Best Home Loans To Look Forward To In 2024 – Forbes Advisor INDIA

Financial institutions offer 75% to 90% financing of the price of a plot of land to construct a house, buy  constructed residences, or refurbish the existing ones. Choosing a home loan can be a daunting task as the interest rate on home loans can differ among banks as per the income of the individual, downpayment, collateral, credit worthiness, loan tenure, to name a few.

Here are the best offerings in the home loan segment to look forward to in 2024.

J&K Housing Loan 

Jammu and Kashmir Bank provides up to 90% of housing financing depending on your repayment capacity. The interest rate varies as per your creditworthiness, which starts from 8.75% to 9.30% for salaried individuals and 8.85% to 9.85% for non-salaried. This rate varies as per the loan tenure starting from one year to 30 years. However, you can choose to close the loan before the tenure ends, without paying an additional cost. There’s also a moratorium peri of three to 24 months given as per the nature of the home loan.

The bank also provides a joint home loan, and the credit score of the highest contributor to the EMI is considered. Remember, there’s a 0.25% of the total home loan as processing charge, and inspection fee of INR 500 plus GST is applicable. Women borrowers can get up to 50% rebate on processing fees.

BOI Star Home Loan

Bank of India’s Star Home Loan is available for resident and non-resident Indians (NRIs), as well as the person of Indian origin (PIO), for the purpose of purchasing a plot of land on the condition that a house will be constructed within five years. You can get a maximum loan up to 90% of the market value, with repayment tenure up to 30 years, and up to three years of moratorium period. 

Both salaried and non-salaried borrowers with a cibil score of 825 and above can avail of BOI’s star home loan at an interest rate starting from 8.30%. Lower the cibil score, higher your interest rate will be on your home loan. The bank isn’t charging processing fees until the end of 2023. There is also a free accidental coverage of up to INR 5 crore. On the downside, the loan may not be available in all districts of India.

Cent Home Loan

The Central Bank of India provides housing loans based on EMI/NMI ratio, of which the maximum value of the equated monthly installment is fixed post deduction of income tax on your monthly salary and the remaining net monthly income (NMI). For instance, if your net monthly income is INR 10 lakhs and above per annum, your maximum EMI/NMI ratio will be 66.67%. For a person earning a salary of five to eight lakh, their EMI/NMI ratio is fixed at 60%.

The rate of interest on your home loan is based on your credit score, ranging from 8.50% to 9.50%. You get a moratorium period of six months to four years, depending on the nature of the home loan. Remember, there are various additional charges involved in Cent Home Loan such as 0.50% processing fees, INR 1,300 as documentation charges, as well as API integration charges of INR 81 plus applicable GST. 

HDFC Bank Home Loan

HDFC Bank provides home loans to eligible salaried and self-employed borrowers, with interest rate starting from 8.50% to 9.40%. The maximum financing you get depends on the loan amount. For instance, you get 90% financing of the property cost if you apply for a loan up to 30 lakh, 80% for 30 lakh to 75 lakh, and 75% for loans above 75 lakh.

The bank undertakes a strict procedure to verify your documents submitted as proof of residence, identity, and income, as well as documentation required for purchase of constructed property, constructing a new home, etc. Then there are charges including processing fees ranging from 0.50% to 2%, and other charges such as incidental charges, stamp duty, etc. Remember, the bank also charges a pre-payment and pre-closure penalty of 2.5% plus GST on the remaining balance.

LIC Griha Suvidha Home Loan

LIC Griha Suvidha Home Loan is popular among low-to mid-income earning individuals for its mortgage guarantee backed housing loan where legal agreement is reached between the parties against the title of the debtor’s property. The company charges 8.75% interest rate on loans starting from INR 10 lakh up to 2 crore, and 9.05% on loans up to  INR 3 crore. The interest rate on loans above 3 crores is subject to your relationship with the company. Processing fees vary as per the home loan amount, which can range from INR 15,000 to INR 50,000 plus applicable GST.

Maha Super Housing Loan Scheme

Maha Super Housing Loan Scheme provides you up to 90% financing depending on the amount, which is 90% for the home loan up to INR 30 lakh, 80% for INR 75 lakh, 75% for INR 75 lakh and above. The interest rate varies as per your credit score, which is 8.50% to 10.40% for salaried borrowers, 8.60% to 10.90% for non-salaried. Women borrowers, however, can avail of a concession of 0.80% on interest rate provided that their credit score is below 725 slab. 

There’s also 0.10% concession for home loans taken for the construction of green buildings that are environmentally friendly. The bank’s home loan processing fee is 0.25% of the loan amount, however, this charge is waived for salaried employees working in a government sector. On the downward side, the minimum home loan tenure is subject to 15 years. The bank hasn’t clarified their charges on pre-payment and pre-closure of the home loan.

Bottom Line

Before applying for a home, make sure that document, especially pertaining to the property, is up to date, valid, and legit. Financial institutions will assess your documents including proof of identity, income, and residence to check your eligibility as accordingly sanction the loan amount plus applicable interest rate. It would be prudent to compare features, rates, eligibility criteria, concessions, offers, as well as LTV and EMI/NMI ratio, and if any charges are applicable for pre-closure of the loan.