home loans in Bangalore
In general, Home Loan is a secured product where the lender gives finances to buy or development of a commercial or residential property. One can likewise avail a housing loan to purchase a plot of the area and develop on it. Home Loans are additionally issued to expand/repair/remodel/change another a new or second-hand property. The Home Loan is taken by a borrower against the property/security to be purchased. This is finished by giving the financier a conditional ownership for property. During the course of time, if the borrower fails to borrower fails to pay back the loan, the financier can recover the loaned cash by selling the property which was given as the guarantee. Most banks or lenders get the property evaluated by their own means. The loans are provided in accordance with their evaluation. Their valuation is altogether lower than the actual cost and henceforth the requirement of the borrowers goes up. Home credits in Indian Banks are given up to a maximum of 80% (90% for loan sum beneath INR 20 lakhs) of the estimation of the house. Home credits are reimbursed utilizing Equated Monthly Instalments (EMIs) which is spread over a fixed time period
Most lenders get the property valued independently and provide loans based on their estimated value. It is important to remember, however, that frequently their valuation is significantly lower than the actual cost and hence the requirement of the borrowers goes up. Home loans in Indian Banks are provided up to maximum of 80% (90% for loan amount below INR 20 lakhs) of the value of the house. Home loans are repaid using Equated Monthly Installments (EMIs) spread over a fixed tenure.
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Types of Home Loans
Many have a wrong perception that Home loan is offered in just one format. With A star Solutions, we offer an array of Home Loans from all major Banks. Let’s have a brief look into the various options available for you.
- Home Purchase Loan:
In this loan type, you can buy a new residential property with the loan amount. It is a simple home loan plan which is easy and straightforward.
- Home Improvement Loan:
With the changing trends in home construction, it is quite natural to think about wanting to renovate your home and give it a new outlook. If you are thinking about it, then Home Improvement Loan is the best suit for you. The packaging for this type of loan is done in accordance with the cost of the renovation or repair of your existing home.
- Home Construction Loan:
This type of loan is taken when the borrower wants to construct a new home on a given plot of land.
Home Loan Eligibility Criteria
Eligibility Criteria differ from Bank to Bank. Along with your monthly disposable income or surplus income, factors such as liabilities, stability of income, your spouse’s income etc are also considered while figuring out your repayment capacity. Looking it from the bank’s perspective, your ability to pay the loan without any fuss on time is what matters the most. On a general market term, the bank considered that 55-60% of your monthly disposable income are anytime available for the repayment of loan without any trouble. When certain banks consider the income available for EMI on individual’s gross income rather than disposal income, then there will be exceptions.
A few decisive factors in Home loan are listed below:
Income: Your income is what determines the amount of home loan. Generally the banks fix the EMI to income ratio at 0.45 to 0.50.
Tenure: It works on one simple principle - The longer tenure you opt for, the more is your home loan eligibility and the lesser is your EMI.
Age: Age is a key factor. It determines the tenure and hence your eligibility.
Interest Rate offered: Banks offer Fixed and Floating Rate of Interest. If your interest rates are on a lower side, then the loan eligibility will be higher.
CIBIL Score: Your credit report tells the bank about your repayment capacity and hence determines if you’re eligible for a loan.
Bank Home Loan Criteria
As we discussed above, eligibility criteria differ from bank to bank. However, we can broadly classify them into the following buckets:
Monthly income is one the most important factor which can determine your loan amount and eligibility. In case if you are self-employed, the yearly profit of yours will determine the loan amount. More the profit will yield you higher loan amount.
If you have pending EMIs for previous loans, banks will always think twice before giving you a loan because of the risk being associated with you.
Banks consider the income that is left in your bank account after deductions of any EMIs as a key factor for giving a home loan. The income that is left in your bank account after deductions of any EMIs is a key factor considered by the banks for giving out a home loan. The Home Loan Eligibility Calculator will be computed after the derivation of the EMI's that you are paid month to month.
In the event that you own a home already, you ought to realize that banks give up to 75% of your home property estimation as loan amount. Banks likewise have certain standards for the property before allowing a loan. These are concerning the base region necessities for a level which might be a floor covering zone or developed zone.
The bank additionally considers the age of the property, the area of the property furthermore the notoriety of the developers building the property. Careful examination and assessment of the property to check whether the title is clear or not is an extra check notwithstanding things like proprietorship debate etc.
The credit history of an individual plays an important role in setting up in deciding the amount of the loan. Credit history is nothing but the credit report of an individual based on credit information recorded by CIBIL through all your loan transactions.
Age assumes an essential part in deciding your qualification for a home loan. One has to be at least 21 years old to apply for a home loan. The base age prerequisite might be distinctive for various loaning organizations. The maximum age may shift from 58 to 65 years, relying upon the wage wellspring of the person.
To enhance the eligibility for getting a loan can be enhanced by having a co-applicant. It can a spouse, nominated friend or relative. This will increase your total eligible income. However, only certain relationships are permitted by the banks to be the co-applicant. In case of NBFCs customers can expect higher eligibility.
