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REVERSE MORTGAGE- Loan For elderly

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Introduction

India as a country has always been rich in its culture and people. But over a period of time a cultural shift towards modernization and westernization has altered many things in our society. One such cultural change is the concept of Joint Families. The concept of Joint families also changed to smaller families ever since the concept of privacy in people life gained importance in the modern culture. As a result, there are noticeable cases particularly for the elderly who lack many kind of support including the financials support from their loved ones/children. Also the cost of their medical treatment in the old age increases which further worsens their financial crises.

Hence with due respect to the elderly who want to live independently, the Union Government of India  introduced the concept of Reverse Mortgage in order to secure their financials requirements so that they can meet their day-to-day livelihood expenses and increasing cost of medical treatments.

What is Reverse Mortgage?

Meaning: Reverse Mortgage helps the senior citizen above the age of 60 years to avail of regular/periodical payments from Banks/Non Banking Financial Institutions (NBFC) against the mortgage of their house while still remaining the owner of the house and occupying the same.

The Banks/ NBFCs uses various factors such as individuals age, prevailing interest rates etc. to calculate the value of the property. However the minimum residential life of the property should not be less than 20 years. Under Reverse Mortgage an individual can avail the payments in combination of periodical, lump-sum or in the form of a committed line of credit.

The interest rates in Reverse mortgages could be either fixed or floating determined by the prevailing market interest rates and may vary from bank-to banks. Unlike other loans the interest amount in this types of loan is rolled into the loan balance, thus gives an additional relief for the borrowers, as he doesn’t have to pay anything upfront. Also the borrower does not have to repay the loan borrowed under reverse mortgage during his life, lifetime or till such time he continues to stay in the house. The entire loan balance along with the interest + mortgage insurance availed if any becomes payable only when the borrower sells the house or moves away permanently or when the last surviving borrower dies OR at the event when borrower willingly pre-closes the loan with no foreclose or penalty charges.

In the event of the death of one of the spouse, the other can still continue living in the house and enjoy the benefits of reverse mortgage loan. Only on the death of both, the Bank/NBFC makes the settlement of the loan. The lender Bank/NBFC holds the right to sell the property, in the event of the death of the borrower and recover the loan + interest accrued on loan. Any sale proceeds beyond the loan borrowed goes to the legal heirs. However any sale proceeds which are lower than the loan borrowed + accrued interest, the loss is borne by the bank.

However if the legal heirs whish not to sell the property they can repay the entire loan along with the interest accrued on the loan and get the mortgage released.

There are mainly two types of Reverse Mortgage available in India markets:-

Regular Mortgage – In regular mortgage the Bank/NBFCs calculates and makes monthly payment to the borrower directly. The interest on mortgage will accrue only on the payouts. In any event, of the death of the borrower only the payouts will be recovered.

Reverse Mortgage Loan enabled Annuity – (RMLeA) – in RMLeA the Banks/NBFCs makes a lump-sum payment to a life insurance company, which calculates the monthly payouts based on the actual pricing models that it will pay for lifetime. This monthly payment is called annuity and is higher than regular monthly payouts one gets from the regular mortgage. The insurer is able to give higher payouts it invests the lump-sum amount received from the banks/ NBFCs and earns returns on it. Since the lump-sum amount is paid in RMLeA, the interest is levied on the entire loan amount. In any event of the death of the borrower, the Bank/NBFC will recover the entire loan amount.

There are not many Banks/NBFCs who offer RMLEA in India.

Important Aspects in Reverse Mortgage:-

1) Eligibility – any senior citizen having minimum age of 60years can apply for Reverse Mortgage. If a couple seeks a joint loan then the minimum age limit for the spouse is 55 years or above.

2) Reverse Mortgage does not require any Income or Credit Score requirements.

3) The applicant –senior citizen must possess a self acquired and self owned or jointly owned property with the spouse. Ancestral properties cannot be secured for Reverse Mortgage.

4) No commercial property is eligible for Reverse Mortgage.

5) LTV (Loan To Value) – Banks / NBFCs offers up-to 60% of the market value of the residential property in Regular reverse mortgage while in RMLeA the LTV is 90% of the market value.

6) The minimum residential life of the property while taking Reverse Mortgage should not be less than 20 years.

7) Tenure – minimum and maximum tenure for regular reverse mortgage is 10 years and 20 years respectively. Whereas in RMLeA the tenure is provided till the lifetime of the borrower’s age.

8) The property should have clear title and should be free from any encumbrances.

9) Disbursements – the loan can be provided through monthly, quarterly, half yearly or annual disbursements or as a lump-sum or as a committed line of credit or as a combination of the three.

10) Under Reverse Mortgage the maximum loan limit has been capped to 50lacs-1crore by the Banks/NBFCs.

11) The ceiling limit in monthly payment plans is maximum of Rs 50,000 and 50% of the loan amount is the maximum lump-sum limit subject to the cap of Rs. 15 Lakhs.

12) Money borrowed in reverse mortgage cannot be used for any business or trading purposes or for investments in shares or real estate/ properties.  They can be used only for a specific purpose like meeting the day-to-day livelihood expenses and the medical treatment of the borrower, spouse or dependant person, repairs and renovation of the property.

13) Cost incurred for availing reverse mortgage – usually Banks/NBFCs charges 0.50% of the of the loan amount as the processing fees. Post sanction also a stamp duty is payable for loan agreement and mortgage.

14) There is no pre-part payment charges involved in reverse mortgage loans.

15) The Banks / NBFCs will undertake the revaluation of the property once every 5 years. In such scenario, the borrower stands a chance to avail the additional loan amount of the valuation of the property increases on the revaluation. In such a case the borrower receives the incremental amount in lump-sum.

Tax Benefits for Reverse Mortgage:-

All payments under reverse mortgage is exempt from Income Tax, under section 10(43) of the Income Tax Act, 1961. Amount received through reverse mortgage is the loan and not a income, hence it will not attract any tax.

However, in the case the property is sold by the lender Bank/NBFC, the borrower is liable to pay the income tax on the capital gain derived on selling the property. Also the annuity income in the hands of the borrower is taxable.

If the borrower or his legal heirs repays the entire loan amount from any other sources without selling the property – no tax shall be levied.

Foreclosure of Reverse Mortgage:-

The loan may be liable to foreclose on the occurrence of certain events of default:

  1. If the borrower does not stay in the property for a continuous period of 1 year or more.
  2. If the borrower fails to pay property tax and other statutory payment pertaining to the house.
  3. If the borrower fails to insure the house and pay the home insurance.
  4. If the borrower declares himself as bankrupt.
  5. If the borrower donates or abandons the property.
  6. If the borrower commits faults or misrepresentations.
  7. If the borrower sells of part or entire house, adds new owner to a property title or by creating any other encumbrance on the property by the way of taking out new debt against it or alienating the interest by the way of gift or will.
  8. If the government condemns the property for health or safety reasons.
  9. If the government under statutory provisions seeks to acquire the residential property for public use.

Few of the Banks/ NBFCs which provides Reverse Mortgage in India are listed below:-

  • State Bank of India (SBI).
  • Central Bank of India.
  • Indian Bank.
  • Punjab National Bank (PNB).
  • Andhra Bank.
  • Canara Bank.
  • Corporation Bank.
  • National Housing Bank (NHB).
  • LIC Housing Finance.
  • Deewan Housing Finance Ltd. (DHFL).

Best Banks For Mortgage Loan In India

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best bank for mortgage loan -loanfasttrack

(The Complete Guide For Mortgage Loan)

A loan provided by pledging your property as collateral with lender Banks/NBFCs is called a mortgage loan. Since the property is taken as a security to provide a loan it falls under the category of secured loans. Mortgage loans are also referred to as “Loan Against Property”. The interest rates on mortgage loans range from 8.75% to 11.50% p.a.

A loan provided by pledging your property as collateral with lender Banks/NBFCs is called a mortgage loan. Since the property is taken as a security to provide a loan it falls under the category of secured loans. Mortgage loans are also referred to as “Loan Against Property”. The interest rates on mortgage loans range from 8.75% to 11.50% p.a.

With the series of repo rate and reverse repo rate cuts announced by the RBI to mitigate the effects of pandemic coronavirus, the lending rates of the banks got altered touching a new all-time low of 10 years. The revised mortgage rates of the top banks are given below. 

 RBI’s Announcement On Financial Aid To Combat Covid-19

Comparison For The Best Bank For Mortgage Loan 

Interest rate offered is the primary factor for comparison of Mortgage loans. It has a direct impact on your EMI paying capacity. Apart from the interest rates the other key factors you must compare to find the best bank for mortgage loan includes:

  • Processing Fees (PF) and Other relevant charges
  • Processing time for loan
  • Documents required
  • The LTV funding norms. (LTV-Loan to value)
  • Pre & part payment conditions and its charges
  • Other services provided

CLICK to know the best bank for a mortgage loan.

Compare Mortgage Loan Interest Rates Of Top Banks

Bank Home Loan Rate Of Interest (Min) Home Loan Rate Of Interest (Max) Processing Fees APPLY NOW 
ICICI Bank 9% 11% 0.50%-1% of the loan amount + applicable GST. APPLY NOW 
HDFC 9.10% 11.50% 0.50%-1% of the loan amount + applicable GST. APPLY NOW 
Piramal Housing 10% 13% 0.50%-1% of the loan amount + applicable GST. APPLY NOW 
Axis Bank 9.50% 12% 0.75%-1% of the loan amount + applicable GST. APPLY NOW 
CITI Bank 8.75%* – Cases above 50lakhs- For self employed   9.50% 10.50% 0.25% – 1% of the loan amount + applicable GST. APPLY NOW 

Note: The interest rates and the processing fees mentioned in the chart are subject to change anytime without any prior notice.

Which Bank Is Providing The Lowest Interest Rate On Mortgage Loan?

As per the given rate chart ICICI Bank is giving the lowest interest rate of 9% followed by HDFC @ 9.10% for all eligible loan borrowers i.e. both salaried and self-employed irrespective of the loan amount. Although the Citi Bank’s interest rate of 8.75% is competitive but the rates are non-applicable for salaried loan borrowers and there is also a capping minimum requirement of loan amount i.e. applicable only for 50lakhs and above. The Covid -19 pandemic has made a strategic impact on the Indian mortgage industry which has reduced the interest rates to touch an all-time new low of 10years. 

Total Cost For Applying A Mortgage Loan

Besides the processing fees and the applicable GST, there are various other charges that make the total cost of your mortgage loan. Below given is the total cost involved in applying a mortgage loan:

1) Processing Fees (PF): PF is a charge taken by the banks for processing your loan. The processing fees on mortgage loans range from 0.25%-1% on the loan amount.

2) GST: 18%. Applicable on all banking charges such as PF, administrative cost, legal & technical, CERSAI, pre & part payment, etc.

3) CERSAI: Central Registry of Securitisation Asset Reconstruction And Security Interest cost of Rs.100/- is mandatory for all loan borrowers. It is Indian central online registry of equitable mortgages, mainly created to check fraudulent activities in lending against equitable mortgages.

4) Administrative Charges: One time non-refundable charge collected by the bank to recover the administrative cost for processing your loan. It varies from bank to bank, and ranges from Rs.3,500 – Rs.6,000/-.

5) Legal & Technical Charge: Legal charge for scrutinizing your property documents such as agreement & prior chain of agreements, title flow, title search, etc. and technical charge to determine the valuation of your property, vary from bank to bank and ranges from Rs.5,000 – Rs.10,000/-.

6) Registered Mortgage (RM): A charge created on the property with the sub-registrar through a formal written process, as a proof of transfer of interest to the bank. RM charges are 0.50% on the loan amount. If RM is done you do not have to pay the stamp duty charges.

7) Franking Charge: Varies from state to state and range between 0.10% – 0.20% on the loan amount.

Loan Against Property Mortgage Loan In Bangalore - Private Finance ...

Best Bank For Mortgage Loan

If you are unable to decide which is the best bank for a mortgage loan, here is a quick guide for you.

Although rate of interest remains the primary factor for comparison of the best bank for mortgage loan; total costs involved, eligibility as per income and as per the market value of the property i.e. the LTV (Loan To Value) criteria, list of documents required, services provided, etc. are yet other factors which are equally important for making a comparison.

  • If you are looking for quick services and faster disbursement of loans along with low interest rates, ICICI bank can be a better choice. Apply for ICICI Bank.
  • If you are self-employed looking only for lowest interest rates, Citi bank can be a better choice.
  • If you are an NRI and want to mortgage your residential property, ICICI bank is the best option. (No other banks provide NRI mortgage loans.)
  • If you are a senior citizen above the age of 60years looking for funds to take care of your daily livelihood and medical expenses, Canara bank is best for you to apply for a reverse mortgage loan.
  • If you are looking for a pre-sanction loan without taking the upfront heavy cost of processing fees, HDFC can be a better choice – pay only a nominal fee of Rs.5000/- . Apply for HDFC Bank.

