Best Banks for Home Loans in India
Searching for home loans is not an easy job. With many banks advertising their offer is the best deal in home loans, it may get confusing to choose a lender bank. Factors like, the interest rate applicable for the home loans, applicable processing fee, legal fees if any, charges for preclosure, part-payment regulations applicable, etc., help decide which bank is the best. Depending on the factors which apply to your economic background, choose the bank which offers the best deal. The list below gives information about the three best banks and what they offer you in a home loan.
ICICI Home Loan
If you are the kind who is bothered about documentation hassles in home loan plans covering home renovation, top-up, home buying, or construction. Choose ICICI bank which has the simplest documentation procedure. Approvals are also faster and interest rates may not be the lowest but are competitive when compared to the rest.
The principal is calculated each month and interest is applied to it. They offer both floating and fixed rates and are ready to finance up to 90% of the LTV for loan value below 20Lac. It is 75% for loan amount exceeding 75Lac. ICICI does not charge for part-payments and preclosure if you avail floating rate loans. In case of floating rate loan, you may choose to keep it fixed for first 24 or 36 months. They allow a maximum tenure of 30 years. The fixed interest rate is between 9.9% to 10.25%, while the floating interest rate is 9.15% to 9.6%. The maximum processing fee is 1.00% percent of the loan amount or Rs. 1500(or 2000). ICICI offers a reduced interest rate to women. Also, you can include your non-working woman partner as co-borrower to avail this reduced home loan rates. Minimum part-payment must equal one EMI. The staff offers door-step services free of cost.
The only disadvantage with ICICI home loans is that once EMI scales up, it does not decrease even after making considerable part-payment.
State Bank of India Home Loan
If you are the kind who wants to be sure of the property papers and want a proper legal opinion then go for the SBI home loan. The floating rate home loans cover home buying, top-up, renovation and construction. SBI is known for stringent verification procedures for property and lowers home loan rates.
The principal amount is recalculated every day and interest applied to it. Unlike ICICI where the part-payment reduction in principal amount is updated on the first of every month, it updates the very next day. The floating interest rate offered is between 8.7% to 9.1%. The maximum processing fee is Rs. 10,000. They allow a loan duration of 30 years. There are no preclosure charges or part-payment charges. LTV is 90% of the loan amount below Rs. 20 Lac, and 80% above 20 Lacs. The SBI Max Gain scheme allows you to link surplus savings account to the loan account. The amount in the savings account is reduced from the principal and interest applied to the new reduced principal amount. Max Gain Loan, called as the Overdraft loan is offered at a reduced interest rate in between 8.75% to 9.45%.
The only problem with SBI home loans is the process very slowly as they follow stringent property verification measures.
HDFC Home Loan
If you want a more flexible way of repaying your loans, i.e, increase or decrease your EMI because you are expecting a promotion or retirement in near future, HDFC home loans offer a variety of floating rate home loans for as long as 30-year duration. They cover home loans for home buying, renovation or construction or home extension.
HDFC is also popular for stringent paper verification process for a property but allows an easy and convenient door-step service to ease the documentation process. The maximum processing fee is Rs. 3000 or 0.5% of the loan amount. HDFC allows a TruFixed interest rate where the applicant may fix the interest rate for the first 24 months. The interest rates applicable for TruFixed plans range between 9.35% to 10.05%. The Floating interest rates applicable are between 8.8% to 9.55%. Pre-closure charges of 2% are applicable if the loan is paid using refinancing. LTV is 90% for a loan amount of less than 20 Lac and 75% for a loan amount of more than 75 Lac. There are no part-payment charges for the loans.
HDFC offers a variety of plans to repay your loan faster.
Accelerated Repayment Scheme (ARS), FLIP(Flexible loan instalments plan), SURF(Step-up repayment facility), Tranche based EMI, Telescopic Repayment Option (TRO). ARS allows you to increase your EMIs according to your increment in salary thereby paying your loan faster. FLIP is for people whose retirement is near. It allows you to pay higher EMIS initially and decrease it accordingly. SURF is again a scheduled repayment which is aligned to your income growth. Tranche based EMI allows you to pay full EMIs for the total loan amount even if you have purchased an under-construction project where the loan is disbursed in stages. TRO allows you to lengthen your loan tenure to as long as 30 years which reduces the EMIs considerably.