Home Loan Interest Rates:
Home Loan in India can primarily be classified into two based on interest rates: fixed rate and floating rate of interest.
Home Loan – Fixed Interest Rate:
Fixed interest rate refers to repayment of home loans in fixed equal instalments over the entire period of the loan. In this case, the interest rate doesn’t change with market fluctuations.
Repayment of home loans in fixed equal instalments along the loan period is referred to as fixed interest rate. The important aspect in this is, the interest rate doesn’t change with market fluctuation.
Benefits Drawbacks: Irrespective of market condition, the interest rate remains the same. Generally they are 1-2.5 % points higher compared to floating rate home loan. The fixed rate home loan doesn’t get the benefit of reduced rates.
Home Loan Floating Interest Rate:
The interest rate varies in accordance with the market condition is what floating interest rate denote. Home loans with floating interest rates are tied to a base rate plus a floating element thereof. When the base rate varies, the floating interest rate also varies according to that. The interest rates will depend on the base rate of the bank. As and when the bank changes their base rate, the interest rate changes. The change can either be in terms of the EMI or the tenure.
Comparing to fixed rate home loan, floating rate home loans are cheaper. Your EMI depends upon the interest rate which the bank charges you, the tenure of the loan as well as the loan amount. You can also alter the tenure and the interest rates to see how you can reduce the EMI or the tenure of the loan.
Home Loan Application Fees and Charges:
Home Loan Lenders levy some fees and charges at the time of loan sanctioning. Below we have listed important fees and charges which are applicable during time of loan sanctioning.
Processing Fee: Bank charge you 0.5 to 1 % of the total home loan for processing the home loan and is non-refundable. If you decide against taking the loan from the bank, then the entire amount is forfeited.
Note : Paying a processing fee doesn’t guarantee you a loan sanction.
Prepayment Fees: The prepayment fee comes into effect when one decides to prepay the home loan before the end of the actual tenure. It varies with each bank. For some banks, they offer no prepayment charges if the prepayment is done from the borrower’s own sources. In cases where the person is shifting the loan to a different lender, a fee in the range of 1% to 2% of the outstanding loan amount will be charged by most of the banks except a few.
According to the RBI norms, banks are not allowed to levy foreclosure charges on home loans anymore.
Tips: All the charges should be be taken down in written from the bank and the written document preserved. This is to avoid confusion in case the bank asks you to pay a different amount after sometime.
Applying for a New Home Loan
To own a home is a wish and dream of a lifetime. But the ever rising interest rate takes a toll on that common man’s dream. By the market standards, you’re eligible for a loan amount of 80% of the total amount.
Here are some factors to consider if you are a new home loan customer:
- How should you choose your home loan while applying?
Extreme care and study should be conducted before choosing your loan lenders. Never finalize a loan lender only on the basis of interest rate. Unfortunately, there is a perception that the cheapest is the best. Which is not true. There are many other prominent criteria to consider before finalizing a home loan.
- Consider Home Loan Eligibility Factors
Factors such as age, annual income, adding your spouse’s income, loan tenures play an import role in making you eligible for getting the home loan. Make an extensive checklist of eligibility factors listed by different banks and choose what suits you.
- Home Loan Fixed or Floating Interest Rate
Fixed interest rate is where you need to pay same EMI over a the total tenure of the loan period. Market changes won’t affect it, unlike in floating interest rate. Have a close evaluation on your income and decide on what type of interest rate to opt for.
Existing Home Loan Customers:
“Balance transfer option” is one facility which allows you to shift your home loan to a new lender from the existing lender. Most of the banks offer this facility and it’s a great facility which will decrease the monthly EMI. You should also give a serious consideration about shifting from the old BPLR system, which has a characteristic feature of interest rate constantly changing. The new system is place is transparent and will bring you in saving because you don’t end up paying unnecessary amount.
Documents Required for Home Loan:
Salaried Customers Self Employed Professionals Self Employed Businessman
Businessman Application form with photograph Application form with photograph Application form with photograph Identity and Residence Proof Identity and Residence Proof Identity and Residence Proof Latest Salary-slip Education Qualifications Certificate and Proof of business existence Education Qualifications Certificate and Proof of business existence Form 16Last 3 years Income Tax returns (self and business)Business profile Last 6 months bank statements Last 3 years Profit /Loss and Balance Sheet Last 3 years Income Tax returns (self and business)Last 3 years Profit /Loss and Balance Sheet Processing fee cheque Last 6 months bank statements Last 6 months bank statements (self and business)Processing fee cheque Processing fee cheque.
Home Loan Balance Transfer
As one of our most popular products with Home owners, a Balance Transfer can help you get a better deal on your Home Loan and thereby get you a substantial savings. Using a balance transfer, you can take a top up loan from a bank. Which will allow you to pay off your other loans by taking a consolidated loan from a bank.A Star Solutions will help you get the best possible deal on a balance transfer for your loan. We Gaurantee Savings!
