For some, it can be a beautiful adobe providing a sense of security. For others, it can be a ticket to early retirement, irrespective of the reason, buying a house tops the priority list of every Indian and knowing that you have financial assistance to back you up will eventually take you a step closer to buying your dream home. 

In this article, I will be covering various aspects of Home Loans in India that will make your entire home loan applying process easier and faster. 

Factors to Consider When Applying for A Home Loan 


This is the amount of money you will be borrowing from the bank.


Depending on the nature of your income, you can select a feasible time duration to settle the loan amount.


In exchange for its money lending services, the bank charges interest. The rate of interest is determined by the principal amount and the duration you will be repaying the loan.

EMI Amount

EMI is a combination of principal + interest amount that you will be paying each month for the loan tenure you opt for. With each EMI, you will be paying back more of the principal amount and costs of interest will gradually reduce.

Choose a Home Loan that is Suitable for You

You will have options. Based on your requirements you can take home loans to buy a property. Here are some of the different kinds of home loans you can consider-

  • Home Purchase Loan - to buy any house or home that is within your budget
  • Construction Home Loan – to cover the costs of building a house
  • Land Purchase Loan - to buy a piece of land
  • Home Improvement Loan – to renovate and improve your house.
  • Home Repair Loan – to pay for the cost of repair and restoration of your home.
  • Home Extension Loan – to increase the amount of built-up space at your home using this loan.

Factors Determining Home Loan Eligibility Criteria 

Not everybody has the privilege to buy a house in India or anywhere across the globe. The approval of your home loan will be determined upon the following factors-

  • Age

To apply for a loan, you must be at least 21 years of age, and the final EMI repayment age for certain banks must not exceed 65 years. In your 20s or 30s, your chances of receiving a Home Loan are better since you've established a stable profession and have the financial means to repay such high-value, long-term loans. You may need to make a larger down payment or pay a higher EMI if you're in your 40s.

  • Credit score

Your credit score helps the bank in determining how you spend money and your income-to-credit ratio, which includes how frequently you use your credit card and whether you pay your credit card bills on time, whether you are repaying your other existing loans regularly. 

To qualify for a low-interest Home Loan, you need have a credit score of at least 775 points out of a possible 900. If your credit score is in the 701-774 range, the bank may approve your loan request, but you may be charged a higher interest rate.

  • Income

Another important factor in evaluating home loan eligibility is income. Banks set a minimum income requirement to guarantee that you will be able to repay the loan. To confirm your eligibility, you will be asked to provide documentation such as  salary slips and other paperwork.

  • Employment Stability 

Your work experience would increase your home loan approval chances. It is important for the salaried loan applicant that he/she must be employed for at least 2 years. Whereas if the applicant is self-employed then he/she must have experience of more than 5 years for processing of loan application.

Increase Your Home Loan Eligibility

To sanction your home loan in one go, it’s best to do some extra preparations. Following would surely help you earn some brownie points-

Repay Any Existing Loans You May Have

Applying for a new loan along with an existing loan would negatively impact your credit score will suffer. It is preferable to pay off your present loans before applying for a new loan. Repaying existing loans indicates to the bank that your a credit-worthy candidate.

 Apply Jointly With A Co-Applicant

When you apply for a house loan with a co-applicant, the bank takes both of your incomes into account. It also looks into both applicants' credit scores and payback history. Your eligibility will be increased if both of you maintain a good credit score. 

Opt For A Longer Tenure Home Loan

A higher tenure allows you to repay the loan in smaller EMIs.  It also assures the bank that you will be employed for a longer period, enabling on-time EMI payments.

Best Banks to Get Your Home Loan

State Bank of India

Rate of interest on home loans

Best rate*

Highest rate*

For salaried individuals



For self-employed individuals

7.10 %


Longest tenure: 30 years

Processing fees: 0.35% of the loan amount (min. Rs.2,000; max. Rs.10,000)


Rate of interest on home loans

Best rate*

Highest rate*

For salaried individuals



For self-employed individuals



Maximum tenure: 30 years

Processing fees: Up to 0.50% of the loan amount or Rs.3,000, whichever is higher.


