Housing Loan in India – Is It a Trouble-free Proposal?


This article is for you if you have a thinking about buying a house.

A house is a dream for any person and owning one by accruing huge funds would definitely turn out to be a dream only. Housing Loan is really a sanction for those who can repay money on a regular basis. There are various kinds of loans that can be availed by customers who hold an account in a bank. What really matters is the benefit of planning loan like plan and the ease of repaying the same.

First of all, even before getting into the thought of Housing Loan it is better to learn the

  1. Different types of loans available
  2. Eligibility to avail for a Housing Loan
  3. Affordability of applying and repaying a home loan

The various types of loans that are made available to customers are:

  • Loan for purchasing a home
  • Loan for procuring a plot
  • Loan for constructing a home
  • Loan for improving a home
  • Balance transfer loan

The home loan process starts with a Formal Application for the Loan. Some of the common information you need to disclose while applying for a loan in any bank are:

  • Personal and residential details (Age proof, Identity proof and Address proof)
  • Proof of income
  • Status of employment
  • Educational details with proof of the same
  • Property Details (Location of the property)
  • Loan details (Type of Loan, Loan tenure, Loan amount)
  • Type of Loan you are applying
  • Estimated costs and so on

Estimated costs include the principle amount with the Home loan interest rates. Normally Home Loan Interest rates vary from bank to bank; but in common, the interest rates fall between 9.50% and 12.75%. This is definitely a hunch. That is, most part of your repayment amount is comprised of interest rates.

The advantages of preferring a Housing Loan to get your dream house are:

  • EMIWhat Is EMI? Equated Monthly Installment. A calculated amount that the borrower should repay as estimated by the Amortization Schedule – which contains the Outstanding Balance before payment of each EMI, the EMI itself, contribution towards principal repayment and interest payment, and outstanding balance after paying each EMI.
  • Women Borrower: Most of the banks privilege women borrowers, say for example, the interest rate is 9.35% or 9.40% for women borrowers. This is close to 0.05% lesser than the interest rate provided to the male borrowers.
  • You need Not Worry about paying the Whole Amount: Having planned to buy a home a bank can provide you with of 80% of the purchase value as home loan. This eases a person’s difficulty of gathering the whole amount.

Though the advantages seem to be attractive, housing loan is neither simple as it sounds nor as straightforward as it is explained. There are a lot of requirements you need to fulfill to be eligible for a housing loan. And, once you get a housing loan, the repayment is a complicated and tough process that will keep going on and on. Housing loans are not as flexible or less expensive as vehicle loans or personal loans. If you have a necessity, be ready for a costly process of Housing Loan ahead of you.

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