Compare Home Loan Interest Rates
Depending on bank provider, home loan varies . Personal loan interest rates vary depending on a number of factors such as:
Employment Type: For salaried and non-salaried personnel personal loan interest rates also differ. Risky investment possibilities are associated with non-salaried personnel.
Company Type: Depending on parameters such as revenue, adherence, standards, etc.; companies are channelled into Category A, B and C.
Salary: The interest rate against your loan is dictated by your salary. Usually, lower salaries warrant higher interest rate, reduce lending risk of banks.
A star solutions is the online portal, India’s largest loan distributor, and works with over 35 preferred banks like Axis Bank, Bajaj Finserve, Cholamandalam, Citibank, DCB, Deutsche Bank, DHFL, ECL Finance, EDELWEISS, First Blue, Fullerton, Capital First, HDB Financial Services, HDFC BANK LTD, HDFC LTD, HSBC, ICICI Bank Ltd, IndiaBulls Financial Services Pvt Ltd, Indiainfoline, Indusind Bank, ING Vysa Bank Ltd, Investment financial Services Pvt Ltd, Karvy Financial Services Pvt Ltd, Kotak Mahindra Bank Ltd, Magma Finance, Money line, Punjab and National Bank, Reliance, Religare, Standard Chartered Bank, Shriram City, Tata Capital, Electronica Finance Limited, Money Matters Finance Ltd to name a few.
A Star Solutions offers the best deals on unsecured loans, home loans, general purpose loans, business loans, working capital loans and much more. In the market for over the 20 years, nobody understands it better than us.
Home Loan Tips
The following are important things to know and remember.
Have a proper discussion with your lender about current home loan interest rates and get a clear rate differentiation on fixed or floating rate figures. Floating rates will go up when interest rates in the economy go up. And hence the monthly re-payment.
- Reset Clause:
Check the reset clause, especially in the case of fixed interest rate loan as the rates will not be fixed throughout the tenure of the loan.
- Spread/Mark up
Check if the margin in the case of the floating rate is fixed or variable. The rate of interest you have to pay will vary accordingly.
Along with home loan often, it comes with requires various fees too. Fees such as as loan documentation, late payment, restructuring of loan, changing from fixed to floating interest rate loan and vice versa, origination or processing charges, administrative charges, recurring annual service fee, changing the loan tenure, switching to different loan package during the loan tenure, legal fee, technical inspection fee, document retrieval charges and pre-payment charges, if you want to prepay the loan. Remember, many of these fees are negotiable / can be waived also. Make sure you ask about the fees which you don’t understand and have a proper negotiation before finalizing the figures.
- Down Payments / Margin
Again, this depends on individual banks. Some may ask for 20-30% as down payment. But there are cases in which banks are ready to settle for 5% as down payment. Have a clear idea about how much you can pay and take ahead with that figures.
Once you are satisfied with the terms you have negotiated, please do obtain a written offer letter from the lender and keep a copy with you. Read the offer letter carefully before signing.
Home Loan Banks, Service Providers and Companies
For offering home loans, A Star Solutions has tied up with 35+ partners which include banks, service providers and companies.
- HDFC Bank
Based in Mumbai, Maharashtra, HDFC Bank Limited is an Indian financial services company. Incorporated in August 1994, HDFC Bank is the fifth largest bank in India by assets and the largest bank by market capitalization as of 1 November 2012.
- ICICI Bank
The second largest bank in India by assets and third by market capitalisation, ICICI Bank Limited is a multinational financial services company which has headquarters in Mumbai, India.
- AXIS Bank
Axis Bank Limited is an Indian financial services corporation headquartered in Mumbai, Maharashtra. It had begun operations in 1994, after the Government of India allowed new private banks to be established.
- IDBI Bank
IDBI Bank Limited is an Indian financial service company headquartered Mumbai, India. RBI categorised IDBI as an “other public sector bank”
- Kotak Mahindra Bank
Kotak Mahindra Bank is an Indian financial service firm established in 1985. It was previously known as Kotak Mahindra Finance Limited, a non-banking financial company. Banks and financial institutions including.
- Other Partner home loan service providers and companies include:
Bajaj Finserve Cholamandalam Citibank DCB (Development Credit Bank)Deutsche BankDHFLEDELWEISSFirst BlueFulletronHDB Financial ServicesHDFC LTDHSBCIndiaBulls Financial Services Pvt LtdIndusind BankING Vysa Bank LtdKarvy Financial Services Pvt LtdKotak Mahindra Bank LtdMagma FinancePunjab and National Bank (PNB)Reliance Commercial Finance Religare Standard Chartered Bank Shriram City Tata Capital State Bank of India.
Home Loan Advantage
This type of home loan is linked to a current account, thereby reducing your interest outflow depending on your ideal balance in your bank accounts.