Home Loans in India: Everything You Need to Know
Buying a home is a dream for many Indians, and Home Loans often make this dream a reality. With rising property prices, particularly in urban centers such as Gurgaon, most buyers rely on housing finance to buy the ideal property. In this blog, we’ll take a closer look at how Home Loans work in India, what types of loans are available, eligibility criteria and tips on key loans. Home Loans are safe loans provided by banks and financial institutions that help individuals purchase, build or renovate a property. The property itself will act as collateral until the loan is fully repaid. Types of Home Loans in India1. Home Purchase LoanFor buying a new or pre-owned residential property. 2. Home Construction LoanFor constructing a house on a plot you already own. 3. Home Improvement LoanFor repairs, renovations, or upgrades to your existing home. 4. Home Extension LoanFor expanding your current home — adding a room, balcony, etc. 5. Balance Transfer LoanTransfer your existing loan to another lender with better interest rates or services. 6. Composite LoanOffered for buying a plot and constructing a home on it later. Eligibility Criteria for Home LoansAlthough criteria may vary from lender to lender, most banks consider the following: Age: 21 to 65 years Income: Minimum ₹35,000/month (varies bank to bank) Employment: Salaried or self-employed individuals with a consistent income CIBIL Score: 700+ preferred (Differ from bank to bank) Repayment Capacity: Based on income, liabilities, and existing EMIs Loan Amount & Tenure Loan Amount: Up to 80-90% of the property value Tenure: Can go up to 30 years, depending on the applicant’s profile Down Payment: Minimum 10-20% of the property value Interest RatesThere are primarily two types: Fixed Rate: Remains constant throughout the tenure Floating Rate: Changes based on market conditions Current interest rates (as of 2025): Ranging between 8.35% – 10.50% per annum, depending on the lender and applicant profile. Documents Required1. Identity & Address proof (Aadhar, PAN, Passport, etc.)2. Income proof (Salary slips, ITRs, bank statements)3. Property documents (sale deed, agreement to sell, etc.)4. Employment proof (for salaried individuals) or Business proof (for self-employed) Tax Benefits on Home LoansUnder the Income Tax Act, borrowers can avail: Section 80C: Up to ₹1.5 lakh deduction on principal repayment Section 24(b): Up to ₹2 lakh deduction on interest paid Section 80EEA: Additional benefit for first-time homebuyers (conditions apply) Tips Before Applying for a Home Loan Compare interest rates and processing fees across banks Maintain a good credit score Opt for a comfortable EMI – not more than 40-45% of your income Read the fine print for prepayment or foreclosure charges Get a pre-approved loan to streamline your property purchase Comparative Study of Home Loan Interest Rates (2025) Here’s a snapshot of current home loan interest rates (floating) offered by top banks in India as of May 2025: Public Sector Banks Bank Interest Rate (P.A.) Processing Fee State Bank of India (SBI) 8.35% – 9.55% Up to 0.35% of loan amount (max ₹10,000) Bank of Baroda 8.40% – 9.60% ₹8,500 – ₹10,000 Punjab National Bank 8.50% – 9.60% 0.35% of loan amount Canera Bank 8.45% – 9.65% ₹1,500 – ₹10,000 Union Bank of India 8.50% – 9.70% 0.50% of loan amount Private Sector Banks Bank Interest Rate (P.A.) Processing Fee HDFC Bank 8.50% – 10.00% 0.50% – 1.00% of loan amount ICICI Bank 8.50% – 10.00% 0.50% – 1.00% Axis Bank 8.60% – 10.15% ₹10,000 onwards Kotak Mahindra Bank 8.50% – 9.90% ₹10,000 or 0.50% IDFC FIRST Bank 8.60% – 10.25% 1.00% of loan amount Note: Interest rates are indicative and vary based on applicant profile, loan amount, tenure, credit score, and type of property. ConclusionA home loan isn’t always only financial product — it`s a stepping stone to proudly owning your dream home. Whether you`re buying a luxurious condo in Gurgaon or a budget flat in the suburbs, knowledge of how home loans work can save your time, money and keep away from unnecessary hassles. At Elite Gurgaon Estates, we now no longer only assist you find the best deals but additionally help you with home loans consultations thru our partner banks and NBFCs. Looking to buy your dream home in Gurgaon?Contact us today for free property consultation and home loan assistance.
