offers home loans for purchasing a new property or renovating an existing one. It offers flexible repayment options and various home loan schemes to suit your home loan requirements. The tenure of the loan extends up to 30 years and the interest rate offered is also reasonable. However, Indiabulls home loan involves a variety of processing fee and charges such as prepayment charges, PDC/ECS dishonour charges, late payment charges, charges for the statement of amortization schedule as well as processing charges of around 1% (for loan amount over Rs.300 lakh).

Conclusion –

Like every other financial product, it is best to be acquainted with the various types of home loans offered in the market and their different interest rates. The best home loan is one which fits your long-term financial goals and offers the lowest home loan interest rate along with flexible repayment options. Ease of application is also worth paying attention to when choosing the best home loan option as it can mean lesser documentation, faster approval and better execution.

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This publication is provided for general information purposes only and is not intended to cover every aspect of the topics with which it deals. It is not intended be advice. You must obtain professional advice before taking, or refraining from, any action on the basis of the content in this publication. The information in this publication does not constitute legal, tax, investment or other professional advice from North Loop or its affiliates. We make no representations, warranties or guarantees, whether express or implied, that the content in the publication is accurate, complete or up to date. All opinions expressed do not reflect the views of North Loop nor are endorsed by North Loop.