Buying a home is probably the biggest financial decision you’ll ever make. And yet, most people walk into a bank with very little clarity on what they actually qualify for, which lender suits their profile, or what the true cost of a lhomeoan looks like over 20 years.
This guide covers everything types of home loans, current interest rates, eligibility, documents, the step-by-step process, government schemes, and tax benefits. If you’re buying your first home or refinancing an existing one, start here.
Mr. Loanwala is a Udaipur-based loan consultancy with over 20 years of experience helping individuals across Rajasthan secure home loans. We work with 20+ lenders and don't charge anything for consultation our job is to match you with the right bank for your specific profile.Purchase Loan Construction Loan Renovation Loan Balance Transfer Top-Up Loan Plot + Construction NRI Home Loan PMAY Subsidy
What Is a Home Loan?
A home loan is money borrowed from a bank or housing finance company (HFC) to buy, build, or renovate a property. The property itself is held as collateral until you repay the loan in full. You repay the borrowed amount plus interest through monthly instalments called EMIs over a period of up to 30 years.
Most home loans in India today are on a floating rate basis, which means the rate moves in line with RBI's repo rate. When the RBI cuts rates (as it did multiple times in 2025), your EMI can go down or your tenure shortens. This is worth understanding before you lock in a product.
Banks typically finance up to 75–90% of the property value (called the Loan-to-Value or LTV ratio). The remaining 10–25% is your down payment, which you arrange separately. Stamp duty, registration charges, and interiors are generally not included in the loan amount.
Types of Home Loans in India
Not all home loans are the same product. Here's what each type covers:
Home Purchase Loan
The most common type. Used to buy a new flat, ready-to-move apartment, or resale house. Covers the purchase price, registration, and stamp duty in some cases. Available for both salaried and self-employed borrowers.
Home Construction Loan
If you own a plot and want to build from scratch, this is the right product. Funds are released in stages based on construction progress not as a lump sum. A detailed construction plan is required before approval.
Plot + Construction Loan
Covers both the land purchase and the construction cost in a single facility. The construction must typically begin within a defined period (usually 2 years) from the date of plot purchase.
Home Renovation / Improvement Loan
Meant for existing homeowners who want to renovate, repair, or upgrade their property. Smaller loan amounts, shorter tenure. A good option before putting a property on rent or for sale.
Home Loan Balance Transfer
Switch your existing home loan from one lender to another at a lower interest rate. Can save significant interest over the remaining tenure. Works best when 5+ years of tenure remains. A top-up loan is often available alongside.
Top-Up Home Loan
An additional loan over your existing home loan typically for any personal or business need. Rates are slightly above the home loan rate but well below personal loans. Requires good repayment track record.
NRI Home Loan
Non-Resident Indians can apply for home loans in India through NRE or NRO accounts. Additional documents are required (overseas employment proof, bank statements in foreign currency). A few lenders specialise in this category.
Joint Home Loan
Taken with a co-applicant like spouse, parent, or sibling. Increases your eligible loan amount and allows both applicants to claim tax deductions separately under Section 80C and 24(b). Recommended for larger property purchases.
Home Loan Interest Rates in India (2025–26)
The RBI cut its repo rate multiple times during 2025, bringing home loan rates to some of the most competitive levels seen in recent years. Most banks have passed on a portion of these cuts. Current rates from major lenders:
| Lender | Interest Rate (p.a.) | Loan Tenure | Max LTV |
|---|---|---|---|
| SBI (State Bank of India) | 8.50% onwards | Up to 30 years | 90% |
| HDFC Bank | 8.70% onwards | Up to 30 years | 90% |
| ICICI Bank | 8.75% onwards | Up to 30 years | 80% |
| Axis Bank | 8.75% onwards | Up to 30 years | 90% |
| Kotak Mahindra Bank | 8.75% onwards | Up to 20 years | 80% |
| LIC Housing Finance | 8.50% onwards | Up to 30 years | 90% |
| PNB Housing Finance | 8.50% onwards | Up to 30 years | 90% |
| Bank of Baroda | 8.40% onwards | Up to 30 years | 90% |
Fixed vs Floating Rate — Which Should You Choose?
