Interest Rate is the cost of borrowing money and is calculated as a percentage of the amount borrowed. Interest rates may vary from bank to bank. As a borrower, you should try to choose a lender that offers a home loan at the lowest interest rate for your specific requirements.

There are two types of home loan interest rates you can choose from:

Fixed Interest Rate: This type of interest rate remains unchanged throughout the loan tenure. Thus, your EMI also remains the same. Choosing Fixed Interest Rate Loan is better if you expect the rates to increase in the future.

Floating Interest Rate: This type of interest rate keeps changing in line with the market rates. Thus, your EMI also keeps fluctuating. Floating interest rate loans are better if you expect interest rates to go down in the future.

• *Home Loan interest rates updated on 7 Dec 2020.
• *The interest rates mentioned above are subject to change at any time without prior notice.

There are various ways you can reduce your home loan interest and EMI payments.

Choose a shorter tenure: When you choose a shorter tenure home loan, though the EMI is higher, your overall interest payment is reduced drastically.

Apply for a Balance Transfer Loan: With a Balance Transfer home loan, you can transfer your existing home loan to another lender that is offering lower interest rates.

Make loan prepayments: In the initial years of home loan, you pay more towards the interest and less towards the principal amount. Therefore, if you make prepayments regularly, you can reduce your interest burden.

Choose the right EMI calculation method: There are two ways banks can calculate your EMI: Flat Rate method and Reducing Balance method. Under the Flat Rate method, the interest is calculated on the original loan amount for the entire tenure; thus your interest outgo remains equal throughout the tenure and doesn't decrease as the principal amount reduces. However, in the latter method, the interest is calculated and revised every month based on your outstanding principal amount.

All the borrowers are required to meet certain eligibility criteria to get their home loan approved. If you don't meet any of the eligibility criteria set by the bank, your application may get rejected. Understanding the home loan eligibility criteria can help ensure a smooth approval process for you.

Here are some of the key factors that may affect your home loan eligibility:

Age: It's one of the most important factors to determine the home loan tenure. For instance, getting a home loan with 30-year tenure is easier for a young individual compared to an aged individual.

Income: Whether you are a salaried or self-employed individual, you must meet the minimum income requirement set by the banks. The income requirement may vary from bank to bank.

CIBIL Score or Credit Score: This score is used by lenders to determine your creditworthiness. Higher the score, the better the chances of loan approval. A CIBIL score of above 550 and near 900 is generally considered good. However, if your CIBIL score is not good, you can still apply for a home loan.

Employment/ Business type: Lenders also consider your job type or business type to determine your eligibility. Applicants with a stable job or business income have a higher chance of getting the loan approved.

Check out some of the key home loan eligibility criteria set by major lenders in India:

• *Home Loan interest rates updated on 7 Dec 2020.
• *The interest rates mentioned above are subject to change at any time without prior notice.

For successful and faster processing of your Home Loan, you need to furnish a list of documents. Although the complete list of documents required may vary from bank to bank, there are certain documents that are generally required to be submitted with the application.

In order to make your experience hassle-free, here's a document checklist for you:

1. 1. Fully completed application for Home Loan
2. 2. Loan applicant's Passport size photographs
3. 3. Identification Proof (Any of them)
   • Driving License
   • Passport
   • Aadhar Card
   • Voter I Card
4. 4. Age Proof (Any of them)
   • PAN Card
   • Passport
   • Driving License
   • Birth Certificate
   • 10th class Marksheet
   • Bank Passbook
5. 5. Residence Proof
   • Utility Bill (Electricity, Telephone, Water, Gas Bill/Slip)
   • Aadhar card
   • Voter ID card
   • LIC Policy slip
   • Ration card
   • Letter of Public authority verifying the applicant's address
6. 6. Proof of Income
   • (For Salaried Applicants)
   • Last 2 Months Payslip
   • Form 16
   • Increment or Promotion Letter
   • IT returns of the last 3 years
   • Investment proofs such as Fixed Deposits, Shares, etc.
   • (For Self-employed)
   • Business License details (or any other equivalent document)
   • Last 3 years IT returns
   • Balance Sheet & Profit and Loss Statement of Firm/Comapny (attested by a CA)
   • Professional Practice License (For Doctors, Lawyers, Consultants, etc.)
   • Registration Certificate of Establishment (For Shops, Factories, etc.)
   • Proof of Business Address

1. 1. Occupancy Certificate
2. 2. NOC from Builder/Society
3. 3. Registered Sale Deed, Stamped Agreement of Sale or Allotment Letter obtained from the Builder(original copy)
4. 4. A detailed estimate of the construction cost of the House
5. 5. Receipts of:
   • Advance payments made towards the purchase of flat (original copy)
   • Payment or bank account statements showcasing payments made to the Builder or Seller
   • Land tax/Property Tax
   • Possession certificate issued by the revenue authority (Original copy)
6. 6. Copies of Maintenance and Electricity Bills
7. 7. An approved copy of the building plan (key plan/floor plan in case of purchase of flats)

As the name suggests, prepayment signifies the early payment of a Home Loan before its maturity. For e.x. If you have got a big amount in your hand and you want to use it to ease your liability then you can use the prepayment option. This will eventually reduce the tenure or the EMIs to be paid.