How To Get The Best Deal On a Mortgage Loan? 

The banks offer concessions in the interest rates, processing fees, repayment tenures, increased eligibility, etc. only after carefully studying your eligibility, credibility, employment details, legal and technical analysis of your property, etc. the higher the risk you pose to the bank the lower are your chances to negotiate with the banks. Only when the bank is certain of your repayment capacity you can bang the best deal on a mortgage loan. The factors affecting the bank’s decision to provide you concessional rates and discounted charges depends on the estimation of high & low risk involved in funding the loan. These factors are as follows:

1) Your Profile: Well designations, employed in reputed organizations, professionals such as doctors, engineers, architects, chartered accountants, etc. remains the first priority for the banks to fund as they pose minimum risk to banks and the banks are assured for their loan repayments.

2) Income Eligibility: The equation says, the higher is your income the less are your chances to default the loan. Also your uninterrupted regular flow of income with subject to the obligations if any, poses minimum risk to the banks in funding you. 

3) Repayment History: Your previous loan obligations, repayment records i.e. timely repayment of EMI with no delayed payments, pre-closure of loan before its due date, etc. are the signs of your good repayment track records which are considered important while calculating the risk factor. Your repayment record will give assurance of your timely repayment of loan.  

4) Existing Relationship With The Bank: Your existing relationship with the banks puts you in a better deal to capitalise rates and charges for your new requirement of mortgage loan.

5) Property Valuation: When your loan requirement is minimum against the high value of the pledged property, your LTV percentage is minimum and your chance to secure a low cost mortgage loan is high because of low risk to the banks. 

CLICK to bang a best deal on mortgage loans. 

Mortgage Loan Details

A mortgage is a type of secured loan given against the collateral of an asset i.e. the property which is either residential or commercial or industrial. Anyone who is above 21years and is having a regular flow of legal income and is having a property registered in his name along-with the proper income and property documentation can apply for a mortgage loan. Both eligible salaried and self-employed can apply for a mortgage loan to meet their personal requirement for funds. A mortgage loan can be taken to fulfill your immediate and urgent requirement of funds. Since the mortgage amount is utilized to meet your many personal requirements, banks keep their margins high in mortgage lending rates and therefore the rate of interest in mortgage loans is high in comparison to the rate of interest in home loans.

Loan Against Property - Loanfasttrack

Purpose For Applying Mortgage Loan

Since a mortgage loan is cheaper in comparison to other unsecured loan to fulfill your immediate requirements of funds, it can be applied to fulfill your purpose of:

  • Home renovations
  • Home repairs
  • Home construction
  • Children education
  • Child marriage
  • Investment in property
  • Medical emergencies
  • Business expansions
  • To close other unsecured loans
  • Clear credit card dues
  • Etc.

However the end-use for applying a mortgage loan has to be clear and specific. Banks do not lend to meet your unjustified end-use purposes, such as, investment in stocks, mutual funds, purchasing a chawl property, purchasing a pagdi property,investing in illegal raw houses, money lending business, etc.

You also get a choice to select a suitable interest rate for yourself. The interest rates in mortgage loans can either be fixed or floating.

1) Fixed Interest Rate:- In fixed interest rates, your mortgage interest rates remain fixed for the loan tenure or for the portion of the loan tenure as stated in the bank’s agreements. The fixed tenure and the interest rate varies from bank to bank. You can switch from a fixed rate to a floating interest rate any-time after the completion of the fixed tenure.

2) Floating Interest Rates:- In floating interest rates, your mortgage interest rates are not fixed and fluctuate according to the updated base rate of the banks. The floating rates are cheaper than the fixed interest rates and since they keep on varying i.e. fluctuating they are also referred to as variable or fluctuating interest rates.

Mortgage Loan Criteria

Eligibility: A borrower with regular flow of income and within the age group of 21 years to 70 years. For salaried the age limit is 21yrs-60yrs and for self-employed the age limit is 21yrs-70yrs.

Loan Amount: The loan amount ranges from Rs.10lakhs to Rs.20crs.

Security: An ownership residential, commercial or industrial property is taken as collateral for providing the mortgage loan.

Loan To Value (LTV): Varies from 60%-70% on the market value of the property. The LTV ratio differs by type of property. For residential & commercial property LTV is 60%-70% and for industrial property LTV is 50%-55%.

Loan Tenure: Ranges between 5years – 20years.

Interest Rates: The new home loan interest rates starts from 8.75%. The interest rates of the various banks range from 8.75% – 13%.

Processing Fees: Vary between 0.50%- 1% on the loan amount + applicable GST.

Other Charges: Legal charges, technical charges, administrative charges, franking & stamp duty charge, intimation to mortgage charge, etc.

Foreclosure Charges: Vary between banks and are 2% – 5% on outstanding loan amount.

CIBIL Score: Requires good CIBIL score of 750 and above.

Mortgage Loan Products: Simple mortgage loan, floating rate mortgage loan, fixed rate mortgage loan, mortgage overdraft, mortgage loan balance transfer, mortgage loan top-up, reverse mortgage.

Documents Required: Identity proof, Address proof, Income proof and Property papers.

Which Properties Are Considered For Mortgage Loan

The property has a vital role in mortgage loan, as it is the only asset which is pledged as collateral to obtain the loan. Therefore it is important you understand a property in mortgage loan against which a loan can be drawn.

Highlighted below are the important aspects of the property.

  • Only residential, commercial or industrial ownership property, self owned, jointly owned or a parental owned property can be considered for mortgage loan.
  • Property’s registration and stamp duty must have been paid.
  • The age of the property is important to ensure the maximum loan tenure. Structural audit report is mandatory for properties with more than 50years.
  • The market value of the property is important to determine loan to value i.e. LTV.
  • OC, CC & Plan Copy along with index 2 are the mandatory property documents along with the prior chain of agreement.
  • Property tax is mandatory for mortgage in the event of absence of OC & CC + plan copy for properties which are more than 25-30years of old.
  • If the chain of agreement is missing or lost, an FIR copy with public notice is mandatory along with the no claim letter to mortgage the property.
  • The property must have a clear and marketable title.

Properties that cannot be mortgaged includes:

  •  Illegal property.
  • Third party ownership property.
  • Row houses or chawl properties.
  • SRA properties less than 10 years old.
  • Pagadi property.
  • A property with notarized agreement.
  • Government allotted quarters.
  • Rented property.
  • A property ownership transferred through a gift deed where stamp duty and registration is not paid.
  • Old buildings where the age of the property has expired. And no structural audit report is available for the property.
  • MHADA/CIDCO/MMRDA/ or other government property having a clause in its agreement for “non-saleable or mortgage of the property title”.
  • Property falling under the negative area list of the banks.
  • A property with incomplete documentation, whose property papers are missing (lost, misplaced, stolen or damaged).
  • A residential property converted for commercial use having no BMC approval and no commercial property tax is paid.
  • A property which does not qualify the minimum sq ft requirement criteria of the banks.
  • A property with suit filed on it.
  • Grampanchayat property.

NOTE:

  • Some banks may consider pagadi property as a supportive property to your primary property which is to be mortgaged in order to increase your loan eligibility. In such a scenario market value of both the properties will be considered for calculating the LTV.
  • Only some NBFCs do grampanchyat mortgage loans.

Important Highlights On Mortgage Loan

  • All property co-owners have to be the co-applicants in the loan.
  • If the property is in parental name and you as 1 of the siblings wish to apply for the mortgage loan, it is mandatory to obtain the NOC, from the rest of the siblings.
  • Many private banks have criteria for minimum requirement of sq ft area of the property for providing mortgage loan.
  • An 1 bhk residential property jointly owned by two siblings is not considered for mortgage by many private banks.
  • Mortgage loans cannot be availed in negative industries such as private lending firms and negative profiles such as financiers, private lenders, stock market investors, etc.
  •  A mortgage loan amount cannot be utilized for trading and investments in stock markets, mutual funds, buying a chawl property, for start-up businesses, etc.   

Types Of Mortgage Loans

There are mainly 6 types of mortgage loans.

1) Simple Mortgage: It is a traditional mortgage loan where you pledge your property to get the desired loan amount. Your income, age, profile, obligations, employment, property value, etc. are some of the important factors considered to calculate your mortgage eligibility. In simple mortgages you can choose the best suitable interest rate for you and accordingly your mortgage loan will be:

  1. Fixed interest rate mortgage loan- where your interest rates remain fixed for the loan tenure or for the portion of the loan tenure.
  2. Floating interest rate mortgage loan- where your interest rates are not fixed and fluctuate according to the latest lending rates/base rate of the banks. The interest rates automatically get revised with the changes in the base rates of the banks.

APPLY for Mortgage Loan @ 9%

2) Mortgage Overdraft: A loan amount which is given in the form of an overdraft facility is called “Mortgage Overdraft”. It is a new mortgage product introduced in the recent past to meet your working capital requirement. It is therefore suitable for businessmen or professionals who have fluctuating requirements of funds throughout the year. Businessmen include self-employed- proprietor, partner of the partnership firm, director of the public and private limited company, entrepreneur, freelancer and professional such doctors, engineers, chartered accountants, etc. Similar to simple mortgage, mortgage overdraft is also provided against the pledge of the property but with an overdraft facility wherein you are required to pay interest only on the borrowed loan amount. There are no restrictions on the pre & part payments of the loan, and therefore the interest rates for mortgage overdraft are 1%-2% higher in comparison to a simple mortgage loan.

CLICK to get complete information on mortgage overdraft.

APPLY for Mortgage Overdraft @ 9.50%

3) Mortgage Loan Balance Transfer: You can transfer your high interest rate mortgage loan to a low interest rate mortgage loan with another bank. This process of transferring a loan from one bank to another to enjoy the benefits of interest rates, longer repayment tenures and to apply for additional top-up loan is referred as mortgage loan balance transfer.

Check out the list of documents required for balance transfer CLICK.

CLICK to APPLY for Mortgage Loan Balance Transfer @ 9.50% 9% & 0.50%Processing Fees   

4) Mortgage Loan Top-Up: Top-up loan means borrowing additional loan to your already existing mortgage loan. It is the easiest and the fastest way of receiving funds for meeting your immediate requirements. Your top-up eligibility is subject to your income eligibility and to the market value of your property. For your top-up eligibility against property the total amount of your top-up loan & existing outstanding on mortgage loan should not exceed the LTV percentage of the bank i.e. 60%-70%. Top-up loan is offered at the same rate of your existing mortgage loan or varies between 0.10%-1% above your existing mortgage rate depending upon bank to bank. The processing fees to apply for a mortgage range from 0.25%-1% on the top-up amount.

APPLY Mortgage Top-Up Loan @ Lowest Rate Of 9%

5) NRI Mortgage Loan: An Indian citizen or foreign national of Indian origin residing outside India for the purpose of employment or business is referred to as NRI. An NRI having a residential property in India can apply for a mortgage loan in India. There is only one bank i.e. ICICI Bank which provides mortgage loans for NRIs provided the NRI is salaried working in the countries other than Iran, North Korea (Democratic People’s Republic of Korea), Cuba, Syria, Sudan, and Cremia Region of Ukraine, Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Nepal, Macau, Hongkong or Bhutan. A self-employed NRI is restricted from availing the benefits of mortgage loan in India as per the Indian funding laws.

Checkout the NRI Mortgage Loan List Of Documents

6) Reverse Mortgage (RM): Since the regular mortgage loan has an age criteria to apply for a loan i.e. up-to 70 years, the concept of reverse mortgage was introduced to allow the senior citizens above the age of 60years to avail the benefits of mortgage loan. In reverse mortgage senior citizens can avail regular/periodical payments from the bank against the mortgage of their house while still retaining the ownership of the house and occupying the same. However the minimum residential life of the property should not be less than 20 years. The interest rates in Reverse mortgages could either be fixed or floating determined by the prevailing market interest rates and may vary from bank-to bank. There are no monthly EMIs and the loan amount along with the interest accrued on the loan amount gets repaid after the death of one of the survivors of the loan application.

Read more on reverse mortgage on – REVERSE MORTGAGE- Loan For elderly

Mortgage loan eligibilty

Mortgage Loan Eligibility

You can check your eligibility for the best banks based on your income, age, current obligations, property valuation and LTV. The FOIR i.e. fixed obligation against income ratio for calculating your income eligibility in mortgage loan is considered at 40%-60% of the monthly net income or net profit for both salaried and self-employed borrowers. For higher loan eligibility you can add an earning co-applicant / co-applicants to your loan application. Maximum upto 6 members can be added as co-applicants to the loan. A co-applicant has to be in your blood relation – he can either be your spouse (husband or wife), children (son or daughter), parents (father or mother) & siblings (brother or sister). You can also enhance your loan eligibility by adding your additional sources of incomes such as, perks, incentives, bonus, gratuity, arrears, paid leaves, rental income, agricultural income, self-employed cash income properly maintained in the registers of and reflected in the ITR, net income and profits of all the businesses of the self-employed, pension income, etc.

