How Does Lowest Home Loan Interest Rate Affect You?

A normal shopping or purchase hampers your monthly budget, a loan has the same effect on your pocket for years not for months. To avoid that, lowest interest rate is the savior.

Thus, choosing or getting the lowest interest rate for your home loan would not have a bad impact on your pocket and expenses.

In India, recently almost all the top lenders have increased their home loan interest rates. This happens everytime bank increases MCLR or spread and also when RBI increases its repo rate. The increase in rate of home loans comes from here.

So, to be able to lessen its impact, you can compare the home loan details at different banks. The eligibility criteria and documents are almost similar at all banks/NBFCs but interest rates vary. The list of banks which are currently offering home loans are given in this article:

Top banks offering lowest home loan interest rate

1. Axis Bank            8.50%-8.75%

2. Bajaj Finserv            8.60%-10%

3. Bank of Baroda 8.55%-9.55%

4. Bank of India             8.70%-8.75%

5. Canara Bank            8.65%-8.85%

6. Central Bank of India 8.50%-9.50%

7. Citibank            8.85%-9.60%

8. DHFL                        9.05%-9.95%

9. HDFC Ltd            8.70%-9.40%

10. ICICI Bank            8.85%-9.10%

11. Indiabulls            8.70%-9.45%

12. Kotak Mahindra Bank 8.65%-8.75%

13. LIC Housing Finance Limited 8.60%-8.95%

14. PNB HFL                         8.99%-10.75%

15. Punjab National Bank     8.65%-8.90%

16. State Bank of India(SBI) 8.65%-9.20%

17. Yes Bank                       9.35%-10.50%

18. Reliance Home Finance 8.75%-10%

Documents required for home loans

The list of documents required for the loan application are as follows:

For Salaried:

• Duly filled loan application

• 3 recent passport size photographs

• Identity proof (Voter ID card/Passport/ Driving license/IT PAN Card)

• Residential proof

• Proof of business address for non-salaried individuals

• Bank statement/Pass Book of last three month

• Signature identification from present bankers

• Personal Assets and liabilities statements

• Original salary certificate from employer

• TDS certificate on Form 16 of IT return for last two financial years

For Self-employed:

• Duly filled loan application

• 3 recent passport size photographs

• Identity proof (Voter ID card/Passport/ Driving license/IT PAN Card)

• Residential proof

• Proof of business address for non-salaried individuals

• Bank statement/Pass Book of last three month

• Signature identification from present bankers

• Personal Assets and liabilities statements

• Acknowledged copies of three years IT return/Assessment orders

• Photocopies of challans evidencing payment of Advance Income Tax

Eligibility criteria for home loans

For Salaried:

• Your age must be between 18-70 years

• Your net annual income should be at least ₹1,20,000

• You can get loan amount up to ₹5 lakhs to ₹1 crore

• The minimum work experience required is 2 years

For Self-employed:

• Your age must be between 21-70 years

• Your net annual income should be at least ₹2,00,000

• You can get loan amount up to ₹5 lakhs to ₹2 crores

• The minimum work experience required is 3 years

Impact of lowest home loan interest rate on EMI

A home loan EMI calculator is the easiest tool that can help you calculate home loan EMI in a few minutes. This tool would take into account the basic details of your home loan which are:

• Loan amount

• Tenure

• Interest rate

Now, when you mention the above details in the calculator, it would give you the data of the EMI, the total interest outgo, and the total amount (principal+interest). Here is an example with the loan amount ₹20 lakhs with the tenure of 15 years and interest rate of 8.35% p.a.

EMI: ₹19,519

Total interest outgo: ₹15,13,480

Total amount: ₹35,13,480

Here is the formula to calculate the EMI or equated monthly installment:

E= P.r. (1+r)*n/((1+r)*n -1)

Where,

E=EMI

P=Principal loan amount

r= Rate of interest on monthly basis (r= Annual rate of interest/12/100)

n=Loan tenure