It is a tool that you can use to determine the impact of home loan prepayment. A prepayment usually helps reduce your EMI or tenure or both. With this calculator, you can figure out how much you will save by reducing the tenure.

You can easily use the Home Loan prepayment calculator on Magicbricks by following these steps:

• 1. Enter the required details including:
• a. Loan amount
• b. Tenure
• c. Rate of Interest
• d. Installments paid
• e. Prepayment amount
• f. Once you enter such details, click "Calculate".
• 2. After that, the calculator will tell you:

  EMI Savings: Amount you have saved on your EMI by reducing it and monthly EMI
  savings using prepayment option.

  Tenure Savings: Reduction in the Tenure of loan as a part of the prepayment option.

Home Loan Balance Transfer is the process in which a loan borrower can easily transfer his/her outstanding principal amount to another bank or financial institute to get a better rate of interest as well as better features. The entire process of Home Loan Balance Transfer helps in saving the extra amount to be paid on the interest rates.

To become eligible for Home Loan Transfer, you need to fulfill the below criteria:

1. 1. Your Property should be ready-to-move-in or already occupied
2. 2. You have already made the payment for at least 12 months EMIs
3. 3. There are no outstanding dues on your existing loan.

You need to get these documents ready before applying for a Home Loan Balance Transfer:

A letter which is issued by your current bank in which the outstanding principal amount will be mentioned so that you can carry forward from the same amount when you transfer your loan to the new bank.

Other documents:

1. For Salaried:
2. 1. Identity Proof
   (Aadhar Card, PAN Card, Voter ID Card, Driving License, NREGA card, etc.)
3. 2. Address Proof
   (Passport, Aadhar Card, Ration Card, Voter ID Card, Driving License, Electricity/Water Bill, etc.)
4. 3. Form 16 or recent salary payslips(last 3 months)
5. 4. Bank account statement(last 6 months)

1. For Self-employed
2. 1. Identity Proof
   (Aadhar Card, PAN Card, Voter ID Card, Driving License, NREGA card, etc.)
3. 2. Address Proof
   (Passport, Aadhar Card, Ration Card, Voter ID Card, Driving License, Electricity/Water Bill, etc.)
4. 3. Copy of last year's Income Tax return
5. 4. Previous years' Balance Sheet and P&L statement
6. 5. Copy of registration of the business

Processing fee is a one-time fee charged by lenders for processing your loan application. This fee generally varies from bank to bank and is mostly charged after your home loan application is approved.

The fee is generally calculated as a small percentage of the loan amount. Check out the table below to know more about home loan processing fees charged by various banks and financial institutions in India:

• *Home Loan interest rates updated on 7 Dec 2020.
• *The interest rates mentioned above are subject to change at any time without prior notice.

Most banks charge a processing fee in the range of 0.5% - 1% of the loan amount. However, certain lenders offer processing fee waiver from time to time. You can check with your lender about such offers before you apply for a loan. Please know that even if your processing fee is waived, you may still have to pay other charges involved.

If you have applied for a home loan, you can check the status of your application through any of the following methods:

Call Customer Care: You can call up the customer service department of the bank to check your application status. The customer support executive might ask for your application ID/ reference number.

Visit the bank branch: You can also visit the bank branch to check the status of your application.

You can also check the status of your application through the bank's website. No matter where you are, simply visit the website and enter the required details like your phone number to know the application status. Some banks might also ask for your Application ID or Reference number along with your Date of Birth.

Getting a Home Loan often turns out to be an expensive affair but if you are well-informed, a lot of your money can be saved through tax rebates as per Income Tax Act, 1961. Also, in the recent financial budget of 2020, the government has continued to extend tax benefits on home loans. So, let's have a look in detail on how to take the optimum advantage of tax benefits on a Home loan.

According to the Income Tax Act, 1961, you can avail tax benefits under:

• - Rs 1.5 lakh rebate on the principal amount of the Home Loan inclusive of stamp duty and registration fees (for a self-occupied and rented property).
• - You can claim the deduction once you have completed the construction.
• - You can't sell your property for the next 5 years to claim the deduction.
• - In case, you sell the property within the 5 years, the deduction claimed will be automatically revoked at the time of selling it.
• - In case of co-owners or co-borrower, each can claim deduction on the principal amount, upto a maximum of Rs 1.5 Lakh.

• - You can claim a deduction of upto Rs 2 lakhs on your home loan interest if you're residing in that particular property. If you are living in a rented house, the entire interest is waived off.

• - The loan must be sanctioned between 1st April 2016 and 31st March 2017
• - If you are buying the house for the first time, you can avail an extra benefit up to Rs 50,000 on the interest amount.
• - Your property is valued less than Rs 50 Lakh.
• - The loan amount taken should not exceed Rs 35 Lakh

Here you will know about the yearly rebates on the interest paid on the Home Loan

• - You can claim a rebate of Rs 2 Lakh for a self-occupied home. You can claim this amount only if you complete the construction within 5 years. In case, you fail to do so, you will only get the rebate of Rs 30,000 only.
• - If your property is rented, you can claim any amount you paid as interest as there is no limit of it.
• - In the case of co-owners or co-borrower, each can claim up to a maximum deductible amount
• - If your property is on rent, you can claim any amount spent as interest irrespective of its completion or not.