The other factors equally important to determine your eligibility are your CIBIL score, past repayment history and track records, your total work experience, income history & stability, job continuity, employment industry, your total assets & liabilities, etc. High CIBIL score and stable jobs/ incomes improves the chances of your loan approval with the banks.

How To Increase Your Mortgage Loan Eligibility

  • Add your legal income from other sources.
  • Add an earning co-applicant to the loan.
  • Go for maximum loan tenure.
  • Mortgage a property with higher market value.
  • Apply with a bank with lowest interest rates.
  • Foreclosing your other obligations such as car loan, personal loan, business loan, consumer loans, credit cards, etc.

Formula for calculating your mortgage loan eligibility

{[Net income per month X FOIR %(40%-60%)] – Obligation OR Deductions} ÷ Per lakh EMI subject to market value of the property i.e. LTV

LTV – Market Value of the property X (50%-70%)

The lower figure between the two- i.e. income eligibility and the LTV factor of the property, will be the final home loan eligibility of the home buyer.

(FOIR means fixed obligation to income ratio, LTV means loan to value, Obligation Or deductions means EMIs of other loans if any.)

CHECK YOUR ELIGIBILITY

EMI Calculator

Mortgage Loan EMI Calculator

With a mortgage EMI calculator check your EMI easily at a single click. Calculate how much EMI you can comfortably pay with the help of the EMI calculator. The EMI is dependent on three important factors i.e. principal borrowings, loan tenure and the rate of interest, therefore enter these details on the EMI calculator, and know your EMI alongwith the interest payable to the bank.

Benefits of using online EMI calculator

  • The EMI calculator exactly shows how much EMI you will pay as your monthly loan instalments.
  • It also shows the total interest payable on the loan amount.  
  • Calculating EMI using manual EMI formula is complex. It increases your chances for wrong calculations and wrong selection of banks. 
  • By calculating the EMIs in seconds, it saves your precious time.   
  • You can compare multiple EMIs with different loan tenures and interest rates and choose the one that is within your budget.

CALCULATE YOUR EMI

Know the best mortgage loan interest rates, mortgage loan in Mumbai, mortgage loan eligibility and compare mortgage loan of various banks online on a single platform on https://www.loanfasttrack.com/. It is a user friendly platform providing detailed information, comparison and evaluation on the mortgage loan process, documentation, eligibility, ongoing offers and key factors such as interest rates, processing fees, LTV, etc. of the top banks just at a single click.

Mortgage Loan Process Overview - MortgageMark.com

Mortgage Loan Process

The loan processing is always a time consuming process and it takes nearly 15-20 working days to get the loan amount on submission of required documents. Below mentioned is the step by step process to help you apply for a mortgage loan.

Step 1: Choose the best bank for a mortgage loan to apply with. Use our online portal https://www.loanfasttrack.com/loan-against-property.html, to compare and evaluate the bank and its offers relating to interest rates, processing fees, LTV, tenure, etc. 

Step 2: On finalizing the best bank, submit your application for the desired loan amount by filling your contact details such as name, contact number, email address & location on https://www.loanfasttrack.com/mortgage-loan/apply-online-now.html.

Step 3: On successful submission of application, receive a call from expert advisors for further tele-discussions of your mortgage requirements.

Step 4: The expert will collect the necessary information on your income, employment, property, occupation, obligation etc. to calculate your loan eligibility and will provide you with best offers from the top banks. You can select the best suitable offer. 

Step 5: The experts will send you the mortgage loan checklist for the chosen bank. The checklist contains your KYC, income documents and property papers.Please refer to the following links for the mortgage loan documentation.

For Mortgage Loan – https://www.loanfasttrack.com/blog/blog/finance/mortgage-loan-list-of-documents-for-salaried-customers/

For Mortgage Loan Balance Transfer – https://www.loanfasttrack.com/blog/blog/finance/document-checklist-for-mortgage-loan-balance-transfer-for-salaried-customers/

Speak to a mortgage loan expert on 9321020476

Step 6: A relationship manager (RM) will be assigned to you who will be your one point of contact for the loan application. The RM will visit you personally to collect the documentation and to sign the mortgage loan form. Cheques towards the processing fees, legal and technical charges will also be collected at the same time.

Step 7: The duly signed form along with the required set of documents will be submitted to the bank for sanction process. The estimated time for loan sanction is 5-10 working days. Property legal and technical (property valuation) will be initiated within these 5-10 working days. The sanction process involves scrutiny of your submitted form and documents, CIBIL check, RCU (Risk Containment Unit) verification for any fraudulent and forged documents, FI (Field Investigation) visits at your residence and office, personal discussion with the credit manager.  

Step 8: The legal and technical verification of the property will be done. A physical inspection of the property will be carried out to ascertain its current market value, age and technical deviation to be sure that banks do not over-lend the cost of the property. A legal scrutiny of the property papers is done to be sure of the clear and marketable title of the property.

Step 9: On satisfactory results of the above your loan will be approved and you will be issued the copy of the approved loan i.e. the mortgage loan sanction letter. You are required to then submit the original property papers with the bank along with the disbursement kit duly signed for your loan disbursement process. The disbursement is the process of another 5-10 working days.

Step 10: The disbursed loan amount will be transferred to your banking account through NEFT or RTGS or by issued cheque for the disbursed loan amount

Morgage Loan Documents

Documents Required For Applying Mortgage Loan

As mentioned above, a mortgage loan processing comprises of three processes:

a) Sanction process

b) Legal & Technical process

c) Disbursement process.

Below mentioned are the list of documents required for all the 3 processes of mortgage loan for both salaried and self-employed.

a) Documents required for sanction process

Salaried Documents

KYC

1. Pan card copy of all applicants.

2. Latest passport size colour photographs of all applicants.

3. Residence proof – Copy of Aadhar card & electricity bill.

Financial Documents

1. Latest 4 months salary slips.

2. Latest 2 years form 16.

3. Latest 6 months salary account statements.

4. Latest 1 year bonus copy.

5. For rental income receivable:

  1. Copy of registered rental agreement.
  2. 12 months latest rental credit statement.

6. For agricultural income receivable: latest 2 years ITR copy reflecting the agricultural

    Income.

7. For employment change:

  1. Copy of joining letter/ appointment letter/ offer letter of the new company.
  2. Copy of resignation letter.
  3. One month salary credit in a bank account.

Other Documents

1. Bank form duly signed and all applicants.

2. Processing fee cheque in favour of bank.

Self-employed Documents

KYC

1. Pan card copy of all applicants.

2. Latest passport size colour photographs of all applicants.

3. Residence proof – Copy of Aadhar card & electricity bill.

Financial Documents

1. 3 years latest financials of the applicant with Saral Copy, Balance Sheet, P&L account, Capital Account – CA certified with membership no. & USDIN no.

2. Latest 3 years Form no-26 AS.

3. Latest 1 year Copy of GST returns – 3B form.

4. Latest 12 months bank account statement of the current account (if any).

5. Latest 12 months bank account statement of all savings accounts.

6. For rental income receivable:

  • Copy of registered rental agreement.
  • 12 months latest rental credit statement.

7. CA certified debtors and creditors statement aging for 1 year.

Other Documents

1. Business profile on the letter head of the company.

2. Business proof – GST registration, Ghumastha or Copy of Aadhar Udyog.

3. Copy of contract letter if any.

4. If self-employed is :

  1. Chartered Accountant – copy of COP & passing certificate.
  2. Doctor – copy of degree certificate.

5. Processing fee cheque in favour of bank.

6. Bank form duly signed and all applicants.

Additional Documents Required For The Balance Transfer Of Mortgage Loan:

7. LOD (list of documents) from the existing loan bank.

8. Repayment track record for 18 months.

9. Outstanding letter copy from the existing loan bank.

b) Documents Required For Legal & Technical Process

For Salaried and Self-employed

1. Copy of prior chain of agreements.

2. OC / CC + approved plan copy.

3. Copy of index 2.

5. Copy of latest property maintenance bill.

6. Copy of share certificate.

7. Copy of society registration certificate.

8. Copy of latest property tax receipt.

c) Documents Required For Disbursement Process

For Salaried and Self-employed

1. Original copy of prior chain of agreement with stamp duty duly paid & registration done along-with index 2.

2. Copy of Occupancy Certificate/CC + approved plans.

3. Original share certificate – if issued.

4. NOC from society duly signed by chairman & secretary- if society is formed.

5. Noc from builder – if society is not formed.

6. Copy of Society registration certificate.

7. Latest copy of property tax receipt.

8. For CIDCO/MHADA Property

  1. Copy of conveyance deed, original NOC & transfer letter from CIDCO/ MHADA – if conveyance deed is executed.
  2. Copy of tri-party agreement & lease agreement – if conveyance deed is not executed.

9. Title search report of the property.

10. Structural audit report of the property for properties more than 50years old.

11. Any other documents:

  1. As per the Legal report of the property.
  2. As per the sanction condition.
  3. As demanded by the credit managers.

12. 7-Security mandate cheques in favor of BANK.

13. Docket kit duly signed by all applicants.

Common Reasons Why Your Mortgage Loan Gets Rejected

The reasons for rejections are case specific but the common reasons for rejections are:

  • Not qualifying for the loan.
  • Your income eligibility.
  • Age criteria.
  • LTV constraints on the property funding.
  • Negative profile, negative industry or negative business.
  • Negative FI (field investigation) visit.
  • Your low CIBIL score.
  • Low CIBIL score of the co-applicant/ co-applicants.
  • If you are a frequent job hopper.
  • If you are a loan defaulter.
  • Black listed property, project, area, builder or developer.
  • If you are an NRI working in countries such as Pakistan, Afghanistan, Nigeria, Bhutan, China, Nepal, Bangladesh, Sri Lanka,Iran, North Korea (Democratic People’s Republic of Korea), Cuba, Syria, Sudan, and Crimea Region of Ukraine, Macau, Hong Kong.
  • Legal issues in property such as suit filed, unclear title, property not registered, stamp duty not paid, no ownership rights, etc.
  • Technical issues in property such as property valuation, illegal construction, illegal extensions, property age, etc.
  • Misplaced, missing or property papers lost.
  • Processing fees cheque bounce. Having insufficient balances in all subsequent bank accounts for processing charges. 
  • Loan end-use is not justified.

You need to be careful when applying for a mortgage loan. Multiple rejections of your loans from the banks carry a negative impact on your CIBIL history thereby hampering your CIBIL score.

Dealing With Increasing Interest Rates

Many times you come across a situation where your rate of interest keeps increasing and at times your rate of interest does not reduce despite the reduction in the lending rates of the banks. (Lending rates of the banks fluctuates to the fluctuations in the repo rates announced by the RBI.) While the hike in the interest rates is immediately implemented by the banks, the implementation of reduced interest rates are often delayed and at times aren’t transferred unless you pay a conversion cost to convert your high interest rate mortgage loan to a low interest rate mortgage loan.

With changing economic conditions and inflation in the country the Reserve Bank of India keeps altering the repo rates for the banks, which further alters the lending rates of the banks that further fluctuates your mortgage interest rates. So if your interest rates remain unchanged irrespective of the reduction in the interest rates by the banks, it probably is a time for you to transfer your mortgage loan to a new bank with low interest rates on mortgage loan. Switching your bank will also benefit you from availing, longer repayment tenures, top-up facility with increased loan tenures, opportunity to shift to a fixed interest rate mortgage loan, improved & satisfactory services of the new bank, etc. However to be able to balance transfer your mortgage loan you need to have a proper repayment history of your EMIs. Timely repayment of your loan EMI, no delayed payments, no EMI bounces forms a strong base for your balance transfer which also gives you an upper hand to negotiate with the banks on interest rates and processing charges.

Reduce your interest rates CLICK to APPLY for a Mortgage Loan Balance Transfer @ 9%.

Motgage Loan FAQ

Mortgage Loan FAQ

What is a mortgage loan?

A loan provided by a financial lender i.e. by bank/NBFC against the collateral of your property which can be residential, commercial or industrial is called a mortgage loan.

Who can apply for a mortgage loan?

An eligible individual who is either salaried or self-employed or professional with regular flow of income can apply for a mortgage loan. A company- proprietorship firm, partnership firm, private limited, public limited can also apply for a mortgage loan. 

What are the current interest rates for mortgage loans in India?

Present interest rates for mortgage loans in India range between – 8.75% to 13%.

What is the turnaround time for loan processing?

Total turnaround time for processing a mortgage loan takes 10-20 working days.

  • Sanction process takes 5-10 working days.
  • Disbursement takes 5-10 working days.

What is the maximum loan tenure I can get?

Your mortgage loan tenure largely depends on your age and the age of your property. However the maximum loan tenure banks provide is for 15 years, while some banks also provide upto 20 years.

How much mortgage loan can I get?

There is no upper ceiling limit for taking a mortgage loan. It is subject to your income eligibility and the market value of your property.

What is the total cost for taking a mortgage loan?