Rate of interest on home loans

Best rate*

Highest rate*

For salaried individuals



For self-employed individuals



Maximum tenure: 30 years

​Bank of Baroda 

Processing fees: 0.50% of the home loan amount

Rate of interest on home loans

Best rate*

Highest rate*

For salaried individuals



For self-employed individuals



Maximum tenure: 30 years

Processing fees: Bank of Baroda processing fees is 0.25% to 0.50% of loan; Min. Rs.8500- Max. Rs.25000

Punjab National Bank

Rate of interest on home loans

Best rate*

Highest rate*

For salaried individuals



For self-employed individuals



Maximum tenure: 30 years

Processing fees: Up to 0.35% of the loan amount (Min. Rs.2,500 & Max. Rs.15,000)

Checklist of Documents Required for Home Loan

  • Completed Home Loan Application Form
  • Passport size Photographs
  • Proof of Identification (Anyone of the following): PAN Card, Passport, Aadhaar Card, Voter’s ID Card, Driving License
  • Proof of Age (Anyone of the following): Aadhaar Card, PAN Card, Passport, Birth Certificate, 10th Class Marksheet, Bank Passbook, Driving License
  • Proof of Residence (Anyone of the following): Bank Passbook, Voter’s ID, Ration Card, Passport, Utility bills (Telephone Bill, Electricity Bill, Water Bill, Gas Bill), LIC Policy Receipt
  • Letter from a recognized public authority verifying the customer’s address
  • Income Documents

For Salaried Individuals:

  1. Form 16
  2. Certified letter from Employer
  3. Pay slip of last 2 months
  4. Increment or Promotion letter
  5. IT returns of past 3 years
  6. Investment proofs (like fixed deposits, shares, etc.) 

For Self Employed:

  1. Income Tax Returns (ITR) of last 3 years
  2. Balance Sheet and Profit & Loss Account Statement of the Company/Firm (duly attested by a C.A.)
  3. Business License Details (or any other equivalent document)
  4. The license of Professional Practice (For Doctors, Consultants, etc.)
  5. Registration Certificate of Establishment (For Shops, Factories & Other Establishments)
  6. Proof of Business Address
  • Property Documents 
  • NOC from Society/Builder
  • A detailed estimate of the cost of construction of the house
  • Registered Sale Deed, Allotment Letter or Stamped Agreement of Sale with the Builder (original document)
  • Occupancy Certificate (in case of ready-to-move-in properties)
  • Property Tax Receipts, Maintenance Bills and Electricity Bills
  • Receipts of the advance payments made towards the purchase of flat (original document)
  • An approved copy of the building plan (key plan/floor plan in case of purchase of flats)
  • Original of the land tax paid receipt and possession certificate as issued by the revenue authority
  • Payment receipt or bank account statements showing payments made to the builder or seller

Tips to Consider When Applying for Home Loan

  • Since a house loan is a long-term commitment, be sure you know how much you can pay in EMIs. To figure out how much you can afford as a house loan EMI, deduct all of your expenses from your take-home income, including other loans and credit card payments.
  • Apply for a home loan at a bank where you already have a bank account, such as a savings or salary account. If the bank already has your credit history and personal information (employment, income, etc. ), the Know Your Customer (KYC) procedure will take lesser time.
  • Ensure having a good repayment record and high credit scores as banks may offer faster approval along with flexible repayment schedules or a lower interest rate on the home loan.
  • Ensure that the project where you are buying your house has all regulatory and environmental clearances in place. Check if your project is approved by your bank. 
  • If you need a higher loan amount but your salary does not permit it, take a joint loan with your spouse/parent/sibling. You could also opt for a longer tenure loan. A longer repayment period means a lower EMI and thereby a lesser burden on your monthly finances.

Dos and Don’ts While Applying for Home Loan


  • Research about the home-property price, builder’s background, clearances for the project, etc. Also do your research about the home loan - interest rate, processing charges, repayment schedule, etc. 
  • Take time to improve your credit history, before you apply for a home loan as there are chances that the bank may offer you better terms and conditions

Don’ts - 

  • Apply for loans on multiple aggregator websites as it indicates you are loan hungry and may reduce the chances of your application being approved
  •  Take too many loans before you apply for a home loan-such as a personal loan or auto loan. As home loan amounts are big-ticket loans this will impact your eligibility.
  •   Take a huge loan as you may find it difficult to repay. Affordability is key when it comes to home loan

Tax Benefits on Home Loan

While a housing loan can help you get a house for yourself, it can also turn out to be an expensive affair. However, with various tax benefits offered by the government you surely save money every year. 