Almost all home loans in India today are on a floating rate, linked to the RBI's repo rate via the EBLR (External Benchmark Lending Rate) system. This means rate changes pass through to you quickly — which is good when rates fall, less comfortable when they rise.
Fixed rate products exist but are less common. They lock in a rate for a defined period (usually 2–5 years), after which they revert to floating. If you believe rates will rise significantly over your loan tenure, a fixed component can offer some protection — but the starting rate is typically higher.
For most borrowers in 2026, floating works fine. The rate environment is stable and the RBI has signalled a measured approach to future changes.
Home Loan Eligibility Criteria
Banks look at several factors when deciding how much they'll lend you and at what rate. Here's what matters:
| Factor | Salaried Applicants | Self-Employed Applicants |
|---|---|---|
| Age | 21 to 65 years | 21 to 70 years |
| Minimum Income | ₹25,000/month (net) | ₹2.5 lakh/year (net profit) |
| CIBIL Score | 700+ (750+ for best rates) | 700+ (750+ for best rates) |
| Employment Stability | 2+ years with current employer | 3+ years of business vintage |
| Debt-to-Income Ratio | Total EMIs ≤ 50–60% of net income | Total EMIs ≤ 50% of net income |
| Property Type | Residential — completed, under construction, or plot for construction | |
Quick Eligibility Estimate Based on Salary
| Monthly Take-Home Salary | Approx. Loan Eligibility | Approx. EMI (20 yrs @ 8.75%) |
|---|---|---|
| ₹30,000 | ₹18–22 lakh | ₹15,800–19,400 |
| ₹50,000 | ₹30–38 lakh | ₹26,300–33,300 |
| ₹75,000 | ₹45–55 lakh | ₹39,400–48,200 |
| ₹1,00,000 | ₹60–75 lakh | ₹52,600–65,700 |
| ₹1,50,000 | ₹90 lakh–1.1 crore | ₹78,900–96,500 |
How to Improve Your Eligibility
- Pay off or reduce existing EMIs before applying
- Add a co-applicant with income (spouse or parent) — this can increase your eligible amount by 30–50%
- Maintain a CIBIL score above 750 — avoid multiple loan enquiries in a short period
- File regular ITRs — especially important for self-employed applicants
- Keep bank account statements clean — avoid frequent overdrafts or bounced cheques
Documents Required for a Home Loan
Getting your documents in order before approaching a bank saves weeks. Here's a complete checklist:
| Category | Salaried | Self-Employed |
|---|---|---|
| Identity Proof | Aadhaar card, PAN card, Passport, Voter ID | |
| Address Proof | Aadhaar, utility bills, rent agreement | |
| Income Proof | Last 3 months' salary slips Form 16 (last 2 years) Bank statements (6 months) |
Last 3 years' ITR with computation Audited balance sheet & P&L Bank statements (12 months) |
| Employment / Business Proof | Offer letter / employment certificate | GST registration, trade licence, business continuity proof |
| Property Documents | Sale agreement / MOU Title deed & previous chain documents Approved building plan NOC from society / developer Encumbrance certificate |
|
| Other | Photographs, loan application form, processing fee cheque | |
How to Apply for a Home Loan — Step by Step
The home loan process typically takes 2–4 weeks from application to disbursement, depending on how quickly property documents are verified. Here's how it works:
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Check Your Eligibility & CIBIL Score
Before you approach a lender, know where you stand. Check your CIBIL score (anything above 750 gives you the best rates), calculate your rough eligible amount, and list your existing EMI obligations. This takes 30 minutes and saves you from wasted applications.
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Compare Lenders
Don't go to just one bank. Rate differences of 0.25–0.50% across lenders can mean ₹3–5 lakh difference in total interest over 20 years. Compare processing fees, prepayment charges, and turnaround time — not just the headline rate.
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Submit Loan Application & Documents
Fill the application form and submit all required documents. The bank's credit team will do an initial check on income, existing obligations, and credit score. Keep photocopies of everything you submit.