You are required to pay all banking charges and government charges before taking the disbursement of the mortgage loan.Processing fees (0.25%1%), legal & technical charge (Rs.5000-Rs.10,000), franking charge of 0.10%-0.20% on the loan amount and other miscellaneous charges such as CERSAI (Rs100), CIBIL (Rs.100) , etc. plus the applicable GST of 18% on the mentioned charges.

Can I transfer my mortgage loan? Are there any foreclosure charges?

Yes you can anytime transfer your mortgage loan to another bank unless it is in the fixed duration under the fixed interest rate mortgage loan. Foreclosure charges for fixed rate mortgage loans can cost you 2%-5% on the outstanding loan amount. The charges vary (for salaried to self-employed customers) from bank to bank.

Transferring the loan to another bank means the loan will be treated as a new mortgage loan and you will have to once again pay all the relevant charges for the loan namely- processing fees (0.25%-1% on the loan amount), administrative cost, legal & technical cost (Rs.5000-Rs.10,000), stamp duty cost of 0.20% on the loan amount, etc.

Is there any Lock-In period for mortgage loans?

There is no lock-in period for mortgage loans with floating interest rates. For mortgage loans with fixed interest rate lock-in periods may vary from bank to bank, which can be 1year, 3years, 5 years, 7years or 10years.

Can I have a joint loan application? Who can be my co-applicant?

Yes you can jointly apply for your mortgage loan, with your spouse, parents, children and siblings. An co-applicant is the co-borrower for the loan and is equally responsible for loan repayment alongwith the primary borrower.

What are the tax benefits on a mortgage loan?

There are no tax exemptions for the principal amount in mortgage loans. However for the interest paid you can claim the tax exemptions if you maintain the appropriate documents to justify the end-use of the mortgage loan, such as:

  1. Interest can be claimed as business expenses under section 37(1) if the end-use for the mortgage loan is for business purposes.
  2. Interest can be claimed as business expenses under section 24(b) if the end-use for the mortgage loan is for purchasing house or home renovation or repairs.
  3. No interest exemptions if the end-use for the mortgage loan is for personal reasons such as, children education, marriage expenses, etc.

How can I increase my mortgage loan eligibility?

  • By adding your legal income from other sources such as perks and reimbursements from the company, rental income, agricultural income, etc.
  • By adding an eligible and earning co-applicant to the loan.
  • Go for maximum loan tenure.
  • Mortgage a property with higher market value.
  • Apply with a bank with lowest interest rates.
  • Foreclosing your other obligations such as car loan, personal loan, business loan, consumer loans, credit cards, etc.

I am an NRI working in London. Can I apply for a mortgage loan?

Yes. You can apply for a mortgage loan in India, provided you are employed as salaried in London. Self-employed NRI cannot apply for mortgage loans in India. An salaried NRI working in countries apart from Iran, North Korea (Democratic People’s Republic of Korea), Cuba, Syria, Sudan, and Crimea Region of Ukraine, Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Nepal, Macau, Hongkong or Bhutan, can apply for a mortgage loan in India.

Can I apply for top-up on my existing mortgage loan? What will be the rate of interest?

Yes, you can apply for a top-up loan on your existing mortgage loan provided you have made the timely repayments of your loan EMIs. It can be obtained with minimum documentation, but the interest rates on top-up will be 0.25%-1% higher than your existing mortgage rate.

However your top-up rate remains the same as the mortgage rate, when you apply for a top-up loan along-with the balance transfers to other banks.

How much top-up can I get on my mortgage loan?

The top-up eligibility on mortgage loan is subject to your income eligibility and the market value of the property i.e. the LTV (Loan To Value) criterias of the banks.

Can I get a mortgage loan with any existing loan?

Yes, you can get a mortgage loan along with your other existing loan provided you are capable of paying the additional mortgage EMIs. Your income eligibility & repayment track of existing loans is important for you to qualify for additional mortgage loans.

Am I eligible for a mortgage loan despite a poor credit score?

Yes you can be eligible for a mortgage loan with poor credit score, provided you have a valid justification for the poor scores. However, banks may charge you higher interest rates and processing fees for such cases.

How do I reduce my mortgage loan interest rates?

Can I repay my loan ahead of schedule? What are the charges?

Yes. You can repay your loan ahead of schedule by making lump sum payments towards part or full prepayment of the loan amount.

For floating rate mortgage loans- Nill Pre & part payment charges.

For fixed rate mortgage loans- Pre & part payment charges are applicable.

(Please note: Banks criterias for foreclosure charges differ for salaried and self-employed customers which also varies from bank to bank.)

Is it possible to get a mortgage loan on grampanchayat property?

Grampanchayat properties are generally not considered for the mortgage loans by banks. However there are only some NBFCs who provide loans on grampanchayat properties. Interest rates on grampanchayat properties are generally high and

starts from 15% to 19%. The processing fees and the cost for processing your mortgage loan on grampanchayat property is also high.

What documents do I require to apply for a mortgage loan?

Your KYC (pan card, aadhar card, residential and office proof), financial documents (4 months salary slips, 2 years form 16, 6 months bank account statement, 3 years ITR copy, business profile & business proofs) and property documents (prior chain of agreement, OC/CC + plan copy, Index 2, share certificate, property tax and property maintenance) are required for applying for a mortgage loan.

Refer link https://www.loanfasttrack.com/blog/blog/finance/mortgage-loan-list-of-documents-for-salaried-customers/ for detailed list of documents required.

&

https://www.loanfasttrack.com/blog/blog/finance/document-checklist-for-mortgage-loan-balance-transfer-for-salaried-customers/ for detailed list of documents required for mortgage loan balance transfers.

What is the difference between home loan and mortgage loan?

Home loan and loan against property i.e. mortgage loan are often used interchangeably, but the two are different loans. A loan taken to purchase a residential property whether under-construction or ready to move from a builder or in resale is called a home loan; while a loan taken on your already existing residential, commercial and industrial property is called a mortgage loan. The difference in both can be attributed to many points such as its end-use, LTV criteria, tenure, loan charges, tax benefits, etc. Get detailed information on its differences on our previous blog “Difference Between Home Loan And Loan Against Property”.

What is the difference between mortgage loan and personal loan?

Although both look similar in emergencies and both loans can be taken to fulfill your immediate requirement of funds, both differ with respect to interest rates, security, tenure, closure charges, closure conditions etc. Since property is provided as collateral in mortgage loans it is termed as a secured loan and therefore its interest rates are low in comparison to the personal loan which is an unsecured loan given only against your income earnings. 

Does it affect my co-applicant if I default my mortgage loan?

A co-applicant is also a co-borrower to the loan which means that if you fail to pay your loan EMIs on time or pay with delay it hampers your credit history and gets reflected in your CIBIL records as loan defaults or delayed payments which further reduces your &

your co-applicant’s CIBIL scores.

Why choose Loanfasttrack?   

If you are worried about how to get a low cost mortgage loan in Mumbai, Loanfasttrack is the answer to your worry.

If you want to transfer your mortgage loan @ lowest rate of 9% and below, Loanfasttrack is your guide. 

If you are looking for a genuine service provider in Mumbai, Loanfasttrack is at your service &

If you want to meet your financial emergencies through a secured way of low cost mortgage loan, reach us on https://www.loanfasttrack.com/. Loanfasttrack will provide you hassle free services at your doorsteps with comparative evaluations of more than 13+ top banks, with no additional cost. You can also contact us on 9321020476 or email on info@loanfasttrack.com.

About Loanfasttrack- Loanfasttrack is a Mumbai based loan provider company since 2015 offering loan services in Mumbai on– housing loan in Mumbai, mortgage loan in Mumbai, personal loan in Mumbai, business Loan in mumbai, unsecured business loans,home loan transfer, top-up loans, car loans, educational loans and loan transfers.

It also helps you:

√ To find the best bank for home loan

√ To get lowest home loan rates in Mumbai

√ To get an instant loan in Mumbai

√ To get instant personal loan in Mumbai & business loan in Mumbai

√ To make you qualify for the maximum loan against property eligibility

√ To get a low cost home loan balance transfer

√ To get assured low interest rates for loan against property in Mumbai

With the lockdown being lifted in Mumbai, we have also resumed with our physical operations at Loanfasttrack. We assure safety while providing hassle free documentation at your doorsteps. With the constraints of limited working staff of the bankers, and the banks safety norms to disinfect the physical copies of the collected applications and documentations, we have temporarily revised the loan processing time by additional 7-9 working days. Loanfasttrack fully supports the bank’s safety norms and measures.

All About Mortgage Loan

by admin
Mortgage Loan

A mortgage is a type of secured loan as it is secured against the collateral provided. The collateral means pledging of property to obtain the loan. Such a property can either be residential or commercial. The mortgage loan is termed as Loan Against Property (LAP).

Let’s highlight some important aspects of the property in mortgage loan.

1) The Property can be either residential or commercial.

2) The property should be an ownership property. It can be a self or jointly owned a parental owned property. Third party ownership property cannot be a mortgage.

3) The age of the property is important to ensure the maximum loan tenure. For the properties which are more than 50years of old, a structural audit report is mandatory while applying for a mortgage loan.

4) The market value of the property is important to ascertain the current market value of the property, depending on which bank decides the funding for mortgage loan.

5) There are properties that cannot be considered for a mortgage because of reasons like falling in negative areas of the bank, chawl property, pagadi property, etc.

6) OC , CC & Plan Copy along with index 2 are the mandatory property documents along with the prior chain of agreement. OC is the occupancy certificate which is mandatory in property more than 10years old. While CC- completion certificate along with blue print i.e. master plan copy is mandatory for the properties which are less than 10 years old.

7) Properties which are more than 25-30years of old, property tax is mandatory for mortgage in the event of absence of OC & CC + plan copy.

8) In the event of lost/missing chain of agreement, a prior FIR with public notice is mandatory along with the no claim letter if the property is to be mortgaged.

9) The property title should be clear. The title should not reflect any law suit when mortgaging the property.

To scrutinize the above points means carrying out the legal and technical of the property, which is the most important process in the mortgage loans. The bank charges the borrower for such scrutiny under the head legal and technical changes. The Charges differ from banks to banks/NBFCs.

The eligibility for the loan is determined as the lowest of the two – i.e. the income eligibility of the borrower subject to the LTV (loan to value) factor of the property.

The rate of interest, processing fees, closure conditions, etc differs from bank to banks.  

Know a day mortgage is also provided as an OD-overdraft facility, such bank product is named as LAP-OD which was basically introduced for self-employed mortgage borrower to meet their working capital requirement in the business, but recently the product is extended to the salaried working class as well by few of the lender bank/NBFCs. The rate of interest with LAP-OD defiantly differs from the regular mortgage interest rates. It is 1-2% higher in comparison to the mortgage rate of interest.

In addition to provide the benefits of the mortgage facility to the senior citizens and the retired people above the age of 60 years, the Union Government of India has introduced the concept of Reverse Mortgage. It is a concept where the borrower does not have to repay the loan borrowed during his life, lifetime or till such time he continues to stay in the house. The entire loan balance along with the interest + mortgage insurance availed if any becomes payable only when the borrower sells the house or moves away permanently or when the last surviving borrower dies. Such extended benefits of a reverse mortgage are made available to the elderly by few banks & NBFCs, provider banks are majorly the nationalized banks.

Income Tax Benefits On Home Loan

by admin

 Home Loan Tax Benefit In India Is Available For Both Housing Loan Interest And Principal Deduction Under Section 24(b), 80C, 80CCE & Section 80EE Of Income Tax Act 1961.

Income Tax Rebate On Home Loan For FY 2020-2021

The 2020 financial budget has not altered the housing loan tax rebates for the home loan borrowers other than: a) Increasing the time limit for availing the loans for houses under affordable housing schemes announced by the government till 31st March 2021. Which means that a home loan borrower can claim the benefits of additional deduction on home loan interest of up-to Rs.50,000/- till 31st March 2021. The benefit is provided under section 80EE of Income Tax Act, 1961 & b) The borrower owning more than one property cannot claim any of the properties as self-occupied to maximize the tax benefits.

The following grid highlights the sections of the Income Tax Act that provide home loan rebate to the borrowers.

Home Loan Deduction In Income Tax For FY 2020-21
Home Loan Tax Benefit Under Section Nature Of Home Loan Deduction In Income Tax Maximum Tax Amount Deductible
80C Housing loan principal repayment Rs.1.5 Lakhs

(Including one-time stamp duty and registration cost)
24(b) Deduction for interest on housing loan Rs.2 Lakhs (for self-occupied properties)

No limit (for let-out properties)
80EE Additional home loan interest deduction for first time home buyers Rs.50,000/-

 

The EMI paid by the borrower towards the repayment of the borrowed funds from the Bank comprises two components i.e. the principal and interest amount, both of which can be separately claimed by the borrower for tax saving on housing loan under section 80C & section 24(b) respectively of the Indian Income Tax Act, 1961. To claim the home loan tax benefits under the two sections, the owner/co-owners of the property must also be the joint borrower/co-borrower to the housing loan.