Getting a home loan has become very easy these days. In fact, you don't even have to step out of your home to apply for a home loan. With new and advanced home loan portals like Magicbricks Home Loans, you can easily compare home loans right on your smartphone & apply online in just a few minutes.

Take a look at some of the common steps involved in getting a home loan:

This requires you to provide some basic details about yourself as well as the property you're buying. You can fill the application form online or you can visit a bank branch as well.

Once you submit your application along with the supporting documents, the bank will verify all the documents to make sure you're a genuine borrower. In addition, most lenders also conduct a background check to ensure your creditworthiness.

Once the bank has verified all the details, it starts your home loan process. At this stage, you will have to pay a processing fee. It's a one-time fee charged by most lenders for processing your application. It generally ranges from 0.5% to 1% of loan amount.

At this stage, the bank decides whether you approve or reject your application. The decision is made after carefully considering various factors, including your age, income, employment, credit score, etc. It also involves determining loan amount to be approved and the rate of interest.

Once your loan is approved, you will have to submit your property's original documents to the bank. The lender keeps the documents until you repay the loan in full.

Finally, the bank disburses the loan amount following registration of the loan deal. The amount is deposited into your account.

Banks and financial institutions offer different types of home loans for your unique requirements. Check out some of the popular types of home loans available in India:

Most commonly available, this loan is offered by banks for purchase of residential property, including flats, apartments, villas, etc. Banks offer a maximum home purchase loan of upto 90% of the property's market value.

Also known as Plot Purchase Loan, this home loan is available for purchase of land or plot for either construction or for investment purpose.

If you already own land, you can avail home construction loan to pay for the cost of construction of your new home. The loan amount is approved based on the estimated cost of construction.

This loan is generally available for making renovations or repairs to an existing residential property.

This home loan is preferred when you are planning to expand your home, including adding extra rooms or making any alteration to the existing structure.

This loan helps you transfer your existing home loan from one bank or financial institution to another. Balance Transfer home loan allows you to take advantage of lower interest rates offered by the new lender.

This is generally availed by those who need immediate funds for down payment of the new home. These individuals usually pay for the new home by selling their existing property.

Pradhan Mantri Awas Yojana CLSS is a subsidy scheme launched by the Ministry of Housing & Urban Power Alleviation (MoHUA) to promote 'Housing for All' mission. The scheme caters to the housing needs of:

• - Economically Weaker Section (EWS)
• - Low Income Group (LIG)
• - Middle Income Group 1 (MIG 1)
• - Middle Income Group 2 (MIG 2)

Under this scheme the Govt. provides subsidy on home loan interest rates to the people falling in the above-mentioned categories. The benefits of this scheme can be availed for the purchase of a new/resale house as well as for the construction, improvement/extension of existing Kucha/Semi-pucca houses.

To avail the subsidy under PMAY(CLSS), you need to fulfil the following eligibility criteria as per the income groups:

1. 1. Economically Weaker Section (EWS)/ Low Income Group (LIG)
   • a) Annual Income:

     For EWS - Rs 3 lakh

     For LIG - Rs 3 lakh to Rs 6 lakh

   • b) Woman ownership :

     The ownership of a woman has been made mandatory by the Government. Whether the house is new or existing, it should be in the name of an adult female member or in joint ownership with wife (if married). However, if the subsidy is being availed for the construction or extension/renovation of an existing Kucha/semi-pucca house. Also, if there is no adult female member in the family, then only the sole ownership of a male member of a house is acceptable.

   • c) Carpet area:

     The carpet area of a house must be:

     For EWS: Upto 30 square metres.

     For LIG: Upto 60 square metres.

2. 2. MIG (1 & 2)
   • a) Annual Income:

     For MIG-1: Between Rs 6 lakh to Rs 12 lakh

     For MIG-2: Between Rs 12 lakh to Rs 18 lakh

   • b) Woman ownership :

     In this category, the ownership of a woman is not mandatory.

   • c) Carpet area:

     The carpet area of the house must be:

     For MIG-1: 160 square metres.

     For MIG-2: 200 square metres.

Along with the eligibility criteria, the applicant must fulfil the below conditions which are stated below:

1. 1. The beneficiary must not own any pucca house in his/her name or his/her family member's name in any part of India.
2. 2. For married couples, either spouse or both in joint ownership are eligible for a single subsidy.
3. 3. The beneficiary family have not availed benefits previously from any other housing scheme

1. 1. Once the amount of your loan is disbursed, your details will be sent to National Housing Bank (NHB) by your lender for further verification.
2. 2. After verifying the required details, the NHB will approve the subsidy to eligible applicants.
3. 3. After the approval, the subsidy amount will be disbursed to the eligible applicant's lender.
4. 4. Once the lender receives the subsidy amount, the lender will credit the amount in the applicant's account.