Home Loan Guide: Eligibility, Types & Process
In this guide
Step-by-step Process
Check Your Eligibility
Banks consider: Age (21–65 years at loan maturity), Income (net monthly income × 50% = max EMI), Credit score (CIBIL 750+ for best rates), Job stability (min. 2 years at current employer), Existing liabilities. Loan amount: Typically 80% of property value (60% for plots). Loan tenure: Up to 30 years.
Compare Lenders and Interest Rates
Types: Fixed rate (rate locked for term), Floating rate (linked to RBI repo rate — EBLR). Current rates (2026): PSU banks ~8.5–9.5%, Private banks ~8.75–10%. Compare: Interest rate, Processing fee (0.25–1%), Prepayment charges (nil for floating), Foreclosure charges. Use EMI calculators online.
Apply and Submit Documents
Apply online or at branch. Documents: KYC (Aadhaar, PAN), Income proof (salary slips 3 months, Form 16, ITR 2 years), Bank statements (6 months), Employment letter, Property documents (Agreement to Sell, approved plan, title deeds). Processing fee collected with application.
Technical and Legal Verification by Bank
Bank appoints: Technical expert — inspects property, verifies construction quality, values the property. Legal expert — verifies title chain, checks for encumbrances, issues legal opinion. If both reports are positive, loan is sanctioned (7–15 days). Disbursement happens at registration or in tranches for under-construction.
Tax Benefits on Home Loan
Section 24(b): Interest deduction up to ₹2 lakh/year on self-occupied property (no limit for let-out). Section 80C: Principal repayment deduction up to ₹1.5 lakh/year. Section 80EEA: Additional ₹1.5 lakh for first-time buyers on affordable housing (loan sanctioned before March 31, 2022). PMAY subsidy available for eligible borrowers.
Official Government Portals
Common Questions
What is PMAY — Pradhan Mantri Awas Yojana?
PMAY provides interest subsidy for first-time home buyers. Under PMAY-Urban, EWS/LIG categories get 6.5% subsidy on loan up to ₹6 lakh; MIG-I gets 4% on ₹9 lakh; MIG-II gets 3% on ₹12 lakh. Subsidy credited upfront to loan account, reducing EMI. Check eligibility at pmaymis.gov.in.
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