Find below the tax benefits the borrower can enjoy:

  • Tax benefit on second home loan.
  • Tax benefits on home loan for joint ownership property.
  • Income tax rebate on home loan for under construction property.
  • Tax benefits for first time home buyers
  • Tax exemption on multiple home loans.
  • Tax benefits for interest paid for housing loan for self-occupied property.
  • Tax benefits for interest paid for housing loan for let out property.
  • Pre EMI interest tax benefit.
  • Home renovation loan tax benefit.
  • Home improvement loan tax benefit.
  • Home loan top up tax benefit.
  • Loan against property tax benefit/mortgage loan tax benefit.

 

Everything You Must Know Before Applying For A Housing Loan

 

Tax Benefits For Housing Loan Under 80C For Principal Repayments

Under section 80C the borrower enjoys the home loan principal repayment tax benefits. The maximum deduction under section 80C for the borrowers is available for up-to Rs.1.5 Lakhs per year. Home loan principal tax benefit can be claimed by the borrower on all types of residential property whether, first home- resale or new home (Quick guide for difference in builder home loan & resale home loan), joint ownership property, self-occupied or rent out property.

The following are the prerequisites to avail the tax benefits on principal repayment on housing loan deduction under section 80C:

  • 80C housing loan benefits are available only on the residential house property for the borrower who has taken a home loan for the purpose of construction or purchase of new ready to move property.
  • The 80C house loan deduction in income tax can be claimed only on the completed/ ready to occupy properties. To claim this home loan 80C deduction the borrower first needs to complete the construction, only then he can claim for the deduction.
  • Additionally, if the borrower sells his property within 5 years of taking the possession of the property, he cannot claim the 80C home loan deduction. Moreover, any deduction claimed by the borrower will be reversed in the year in which the property is sold and the same will reflect as income of the borrower in the year of sale of the property.
  • The borrower is allowed to claim the housing loan principal 80C deduction on both ownership properties whether self-occupied by him or let-out i.e. given on rent.
  • Maximum deduction under 80C that can be claimed by the borrower in a year is up-to Rs.1.5 Lakhs.
  • One-time stamp duty and registration fee can also be claimed under this deduction of 80C repayment of housing loan in the year of purchase of the property. (Click to know the list of all costs incurred for availing home loan)
  • In case of joint home loans availed by the borrower, both borrower and co-borrower can apply for the deduction on principal repayment of housing loan 80C for Rs.1.5 Lakhs each per financial year.
  • Principal repayment of housing loan 80C deduction is not available on the second home and the under-construction property being purchased by the borrower.
  • If the borrower owns more than two properties, he can claim any of the two houses as self-occupied and claim aggregate deduction on the principal repayment up-to Rs.1.5 Lakhs per year.

 

Home Loan Interest Tax Benefits Under Section 24b Of Income Tax Act

Sec 24b of income tax act deals with the housing loan interest tax exemption. Maximum housing loan interest exemption limit under this section is up-to Rs.2 Lakhs per year. Housing loan interest rebates can be claimed by the borrower on all types of residential property whether, first home, second home, under-construction property, joint ownership property, self-occupied or rented out property or deemed to be let out property.

The following are the prerequisites to avail the home loan interest tax exemption under section 24b:

  • Home loan interest tax deductions are available for any type of loan whether commercial, personal loan or residential house property loan, etc. taken by the borrower for the purpose of construction or purchase of new ready to move/under-construction property or for the repair/reconstruction of the house property. (Read on the advantages for purchasing a builder and resale property)
  • The housing loan interest deduction in income tax is available on the accrual basis and not on the paid basis.
  • Housing loan interest maximum deduction applicable for self-occupied property is up-to Rs.2 Lakhs per year while there is no housing loan interest limit for let out property.
  • The home loan interest exemption in income tax is applicable for any loan amount whether it is borrowed from Bank/NBFC, private financier/ patpedhi or friends or relatives.
  • The deduction under 24b can be claimed on two or more houses and hence the deduction can also be claimed on two or more housing loans with the maximum housing loan interest deduction limit of up-to Rs.2Lakhs in a year.
  • Home loan interest rebate in income tax can be claimed for both self-occupied as well as let out property.
  • One-time service fee, brokerage charges, prepayment charges, etc. can also be claimed under this section for tax rebate on housing loan interest.
  • In order to claim the maximum interest on housing loan limit of up-to Rs.2 Lakhs in a year the construction of the property must have been completed within 5 years from the end of the financial year in which the borrower has taken the loan.
  • If the construction of the property is not completed within the 5 years then the housing loan interest tax benefit will be restricted to Rs.30,000/- in a year.
  • Unlike the selling restrictions on the property to avail benefits on home loan principal rebate there are no restrictions on the sale of the property to avail benefits on housing loan interest rebate in income tax.
  • Deduction of interest on housing loan in case of joint ownership:

In case of joint home loans availed by the borrower, both borrower and co-borrower can apply for tax rebate on home loan interest for up-to Rs.2 Lakhs/ Rs.30,000/- each in every financial year for self-occupied property. No home loan interest exemption limit for let out properties.

  • For under-construction property purchased by the borrower the income tax rebate on home loan interest before possession for the aggregate interest paid can be claimed in equal parts in the next 5 financial years after having taken possession of the property, provided the loan is taken only for the purchase or construction of the property. Interest on home loan deduction in income tax for under construction property is not available for the repairs/renovations/renewals/reconstruction of the property.

 

Home Loan Interest Rates꘡Compare Rates Of Top Banks

 

Tax Deduction Under Section 80EE & Section 80EEA For Additional Interest On Housing Loan

Sec 80EE of income tax provides additional interest benefits over and above the housing loan interest income tax exemption of section 24b, for the loan borrower who is purchasing the house for the first-time. Unlike section 24b for interest paid on housing loan deduction, the deduction us 80EE & 80EEA is allowed from the gross total income and not from the income under house property. The borrower cannot claim deduction under both sections at a time. If the borrower claims the deduction under section 80EEA he will no longer be eligible to claim deduction under section 80EE of the income tax act and vice-a-versa.

 

Why Home Loan Interest Rates Of NBFCs Higher Than Banks

 

Section 80EE Deduction

Income tax section 80EE provides the additional housing loan interest tax rebate of Rs.50,000/- per year for the home loan borrower of the first residential house. The interest deduction will be available on actual interest paid and not on the accrual basis.Given below are the prerequisites to avail the additional income tax benefit on home loan interest under 80EE section of income tax:

  • 80EE income tax deduction is applicable only on the loan taken for residential house property taken only for the purpose of purchase or construction of the house.
  • 80EE section deduction available only for the loans sanctioned in the financial year of 2016-2017.
  • The value of the property should not exceed Rs.50 Lakhs and the loan sanctioned should not exceed Rs.35 Lakhs. (Read on Small Value Home Loans)
  • The maximum 80EE deduction limit is Rs.50,000/- per year till the repayment of the loan continues.

Section 80EEA Of Income Tax Act

Income tax section 80EEA provides the additional home loan interest tax rebate on PMAY-CLSS schemes for up-to Rs.1.5 Lakhs per year to the borrower, over and above the interest-income tax rebate on housing loan of section 24b. Given below are the prerequisites to avail this additional benefit of 80EEA income tax.

  • The deduction is applicable only for the individual borrower on the loan taken for residential house property taken only for the purpose of purchase or construction of the house.
  • Available only for the loans sanctioned in the financial year of 2019-2020.
  • The property value should not exceed Rs.45 Lakhs.
  • The property area should not exceed the maximum area of 90 sq. mtr.
  • The borrower must not be the owner/co-owner of any other pucca house.

Is your CIBIL score low? Know from Loanfasttrack, how to apply for a home loan with low CIBIL score.

Additional Read: CIBIL and its significance in home loan.

 

Tax Benefits On Joint Home Loans

Although it is mandatory with many lender Banks/NBFCs to have a co-applicant for the home loan application, the joint home loans not only helps to enhance the home loan eligibility & secure a interest concession with women co-applicant but it also provides the tax benefits to both borrower and co-borrower/co-borrowers of the loan. (Know more on housing loan benefits for women borrowers in India). All borrowers/applicants can claim the joint home loan tax benefit on the principal as well as the interest paid as per the maximum deduction limit allowable under section 80C & 24b of the Indian Income Tax Act, 1961 provided the following conditions are meet:

  • If home loan is taken in joint name tax benefit will be available only when all the borrowers/applicants are also the co-owners to the property.
  • Each can claim the home loan principal tax exemption under section 80C for a maximum amount of Rs.5 Lakhs per year.
  • Each can claim the home loan interest deduction under section 24b for a maximum amount of Rs.2 Lakhs per year.
  • Each can also claim the additional interest benefits of up-to Rs.1.5 Lakhs per year under section 80EE & 80EEA, provided it is their first house.

 

Income Tax Benefits On Multiple Properties & Income Tax Benefit On Second Home Loan

Investment in assets especially in immovable assets such as properties/plots is a common and popular form of saving & investments by the people. (Quick guide for 8 Best Investment Plans For SAVINGS).The borrower makes profits on the appreciation in the value of the property and it also fetches him rent if the property is rented out forming an additional source of income for him. Moreover, if the borrower has invested in multiple properties by taking out home loans, he can also enjoy the income tax benefits on two self-occupied properties provided the following conditions are fulfilled.

  • In case of more than two properties owned by the borrower, the borrower can claim any of the two houses as self-occupied and the other properties shall be deemed to have been let out.
  • The maximum aggregate deduction available for principal repayment under section 80C is restricted to Rs.1.5 Lakhs per year for all home loans taken together for multiple properties.
  • On the two self-occupied houses the maximum deduction for housing loan interest paid under section 24b is restricted to Rs.2 Lakhs per year for both houses taken together.
  • For the let-out properties the entire interest paid against the rent received can be claimed for deductions under section 24b.
  • On more than two properties the borrower has to pay tax on the basis of notional rent received from the property.

 

Home Loan Tax Exemption For Under Construction Property

The borrower who has purchased an under-construction property and have taken a housing loan for the purchase of the said under construction property can enjoy the following tax benefits on home loan:

  • No under construction home loan tax benefits under section 80C for principal repayment of the loan.
  • Home loan interest tax exemption under construction property can be availed under section 24b of the income tax for the maximum amount of up-to Rs.2 Lakhs in a year provided the construction of the property has been completed within the 5 years from the home loan taken.
  • The pre-construction interest on housing loan can be claimed in equal instalments in next 5 financial years after having taken possession of the property.
  • If the construction is not completed within 5 years the interest exemption is restricted to Rs.30,000/- per year.

The home loan tax benefit for under construction property is applicable only if the borrower has taken the loan for the purchase or construction of the property. The deduction is not applicable if the loan is taken for repairs/renovations/renewals/reconstruction of the property.

Click to know the important loan facts before purchasing an under-construction property.

 

HRA And Home Loan Tax Exemptions

We have already discussed the tax exemptions available on the types of properties owned by the borrower. Let’s illustrate with a hypothetical situation- if the borrower is staying on rent and has also booked a property availing a housing loan from the bank. Under such circumstances the borrower will not only enjoy the standard benefits of home loan but will also be eligible for claiming HRA benefits under section 10(13A) & section 80(GG) of the Income Tax Act, 1961, explained in detail below.

HRA Exemption In Income Tax Under Section 10(13A)

  • The deduction is available only for the salaried employees whose salary breakup includes HRA component.
  • The borrower must be staying in a rented accommodation.
  • The maximum house rent deduction in income tax allowed is minimum of:
  • The actual HRA amount received from the employer.
  • Actual rent paid per annum less 10% of the annual salary.
  • 50% of the salary if staying in metro cities or 40% if residing in non-metro cities.
  • The borrower is allowed to claim HRA deduction in income tax even if he is paying rent to his family members, provided it is backed with the required evidence.
  • The borrower is also allowed to claim this house rent exemption in income tax even if he owns a house but is staying on rent in another city provided the house he owns is self-occupied and is not let-out.

 

HRA Rebate In Income Tax Under Section 80(GG)

  • The deduction is available for self-employed and salaried employees who do not receive HRA from their employer.
  • The borrower must be staying in a rented accommodation.
  • The maximum deduction allowable is minimum of:
  • 60,000/- per year.
  • 25% of the adjustable gross total income.
  • Actual rent paid minus 10% of basic salary.
  • If the borrower owns any other self-occupied residential property in any other place, no deduction for HRA in income tax is allowed.

 

Chart For Best Home Loan Deals

Bank Name Rate Of Interest Processing Fees Tenure
ICICI Bank 6.90% p.a. – 8.05% p.a. 0.30% of the loan amount + applicable GST Up-to 30 years
HDFC Ltd. 6.90% p.a. – 7.85% p.a. Up-to 0.50% – up-to 1.50% of the loan amount + applicable GST Up-to 30 years
Canara Bank 6.90% p.a. – 8.90% p.a. Rs.10,000/- + applicable GST Up-to 30 years
CLICK to get the complete chart

 

FAQs

 

  1. Who is eligible for home loan tax benefits?

Ans: A home loan borrower who has taken a loan for the purchase or construction of the residential property either for self-use or let-out is eligible to claim tax for the principal repayment and the interest paid. The loan co-borrower also being the co-owners of the property is also eligible for the tax exemptions.