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Property Legal & Technical Verification
The bank appoints a panel lawyer to verify the property's title and legal chain, and an engineer to do a technical valuation. This step often takes the longest — especially for older properties with unclear title history.
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Sanction Letter
Once the credit and property verification is cleared, the bank issues a sanction letter. Read it carefully — it outlines the loan amount, rate, tenure, prepayment terms, and any special conditions. You have the right to negotiate terms at this stage.
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Loan Agreement & Disbursement
Sign the loan agreement and pay the processing fee. The bank then disburses the amount — either in full (for ready properties) or in stages linked to construction progress. After disbursement, your EMIs begin — either immediately or after a short moratorium.
Home Loan EMI Calculator
Access to 20+ Lenders
We work with all major banks and NBFCs like SBI, HDFC, ICICI, Axis, Kotak, LIC HFL, PNB HFL and more. We match your profile to the lender most likely to approve your loan at the best rate, not the one that happens to have a branch nearby.
No First Consultation Fee
We don't charge applicants anything for first consultation. Our fee comes from the lender on successful disbursement which means we're motivated to get you approved, not to push you toward a product you don't need.
20+ Years of Knowledge
We've been based in Udaipur since the beginning. We know which lenders are faster with Rajasthan properties, which ones are better for agriculture-to-residential conversions, and which ones to avoid for certain property types.
End-to-End Support
From the first conversation to disbursement, we handle the paperwork, follow up with the bank, and stay available on call. You don't need to visit multiple banks or chase loan officers, we do that for you.
Specialists in Tricky Cases
Self-employed with irregular income? Property with a complicated title? Low CIBIL score? We've been handling complex home loan profiles for years and know which lenders are more flexible.
Rajasthan Coverage
We serve clients across Udaipur, Jaipur, Jodhpur, Kota, Ajmer, Bikaner, and beyond. Most of our work is done remotely you don't need to visit our office to get started
Pradhan Mantri Awas Yojana [PMAY] (Government Home Loan Subsidy)
If you're buying your first home and your household income is below a certain limit, you may qualify for an interest subsidy under PMAY (Pradhan Mantri Awas Yojana). PMAY 2.0, launched in 2024, continues to be active.
The subsidy is credited directly to your loan account, reducing your outstanding principal upfront. For the EWS (Economically Weaker Section) category, this can mean a subsidy of roughly ₹2.67 lakh a meaningful saving on a ₹15–25 lakh home loan.
| Category | Annual Household Income | Max Loan for Subsidy | Interest Subsidy |
|---|---|---|---|
| EWS (Economically Weaker Section) | Up to ₹3 lakh | ₹6 lakh | 6.5% p.a. |
| LIG (Low Income Group) | ₹3 lakh – ₹6 lakh | ₹6 lakh | 6.5% p.a. |
| MIG-I (Middle Income Group I) | ₹6 lakh – ₹12 lakh | ₹9 lakh | 4% p.a. |
| MIG-II (Middle Income Group II) | ₹12 lakh – ₹18 lakh | ₹12 lakh | 3% p.a. |
Home Loan Tax Benefits in India
A home loan offers tax benefits under two sections of the Income Tax Act — one on the principal repayment and one on the interest paid. Here's a quick breakdown (applicable under the old tax regime):
| Section | What It Covers | Maximum Deduction | Condition |
|---|---|---|---|
| Section 80C | Principal repayment of the home loan | Up to ₹1.5 lakh/year | Combined with other 80C investments (PPF, ELSS, etc.) |
| Section 24(b) | Interest paid on the home loan | Up to ₹2 lakh/year (self-occupied) | Property must be self-occupied. No cap for let-out property. |
| Section 80EE | Extra interest deduction for first-time buyers | Additional ₹50,000/year | Loan sanctioned between specific periods; property value ≤ ₹50 lakh |
| Joint Loan | Both co-applicants claim deductions independently | ₹3.5 lakh combined per year | Both must be co-owners & co-borrowers |
Why Work With Mr. Loanwala for Your Home Loan?
Banks are in the business of lending. We're in the business of making sure you get the right deal from the right bank. Those are very different things.
Frequently Asked Questions About Home Loan
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