What is a Home Loan?
A home loan is a financial product offered by banks and housing finance companies that allows individuals to buy, build, or renovate a house by borrowing money. The borrowed amount is repaid in EMIs (Equated Monthly Installments) over an agreed tenure, which can range from 10 to 30 years. The loan amount depends on your income, credit score, and the property value.
Benefits of a Home Loan
Buy Your Dream Home Sooner – No need to wait for years to save money.
Easy EMIs – Flexible repayment over a long tenure makes it affordable.
Tax Savings –
Under Section 80C: Deduction up to ?1.5 lakh on principal repayment.
Under Section 24(b): Deduction up to ?2 lakh on interest paid.
Low Interest Rates – Home loans generally have lower interest rates compared to personal loans.
Property Appreciation – Value of property usually increases over time.
Balance Transfer Facility – Switch to a different lender for a lower interest rate.
Joint Loan Advantage – Add co-applicant to increase loan eligibility.
Builds Credit Score – Timely repayments improve your credit profile.
Flexible Tenure – You can choose a repayment period as per your comfort.
Sense of Ownership – Gives long-term financial security and stability.
Eligibility Criteria
Common eligibility factors include:
Age:
Salaried: 21–60 years
Self-Employed: 21–65 years
Income: Minimum ?20,000/month (varies by bank).
Employment:
Salaried: 2–3 years in job
Self-Employed: 3+ years in business
Credit Score: Ideally 700 or above.
Property Approval: Must have legal clearance.
Loan-to-Value Ratio: Banks finance up to 75–90% of property cost.
Documents Required
For Salaried Applicants
ID Proof: Aadhaar, PAN, Passport, Driving License.
Address Proof: Utility bills, Passport, Voter ID.
Income Proof:
Salary slips (last 3–6 months)
Bank statements (last 6 months)
Form 16 / ITR
Property Papers: Sale agreement, title deed, approved plan.
Photographs (passport size).
For Self-Employed
All ID and address proofs as above.
Business Proof: GST certificate, Shop Act license.
Financial Documents:
Last 3 years ITR
Profit & Loss statement and balance sheet (CA certified)
Bank statements (last 12 months)
Property Documents as above.