The home loan customer gets tax benefit under section 80C (for principal repayment) & section 24(b) (for interest paid) and 80 EE/80EEA (for additional interest).

 

  1. How much is the 80C maximum limit?

Ans: The maximum limit for the repayment of home loan principal in 80C is up-to Rs.1.5 Lakhs per financial year. In case of joint home loan tax rebate each applicant can claim the home loan principal 80C deduction of Rs1.5 Lakhs per year.

 

  1. Home loan interest comes under which section of income tax?

Ans: The home loan interest exemption section of income tax is section 24(b), section 80E & 80EEA for additional interest benefits for the first-time home buyers.

 

  1. Are there any tax benefits on loans taken from friends?

Ans: The borrower is allowed to claim tax benefits only on the interest component under section 24(b) of the income tax act for the loans taken from the friends provided it is properly documented with an interest certificate from the friends. On the other hand, the friends will be liable to pay tax on the interest received on the funds lent.

 

  1. Does home loan insurance cover provide tax deduction?

Ans: Banks usually provide home loans with an insurance cover to the borrowers, the premium of which is either paid upfront in hefty lump sum i.e. single premium by the borrower or the banks pays the same on the behalf of the borrower and club it with the home loan amount whereby he repays it through EMIs. If the borrower pays the premium upfront, he can claim the home loan insurance tax benefits under section 80C of the Income Tax Act,1961 & if the premiums are clubbed to the home loan EMIs no tax deductions are available.

 

  1. In case of joint home loans, what are the home loan co applicant tax benefits?

Ans: The co-applicant can also claim the income tax benefits for principal repayment under section 80C for Rs.1.5 Lakhs p.a. as well as for the interest paid under section 24(b) for maximum up-to Rs.2 Lakhs p.a.

 

  1. Is home loan top-up eligible for tax exemption? How much is the top up loan on home loan tax exemption?

Ans: The home loan top-up is eligible for tax exemption under both sections of income tax, viz. Section 80C (for principal repayment) & section 24(b) (for interest paid) provided the top-up amount is used only for the purchase/construction/repairs & renovations of the property and is backed up with the necessary evidence – invoices, receipts, agreements & legal documents.

 

  1. Are there any pre-EMI tax benefits?

Ans: Pre-EMI is generally associated with under construction properties. In pre-EMI a borrower pays only interest towards the partial disbursements of his loan which has no impact on the principal amount & loan repayment tenure. Therefore, in Pre-EMI the borrower does not get any benefits on the principal repayment but can claim interest paid for housing loan for under construction property. The aggregate interest paid can be claimed in equal parts in the next 5 financial years after having taken possession of the property, provided the loan is taken only for the purchase or construction of the property.  Pre EMI interest deduction under section 24 is not available for repairs/renovations/renewals/reconstruction of the property.

For complete knowledge on Pre-EMI click to read our previous post “Is Pre-EMI Better Than Full EMI.”

 

  1. How to claim tax benefits on home loan?

Ans: A salaried home loan borrower can claim tax benefits by submitting the interest certificate to his employer while others can claim the benefits by filling their income tax returns per financial year.

 

Loanfasttrack is a Mumbai based loan provider company since 2015 offering loan services in Mumbai on– housing loan in Mumbai, mortgage loan in Mumbai, personal loan in Mumbai, business Loan in Mumbai, unsecured business loans, home loan transfer, top-up loans and loan transfers. Loanfasttrack is a direct sales associate with leading banks namely, ICICI Bank, HDFC Ltd, Canara Bank, Citi Bank, Piramal Housing Finance, etc.

 

Contact Loanfasttrack on: www.loanfasttrack.com or call on 9321020476 or email on info@loanfasttrack.com.

Loanfasttrack’s specialized services includes providing:

 

Other popular posts of loan Loanfasttrack.

 

 

 

(BOB) BANK OF BARODA HOME LOAN

by admin
Bank of Baroda home loan
Bank Of Baroda Is Rated As One Of The Top Nationalized Banks In India. Home loan Baroda Bank is available for all eligible borrowers with EMIs starting from ₹655 per lakh. Bank Of Baroda current home loan interest rate starts from 6.85% p.a. over extended loan tenures up to 30 years with processing fees starting from 0.25% of the loan amount.

Key Features Of Bank Of Baroda Housing Loan:

  • BOB is the lowest interest rate home loan provider.
  • Bank Of Baroda home loan interest rate today starts from 6.85% p.a.
  • Lowest per lac EMI starting from Rs.655/-
  • Uniform Bank Of Baroda ROI for home loan for salaried, self-employed, self-employed professionals & NRIs.
  • Longer repayment tenure for 30 years available.
  • Pre-approved home loan facility available.
  • Home loan interest in Bank Of Baroda is calculated on daily reducing balance.
  • Home loan BOB interest rate is linked to repo rate.
  • Nil prepayment charges for floating Bank Of Baroda loan interest rates.
  • Top-up loans can be applied up-to five times during the loan tenure.
  • Loan applicant can add a close relative as a co-applicant to increase his home loan eligibility (co-applicant necessarily need not be a joint owner of the property).
  • Loan applicants receive a complimentary Bank of Baroda Credit Card.
  • Loan applicants get a free Bank Of Baroda home loan insurance cover with every home loan.
  • Loan applicants also get rewarded with a concession of 0.25% on Car Loans. 
  • Loan applicants get access to high-end banking technology for easy repayment of housing loans.
  • PMAY credit linked subsidy schemes available with subsidy up-to Rs.2.67 lakhs.

Bank Of Baroda Home Loan Interest Rates 2020 Of Various Home Loan Schemes

Baroda Home Loan 6.85% p.a. – 8.20% p.a.
Baroda Home Improvement Loan 6.85% p.a. – 8.20% p.a.
Baroda Home Loan Advantage 6.85% p.a. – 8.20% p.a. For loans up-to Rs.75 Lakhs.   7.10% p.a. – 8.45% p.a. For loans above Rs.75 Lakhs.
Baroda CRE Home Loan 7.10% p.a. – 8.45% p.a.
Baroda CRE Home Loan (Advantage) 7.10% p.a. – 8.45% p.a. For loans up-to Rs.75 Lakhs.   7.35% p.a. – 8.70% p.a. For loans above Rs.75 Lakhs.
Baroda Top Up Loan 7.45% p.a. – 8.80% p.a.
Baroda Mortgage Loan 8.05% p.a. – 13.20% p.a.
Baroda Ashray (Reverse Mortgage Loan) 9.20% p.a.

Note:    (i) Housing loan interest rates Bank Of Baroda are subject to change without prior notice.

(II) Home loan rate of interest bank of baroda is linked to the Baroda Repo Linked Lending Rate (BRLLR) of the bank.

Bank Of Baroda Home Loan Details

Eligible Profile Salaried, Self-Employed Professionals, Self-Employed Non-Professionals, NRIs, OCI & PIOs, firms & companies.
Age Criteria Minimum age is 21 years (co-applicant-18 years) & the maximum age is 70 years.
Loan Amount Maximum up-to Rs.10 Crores.
Repayment Tenure Maximum up-to 30 years.
Collateral Accepted Constructed or purchased homes, (at times also) insurance policies, government promissory notes, shares and debentures, gold ornaments etc.
Who Can Be The Loan Co-Applicants Spouse, Father, Mother (including Step Mother), Son (including Step Son), Son’s wife, Daughter (Including Step Daughter), Daughter’s husband, Brother/sister (Including step brother/sister), Brother’s wife, sister (including step sister) of spouse, Sister’s husband, Brother (including step brother) of spouse. Click to get complete information on Co-Applicant in home loans.
Bank Of Baroda Types Of Loans: – Bank Of Baroda repo linked Home Loan, Bank Of Baroda Top Up Loan,  Bank Of Baroda NRI Home Loan, Bank Of Baroda Pre Approved Home Loan, Bank Of Baroda Home Renovation Loan, Bank Of Baroda Home Improvement Loan, Bank Of Baroda Home Loan Takeover, Bank Of Baroda Plot Loan/Bank Of Baroda Land Loan, Bank Of Baroda Mortgage Loan,  BOB Reverse Mortgage Loan.
BOB Per Lakh EMI Bank Of Baroda home loan EMI starts from Rs.655/- per lakh.
BOB Bank Home Loan Interest Rate Bank Of Baroda bank home loan interest rate starts from 6.85% p.a.
Bank Of Baroda Home Loan ROI Bank Of Baroda housing loan rate is linked to repo rate.
Bank Of Baroda Repo Rate Home Loan Interest Rate Package Available Floating home loan interest Bank Of Baroda.
Housing Loan Interest Rate In Bank Of Baroda Housing loan interest in Bank Of Baroda is charged on daily reducing balance.
LTV (% on the market value of the property) 90%- for loan amount up-to Rs.30 Lakhs.80% – for loan amount from Rs.30 Lakhs – Rs.75 Lakhs.75% – for loan amount above Rs. 75 Lakhs.                              
FOIR (Fixed Obligation Against Income Ratio) Maximum FOIR of up-to 80%.
Bank Of Baroda Home Loan Charges Unified Bank Of Baroda home loan processing charges i.e. inclusive of processing charge, documentation charge, document verification/vetting charge, pre-sanction inspection charge, legal & technical cost, CIBIL cost, CERSAI cost as well as ITR verification charge.
Bank Of Baroda Home Loan Processing Time Minimum 30 – 45 working days.
Bank Of Baroda Home Loan Charges Processing fees of up-to 0.50% of the home loan amount + applicable GST. (Minimum Rs.8500/- & Maximum Rs.25,000/-)   (Read to know the complete list of charges on home loans – Click)
Bank Of Baroda Home Loan Prepayment Charges Nil on floating home loan interest of Bank Of Baroda.
Bank Of Baroda Loan Schemes Baroda Home Loan, Baroda Home Loan Advantage, Baroda Pre-Approved Home Loan, Bank Of Baroda Home Improvement Loan, Baroda Top UP Loan, Baroda Home Loan Takeover Scheme, ISHUP Schemes, CRGFS Schemes,  Bank Of Baroda PMAY Schemes & Baroda Ashray Reverse Mortgage Loan.

Bank Of Baroda Home Loan Calculator

Use Loanfasttrack’s Bank Of Baroda Home Loan EMI calculator to calculate your EMI outgo. Loanfasttrack’s Bank Of Baroda EMI calculator is a hassle free simple generic calculator which gives accurate estimates of the EMI for various loan amounts for various loan tenures. It also displays the total interest payable on the home loan amount. The interest payable varies with the loan tenures. The longer the loan tenure the higher is the interest payable to the bank & vice-a-versa.

The home loan EMI depends largely on the rate of interest, loan amount & loan tenure. Simply enter these 3 variables to get the desired EMI amount.

  • The higher the loan amount the higher will be the interest paid on housing loan and therefore higher will be the EMIs & vice-a-versa.
  • The longer the tenure the less will be the EMIs. & vise-a-versa.
  • The higher the interest rate of home loan in Bank Of Baroda the higher will be the EMIs & vice-a-versa.

EMI Amortization Chart 

The amortization schedule determines the percentage of EMI outgo towards the interest component versus principal component.

An amortization chart details the periodic loan repayments consisting of the principal & the interest amount till the loan is repaid. Each monthly payment remains the same & the payment is made up of parts that vary over time. The interest deduction in the EMI will be higher than the housing loan principal deduction during the initial period of tenure followed by lower interest deduction and higher home loan principal deduction towards the end of the tenure.

Home Loan Amortization Chart For Rs.60 Lakhs Housing Loan For 20 Years

(Assuming your loan is disbursed in the month of November @ 6.85% p.a.)