The following table gives you the tax benefits under the corresponding sections of the Income Tax Act, 1961.

Income Tax Act

Maximum Deductible Amount

Section 24

Rs.2 lakh per annum

Section 80C

Rs.1.5 lakh per annum

Section 80EE


Tax Benefits under Section 80C 

  • For both self-occupied and let-out properties, you can claim up to a maximum of Rs.1.5 lakh every year from taxable income on principal repayment. Stamp duty and registration charges may be included in it. However, it can be claimed only once.

Tax Benefits under Section 80EE

  • Claim a deduction of up to Rs.50,000 per financial year. You can continue to claim this deduction until you have fully repaid the loan.
  • First-time home buyers can claim an additional Rs.50,000 on the payable interest every financial year.

Tax Benefits under Section 24 

  • Enjoy maximum deductions of up to Rs.2 Lakh on the interest amount payable
  • These deductions apply only on the property whose construction is finished within 5 years. If it doesn't finish within this time frame, you can claim only up to Rs.30,000

Other Conditions to Note: 

  •  The tax exemption is applicable only when construction of the property is complete, or you purchase a ready-to-move-in house. 
  • . Enjoy these tax benefits on home loans every year and save significant amounts.
  •  If you sell off the property within 5 years of its possession, the claimed benefits shall get reversed and added to your income 
  •  You may purchase the property and let it out on rent. In that case, no maximum amount is applicable to claim as home loan tax exemption
  •  When availing the home loan, if you continue to rent another house where is presently reside you can claim tax benefits against HRA as well.

Deduction for Joint Home Loan

If the housing loan is availed by two or more persons, each of them is eligible to claim a deduction on the interest paid up to Rs.2 lakh each. Tax can be deducted on the principal paid as well for an amount up to Rs.1.5 lakhs each. However, all the applicants should also be co-owners of the property to claim this deduction. Therefore, a joint home loan can give you greater tax benefits.

How to Calculate Tax Benefits on Home Loan?

The easiest way to calculate your tax benefits on a home loan is by using an online calculator. Simply enter your home loan details and click on calculate and a detailed tabulation will pop up. The details you will generally need are:

  • Loan Amount
  • Tenure
  • Interest Rate
  • Loan Start Date
  • Gross Annual Income
  • Existing Deduction Under 80C/D

How to Claim Tax Benefits on Home Loans?

Claiming tax benefits on a home loan is a simple process. Below are the steps to claim your tax deduction.

Step 1: Calculate the tax deduction to be claimed.

Step 2: Ensure that the house is in your name or you are the co-borrower of the loan.

Step 3: Submit your home loan interest certificate to your employer to adjust the tax-deductible at the source.

Step 4: In case you don’t perform the above step, you would have to file the tax return by yourself.

Step 5: In case you are self-employed, you are not required to submit these documents anywhere. Just keep them handy in case the IT department raises queries in the future.

Home Loan Benefits For Women In India

Relatively Lower Interest Rate

Women home loan borrowers usually have a better credit history and are profiled as more trustworthy by the lenders. This is why women are eligible for lower interest rates on a variety of financing products, including house loans.

PMAY Scheme

After the government initiative of ‘Housing for All’, the benefits offered to women applying for affordable housing loans have increased. The government has made it essential for women to take advantage of a Rs. 2.67 lakh interest subsidy. 

Women are given priority under this plan and are able to apply for home loans without suffering prejudice. Women of all ages, social levels, and marital status gain financial independence, bringing them closer to equality.

Access to higher loan amount & extended tenure

Another perk of a home loan for women is that they are eligible for a higher loan amount and a longer repayment. Typically, banks expand house loan qualifying requirements to attract women customers, such as giving loan amounts ranging from Rs.30 lakh to Rs3.5 crore with a payback term of up to 25 years. 

Most state governments have mandated that stamp duty for women homeowners be reduced by 1% to 2%, resulting in a significant reduction in the overall cost of the property. Women have been encouraged to buy homes in India as a result of this action.​