Yearly Chart

Year Total EMI Principal Interest Balance
2020 91,958 23,525 68,433 59,76,475
2021 5,51,748 1,46,918 4,04,830 58,29,556
2022 5,51,748 1,57,306 3,94,442 56,72,252
2023 5,51,748 1,68,425 3,83,323 55,03,828
2024 5,51,748 1,80,329 3,71,419 53,23,497
2025 5,51,748 1,93,077 3,58,671 51,30,419
2026 5,51,748 2,06,729 3,45,019 49,23,691
2027 5,51,748 2,21,342 3,30,406 47,02,349
2028 5,51,748 2,36,990 3,14,758 44,65,361
2029 5,51,748 2,53,739 2,98,009 42,11,619
2030 5,51,748 2,71,679 2,80,069 39,39,393
2031 5,51,748 2,90,886 2,60,862 36,49,054
2032 5,51,748 3,11,447 2,40,301 33,37,606
2033 5,51,748 3,33,465 2,18,283 30,04,141
2034 5,51,748 3,57,039 1,94,709 26,47,102
2035 5,51,748 3,82,278 1,69,470 22,64,823
2036 5,51,748 4,09,302 1,42,446 18,55,521
2037 5,51,748 4,38,236 1,13,512 14,17,284
2038 5,51,748 4,69,216 82,532 9,48,067
2039 5,51,748 5,02,387 49,361 4,45,681
2040 4,59,790 4,45,679 14,111 0

Bank Of Baroda Home Loan Schemes

1) Baroda Home Loan

  • Available for purchasing a plot (Bank Of Baroda plot purchase loan), for construction of a house on plot, purchasing a resale/ready to move/under-construction property and also for improving/extending the existing property. (Click to know the difference in home loan for resale & builder case)
  • Available for all salaried, self-employed, self-employed professionals, NRIs (Read About NRI Home Loans), PIOs & OCIs from 21 years to 70 years.
  • Available for home loan transfer to Bank Of Baroda. (Get complete knowledge on home loan balance transfer-CLICK)
  • Maximum loan amount ranges from Rs.5 Crore – Rs.10 Crore.
  • Longer repayment tenure of up-to 30 years.
  • BOB home loan interest rates range from 6.85% p.a. – 8.20% p.a.
  • Bank Of Baroda home loan top up interest rate is charged on daily reducing balance.
  • Bank Of Baroda home loan top up can be availed up-to maximum of 5 times during the BOB home loan tenure.
  • Bank Of Baroda home loan processing fee
    * Up-to Rs.50 Lakhs – 0.50% of the loan amount plus applicable GST subject to minimum of Rs.8,500/- and maximum of Rs.15,000/-
    * Above Rs.50 Lakhs – 0.25% of the loan amount plus applicable GST subject to minimum of Rs.8,500/- and maximum of Rs.25,000/-
    * Flat Rs.8,500/- for home loan transfer Bank Of Baroda.
  • FOIR (Fixed Obligation Against Income Ratio)percentage:
For Salaried Loan Borrowers (Bank Of Baroda home loan eligibility based on salary) For Self-Employed Loan Borrowers
Gross Monthly Income FOIR % Latest 2 Years Average Gross Annual Income FOIR %
< Rs.20,000/- 50% Up-to Rs.6 Lakhs 70%
Rs.20,000/- to Rs. 50,000/- 60% Above Rs.6 Lakhs 80%
Rs.50,000/- to Rs.2 Lakhs 65%    
Rs.2 Lakhs to Rs.5 Lakhs 70%    
Above Rs.5 Lakhs 75%    
  • Maximum funding of up-to 90% on the value of the property.
  • Bank Of Baroda home loan eligibility:
    * For salaried residents – minimum 1 year of employment.
    * For self-employed- minimum 2 years of business vintage.
    * For NRIs/PIOs/OCI –
    (a) minimum 2 years valid job contract / work permit OR must be staying abroad for at least 2 years.
    (b) Minimum gross annual income of Rs.5 Lakhs.
    (c) Should not be the citizens of the countries- Bangladesh / Pakistan / Sri Lanka / Afghanistan / China / Iran / Nepal & Bhutan.
  • A close relative (Spouse, Father, Mother (including Step Mother), Son (including Step Son), Son’s wife ,Daughter (Including Step Daughter), Daughter’s husband, Brother/sister (Including step brother/sister), Brother’s wife, sister (including step sister) of spouse, Sister’s husband, Brother (including step brother) of spouse) can be added to the home loan application as an co-applicant in order to enhance the BOB home loan eligibility.
  • Nil prepayment charges on home loan by Bank Of Baroda.
  • Free credit card with every home loan.
  • 0.25% concessions on car loans.

Compare BOB Home Loan With ICICI Bank Home Loan, HDFC Ltd. Home Loan, Canara Bank Home Loan, SBI Home Loan, Axis Bank Home Loan & Bank Of India Home Loan.

For the latest BOB Bank Home Loan, Bank Of Baroda Home Loan Transfer interest rates & processing fees offer call on 9321020476 or login to Loanfasttrack.

2) Baroda Home Loan Advantage

  • Available for all salaried, self-employed, self-employed professionals, NRIs, PIOs & OCIs from 21 years to 70 years for purchasing a residential plot, for purchase + construction of the plot, for construction of house, for purchasing a resale/ready to move/under-construction property and also for improving/extending the existing property. (Read: Everything You Must Know Before Purchasing A Land & Availing The Land Loans)
  • Also available for Bank Of Baroda-BOB home loan transfer.
  • Key features of Baroda Home Loan
    * Sanctioned home loans are linked to the borrower’s BOB saving account (zero rate of interest on this savings account).
    * The borrowers can deposit his savings in the linked SB account to avail maximum benefit of interest in the Home Loan account.
    * BOB home loan interest is calculated on daily reducing balance i.e. on the daily outstanding balance in the borrower’s BOB savings account.
    * EMI’s are auto recovered from the linked savings account.
  • Maximum loan amount is Rs.10 Crore.
  • Longer repayment tenure of up-to 30 years.
  • Bank Of Baroda home loan rate ranges from 6.85% p.a. – 8.45% p.a.
  • Processing fees of up-to 0.50% on the home loan amount.
  • Bank Of Baroda loan eligibility:
    * For salaried residents – minimum 1 year of employment.
    * For self-employed- minimum 2 years of business vintage.
    * For NRIs/PIOs/OCI –
    (a) minimum 2 years valid job contract / work permit OR must be staying abroad for at least 2 years.
    (b) Minimum gross annual income of Rs.5 Lakhs.
    (c) Should not be the citizens of the countries- Bangladesh / Pakistan / Sri Lanka / Afghanistan / China / Iran / Nepal & Bhutan.
  • FOIR (Fixed Obligation Against Income Ratio)percentage:
For Salaried Loan Borrowers (Bank Of Baroda home loan eligibility based on salary) For Self-Employed Loan Borrowers
Gross Monthly Income FOIR % Latest 2 Years Average Gross Annual Income FOIR %
< Rs.20,000/- 50% Up-to Rs.6 Lakhs 70%
Rs.20,000/- to Rs.50,000/- 60% Above Rs.6 Lakhs 80%
Rs.50,000/- to Rs.2 Lakhs 65%    
Rs.2 Lakhs to Rs.5 Lakhs 70%    
Above Rs.5 Lakhs 75%    
  • LTV up-to 90% on the market value of the property.
  • Nil prepayment charges on BOB housing loan.

Compare Baroda Home Loan Advantage with BOI’s Star Smart Home Loan with SBI’s Maxgain Product, Axis Bank Super Saver Home Loan & ICICI Bank Home Overdraft Product.

3) Baroda Pre-Approved Home Loan

  • Available for all salaried, self-employed, self-employed professionals, NRIs, PIOs & OCIs from 21 years to 70 years.
  • Bank Of Baroda pre-approved home loan provides in-principle approval for home loan which enables the loan applicant to get home loan sanctioned even before finalizing the property.
  • In-principle approval will be valid for 4 months from the date of its issue.
  • Maximum loan amount is Rs.10 Crore.
  • Maximum LTV of up-to 90% on the market value of the property.
  • Longer repayment tenure of up-to 30 years.
  • Bank Of Baroda housing loan interest rate ranges from 6.85% p.a. – 8.70% p.a.
  • Bank Of Baroda home loan processing charges range from 0.25% – 0.50% on the loan amount plus applicable GST. Upfront applicable fees is Rs.7500/- + GST, rest to be collected after the loan is sanctioned.
  • Nil prepayment charges.

4) Bank Of Baroda Home Improvement Loan

  • Available for all salaried, self-employed, self-employed professionals, NRIs, PIOs & OCIs from 21 years to 70 years for repairs and renovation of the home, for purchase of new furniture, fittings and furnishings, etc.
  • Maximum loan amount is Rs.10 Crore.
  • BOB home loan rates range from 6.85% p.a. – 8.20% p.a.
  • Longer repayment tenures of up-to 30 years.
  • BOB home loan processing fee
    * Up-to Rs.50 Lakhs – 0.50% of the loan amount plus applicable GST subject to minimum of Rs.8,500/- and maximum of Rs.15,000/-
    * Above Rs.50 Lakhs – 0.25% of the loan amount plus applicable GST subject to minimum of Rs.8,500/- and maximum of Rs.25,000/-
  • FOIR (Fixed Obligation Against Income Ratio)percentage:
For Salaried Loan Borrowers (Bank Of Baroda home loan eligibility based on salary) For Self-Employed Loan Borrowers
Gross Monthly Income FOIR % Latest 2 Years Average Gross Annual Income FOIR %
< Rs.20,000/- 50% Up-to Rs.6 Lakhs 70%
Rs.20,000/- to Rs.50,000/- 60% Above Rs.6 Lakhs 80%
Rs.50,000/- to Rs.2 Lakhs 65%    
Rs.2 Lakhs to Rs.5 Lakhs 70%    
Above Rs.5 Lakhs 75%    
  • LTV up-to 90% on the market value of the property.
  • Bank Of Baroda housing loan eligibility:
    * For salaried residents – minimum 1 year of employment.
    * For self-employed- minimum 2 years of business vintage.
    * For NRIs/PIOs/OCI –
    (a) minimum 2 years valid job contract / work permit OR must be staying abroad for at least 2 years.
    (b) Minimum gross annual income of Rs.5 Lakhs.
    (c) Should not be the citizens of the countries- Bangladesh / Pakistan / Sri Lanka / Afghanistan / China / Iran / Nepal & Bhutan.
  • Nil foreclosure charges.

Additional Read: Difference In Applying Home Loan With Public Bank & Private Bank

5) Baroda Top UP Loan

  • BOBO top up home loan is available for all existing home loan borrowers (salaried/self-employed/NRIs/PIOs) from 21 years to 70 years to meet their personal and professional requirement of funds.
  • BOB home loan top up amount – minimum Rs.1 Lakh and Maximum Rs.2 Crores.
  • Maximum funding of 90% of the market value of the property including the existing outstanding loan amount.
  • Top-up tenure will be the outstanding tenure of the existing home loan.
  • FOIR (Fixed Obligation Against Income Ratio)percentage:
For Salaried Loan Borrowers (Bank Of Baroda home loan eligibility based on salary) For Self-Employed Loan Borrowers
Gross Monthly Income FOIR % Latest 2 Years Average Gross Annual Income FOIR %
< Rs.20,000/- 50% Up-to Rs.6 Lakhs 70%
Rs.20,000/- to Rs. 50,000/- 60% Above Rs.6 Lakhs 80%
Rs.50,000/- to Rs.2 Lakhs 65%    
Rs.2 Lakhs to Rs.5 Lakhs 70%    
Above Rs.5 Lakhs 75%    

Compare BOB Top Up Loan With BOI Star Top Up Loan & ICICI Bank home loan top up.

6) Baroda Home Loan Takeover Scheme

Learn How To Apply For Home Loan With Bad CIBIL Score – By Loanfasttrack

* For Non-Individuals i.e. Firms/Companies

=> Mandatory to have an individual applicant in the home loan application.
=> Minimum 18 months EMI must have been paid.
=> The company must have been incorporated for a minimum 5 years.
=> Minimum 2 years business vintage required.
=> The company must be profitable for the minimum last 2 years.
=> Company’s net worth must be positive.
=> Good CIBIL score of the company.

Additional Read Home Loan Transfer For NRIsFOIR (Fixed Obligation Against Income Ratio)percentage

For Salaried Loan Borrowers (Bank Of Baroda home loan eligibility based on salary) For Self-Employed Loan Borrowers
Gross Monthly Income FOIR % Latest 2 Years Average Gross Annual Income FOIR %
< Rs.20,000/- 50% Up-to Rs.6 Lakhs 70%
Rs.20,000/- to Rs.50,000/- 60% Above Rs.6 Lakhs 80%
Rs.50,000/- to Rs.2 Lakhs 65%    
Rs.2 Lakhs to Rs.5 Lakhs 70%    
Above Rs.5 Lakhs 75%    
  • LTV up-to 90% on the market value of the property.
  • Free credit card with every home loan.
  • 0.25% concessions on car loans.

Also Read: Home loan transfer requirements, Benefits of home loan transfer.

For the latest BOB HL interest rates for home loan transfer in Bank Of Baroda & processing fees offer call on 9321020476 or login to Loanfasttrack.

7) Interest Subsidy Scheme For Housing The Urban Poor (ISHUP)

  • The ISHUP scheme is applicable for the urban LIG (Low Income Group having income of up-to Rs.5,000/- pm) & EWS (Economically Weaker Sections having income up-to Rs.10,000/- pm) borrowers only from 21 years to 70 years for the purchase/construction of a house or to extend the existing house.
  • 5% interest subsidy (Net Present Value) available for a maximum principal amount of Rs.1 Lakh.
  • Maximum loan tenure of up-to 20 years.
  • Home loan eligibility:
    => For salaried – 48 X (average gross salary for last 3 months)
    => For others – (Max) 4 X (average annual income of last 2 years)
  • Maximum funding of 80% on the market value of the property.
Category Maximum Loan Amount Maximum House Area
For EWS Rs.1 Lakh 25 Sq. Meter
For LIG Rs.1.6 Lakhs 40 Sq. Meter

8) Credit Risk Guarantee Funds Scheme For Low Income Housing (CRGFS)

  • Available only for the borrowers belonging to EWS & LIG categories in the urban area.
  • The scheme provides loans to the borrowers without any collateral/security or third party guarantor according to the Credit Risk Guarantee Fund Trust established by Indian Government’s Ministry of Housing and Urban Poverty Alleviation.
  • Under this scheme the Trust will provide credit risk guarantee to lending institutions (Banks) for the home loans they provide to the EWS & LIG category borrowers for acquisition and purchase of new/resale home, home construction and improvement.

Click to find out the merits and demerits for investing in resale & builder property.

  • Maximum house area is up-to 430 sq. ft. carpet i.e. 40 sq. meter.
  • Maximum loan amount is Rs.5 Lakhs.
  • For loans up-to Rs.2 Lakhs guarantee cover provided is 90% of the loan amount & for loans from Rs.2 Lakhs-Rs.5 Lakhs guarantee cover provided is 85%.
  • Tenure for guarantee cover is maximum up-to 25 years or loan termination date whichever is earlier.

9) (PMAY) Pradhan Mantri Awas Yojana Bank Of Baroda

  • Interest subsidy on housing loans of 3% – 6.50% for all eligible borrowers (salaried/self-employed/NRI/PIO/OCI) from 21 years to 70 years having yearly income from Rs.3 Lakhs to Rs.18 Lakhs & belonging to the EWS, LIG & MIG segment for either acquiring or purchasing a new house or to upgrade an existing kuccha or semi-pucca house.
  • Maximum subsidy amount of up-to Rs.2.67 lakhs.
  • Maximum income to avail the benefits of this scheme is maximum up-to Rs.18 Lakhs p.a.
  • Maximum carpet areas of the house under PMAY Bank Of Barodascheme is up-to 200 sq meter i.e. 2153 sq. ft.
  • Maximum loan amount is Rs.10 Crores while maximum loan amount eligible for the subsidy is up-to Rs.12 Lakhs..
  • Maximum loan tenure of up-to 30 years with subsidy up-to 20 years of the loan tenure.
  • Maximum funding of 90% on the market value of the property.
  • Bank Of Baroda housing loan interest starts from 6.85% p.a.
  • Bank Of Baroda home loan eligibility criteria:
    => For salaried residents – minimum 1 year of employment.
    => For self-employed- minimum 2 years of business vintage.
    => For NRIs/PIOs/OCI –
    (a) minimum 2 years valid job contract / work permit OR must be staying abroad for at least 2 years.
    (b) Minimum gross annual income of Rs.5 Lakhs.
    (c) Should not be the citizens of the countries- Bangladesh / Pakistan / Sri Lanka / Afghanistan / China / Iran / Nepal & Bhutan.
  • FOIR (Fixed Obligation Against Income Ratio)percentage:
For Salaried Loan Borrowers (Bank Of Baroda home loan eligibility based on salary) For Self-Employed Loan Borrowers
Gross Monthly Income FOIR % Latest 2 Years Average Gross Annual Income FOIR %
< Rs.20,000/- 50% Up-to Rs.6 Lakhs 70%
Rs.20,000/- to Rs. 50,000/- 60% Above Rs.6 Lakhs 80%
Rs.50,000/- to Rs.2 Lakhs 65%    
Rs.2 Lakhs to Rs.5 Lakhs 70%    
Above Rs.5 Lakhs 75%    
  • Processing fees up-to 0.50% of the loan amount plus applicable GST.(Minimum Rs.8,500/- & Maximum Rs.25,000/-)
  • Nil prepayment charges.

10) Mortgage Loan Bank Of Baroda

  • Available for all borrowers (salaried/self-employed/NRIs) to meet their immediate personal & professional fund requirement against the mortgage of residential/ commercial property and non-agricultural plots.(Click to learn more on mortgage loans)
  • Also available in the form of overdraft facility. (CLICK to know more on mortgage overdraft loans)
  • Minimum loan amount for mortgage loan is Rs.2 Lakhs & maximum loan amount is up-to Rs.10 Crores.
  • Maximum funding of 60% on the market value of the property.
  • Maximum loan tenure of up-to 10 years.  (Check out mortgage loan balance transfer @ lowest interest rates in India)
  • FOIR (Fixed Obligation Against Income Ratio)percentage:
Gross Monthly Income (GMI) FOIR %
Up-to Rs.75,000/- 50%
Rs.75,000/- to Rs.3 Lakhs 60%
Above Rs.3 Lakhs 70%

Compare Bank Of Baroda home loan against property with ICICI Bank’s Loan Against Property.

(Check out mortgage loan balance transfer @ lowest interest rates in India)

  • Unified processing charges.
For Term Loan For Overdraft Loan
1% on the loan amount plus applicable GST Up-to Rs.3 Crores 0.35% of the limit. (Maximum Rs.7,500/-)
(Minimum Rs.7,500/- & Maximum Rs.1,50,000/-) Above Rs.3 Crore 0.25% of the limit.

Click to know the documents required for applying for a mortgage loan for salaried, self employed – Pvt. Ltd Company, Partnership firm, Proprietorship Firm, mortgage loan balance transfer for salaried.

Click to find out the lowest interest rate loan against property with Loanfasttrack.

Additional Read: Difference Between Home Loan & Mortgage Loan

For the latest Bank Of Baroda LAP interest rate call on 9321020476 or login to Loanfasttrack.

11) Baroda Ashray Reverse Mortgage Loan

  • Ashray reverse mortgage loan is a mortgage loan for senior citizens of India above 60 years (spouse 55 years in case of joint loans) to meet their post retirement expenses, day-to-day expenses, medical expenses, etc. against the mortgage of their self-occupied and self-owned residential property (commercial property not allowed).
  • Maximum tenure is 15 years. (The tenure may further be extended till survival of the borrower subject to advance value of the property.)
  • Maximum loan amount inclusive of interest is up-to Rs.1 Crore (subject to value of the property).
  • Property insurance needs to be taken by the borrower regularly.
  • Reverse mortgage interest rate applicable is 9.20% p.a.
  • Processing fees 0.20% of the loan amount, maximum of Rs.10,000/-
  • Processing charges are waived 100% on all Bank of Baroda’s home loans and top-up loans.

Click to get complete information on reverse mortgage.

Bank Of Baroda Home Loan Tax Benefits 

Income tax benefit on home loan is available on both interest paid as well as on the principal amount repaid by the borrower.

Exemption on home loan, as per the Indian Income Tax Act, 1961:

  • The principal repaid can be claimed for home loan tax deduction under section 80C of the Income Tax Act up-to Rs.1.5 Lakhs p.a.
  • Interest on housing loan deduction –
    => The interest paid can be claimed for income tax exemption on home loan as deduction under section 24 of Income Tax Act up-to Rs.2 Lakhs p.a. for the property ready to move/self-owned by the borrower.
    => Home loan interest exemption of Rs.30,000 if construction is not completed within five years.
    => For home loans up-to Rs.35 Lakhs & cost of the properties up-to Rs.50 Lakhs, an additional housing loan tax exemption on interest of up-to Rs.50,000 is applicable on the interest paid for first time home buyers.
    => Housing loan interest exemption for rented properties-

Entire interest amount can be claimed in a year for the property which is rented out by the borrower subject to the maximum exemption limit of Rs.2 Lakhs for the interest paid.

Bank Of Baroda Home Loan Documents List

SR. No. Documents Required For Salaried For Self-Employed
1 KYC Pan CardAadhar CardLatest Passport size photographOffice proof Residence Proof Pan CardAadhar CardLatest Passport size photographOffice proof Residence Proof
2 Income Documents 4 months Salary Slips6 months Bank Account Statement2 years From 16 3 years ITR with Saral Copy, Balance Sheet, P&L Account, Capital Account – CA certified12 months bank account statements of all bank accounts savings + current account
3 Property Documents Prior Chain of AgreementOC/CC + approved plansIndex 2Share CertificateSociety Registration CopyProperty Tax Receipt Prior Chain of AgreementOC/CC + approved plansIndex 2Share CertificateSociety Registration CopyProperty Tax Receipt
4 Additional Documents for home loan transfer LOD Outstanding Balance Letter18 months repayment track record LOD Outstanding Balance Letter18 months repayment track record
5 Other Documents Duly signed Bank Of Baroda home loan application formProcessing fees cheque Duly signed BOB home loan application form Processing fees cheque                     
6 For NRI Home Loan Please refer to the link – “https://www.loanfasttrack.com/blog/blog/finance/nri-list-of-documents-for-applying-home-loan/”.
7 Refer to the links for a detailed Bank Of Baroda home loan checklist. Documents required for resale case   Documents required for resale case:  Proprietorship firmPrivate Ltd. CompanyPartnership Firm
    Documents required for builder case Documents required for builder case: Proprietorship firmPrivate Ltd. CompanyPartnership Firm
    Documents required for home loan balance transfer Documents required for home loan balance transfer for: Proprietorship FirmPrivate Limited CompanyPartnership Firm

Click to know housing loan interest rates of different banks and to know which bank has the lowest home loan interest rate.

Similar Banks Offering Home Loans

ICICI Bank HDFC Ltd. Canara Bank SBI Bank Axis Bank Bank Of India
Click For The Latest Bank Of Baroda Home Loan Offers

Loanfasttrack is a Mumbai based loan provider company since 2015 offering loan services in Mumbai on– housing loan in Mumbai, mortgage loan in Mumbai, personal loan in Mumbai, business Loan in Mumbai, unsecured business loans,home loan transfer, top-up loans, car loans and loan transfers. Loanfasttrack is a direct sales associate with leading banks namely, ICICI Bank, HDFC Ltd, Canara Bank, Citi Bank, Piramal Housing Finance, etc.

Visit www.loanfasttrack.com.

Seek expert advice on 9321020476.

You can also email on info@loanfasttrack.com.

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Additional Read:

SBI Home Loan

by admin

Home Loans

State Bank Of India is the largest mortgage lender in India providing attractive home loan interest rates. Current SBI home loan interest rates start from 6.95%p.a. (concessional rates of SBI home loan for women) with flexible repayment options up-to 30 years for SBI home loan tenure. Processing fee for home loan in SBI is up-to 0.40% of the loan amount (Min.Rs.10,000 & Max.Rs.30,000) plus applicable GST.

Benefits Of SBI Home Loan

  • Low home loan rates in SBI. SBI bank home loan interest rate starts from 6.95% p.a.
  • Interest concession of 0.05% p.a. on SBI home loan interest rate for women.
  • Interest calculation on a daily reducing balance.
  • Home loan also available as an overdraft with SBI overdraft home loan.
  • Low processing charges. SBI home loan processing fee ranges in 0.20%-0.40% of the loan amount plus applicable GST subject to a minimum of Rs 10000/- and maximum of Rs 30000/- plus GST.
  • No prepayment penalties.
  • PMAY credit linked subsidy schemes available with subsidy up-to Rs.2.67 lakhs.
  • SBI Pre-approved home loan facility available.

SBI Home Loan Interest Rates 2020

SBI Home Loan Schemes Rate Of Interest For Salaried Rate Of Interest For Self-Employed
SBI Regular Home Loan 6.95% -7.35% p.a. 7.10%-7.50% p.a.
SBI Shaurya Home Loan 6.95% p.a. onwards  –
SBI Maxgain Home Loan 7.30%-7.70% p.a. 7.45%-7.85%
SBI Privilege Home Loan 6.95% p.a. onwards  –
SBI Flexipay Home Loan 8.15%-8.65% p.a.  –
SBI Tribal Plus Home Loan 7.05% p.a. onwards  –
SBI (Commercial Real Estate) CRE Home Loan 7.45% p.a. onwards  –
SBI Realty Home Loan 7.65%-7.90% p.a.  –
SBI Home Top Up Loan (Term Loan) 7.50%-9.55% p.a. 7.65%-9.70% p.a.
SBI Home Top Up Loan (Overdraft) 8.40%-8.65% p.a. 8.55%-8.80% p.a.
SBI Insta Home Top Up Loan (For Rs.1 Lakh – Rs.5 Lakhs) 8.20% p.a. 8.20% p.a.
SBI Smart Home Top Up Loan (Term Loan) 8.05% p.a. 8.55% p.a.
SBI Smart Home Top Up Loan (Overdraft) 8.55% p.a. 9.05% p.a.
SBI Bridge Home Loan 9.50% p.a. – for first year 10.50% p.a. – for second year.  –
SBI Corporate Home Loan 9.20% p.a. – 10.95% p.a. (Loan applicant is a corporate entity).
SBI EMD Earnest Money Deposit 10.45% p.a.  –
SBI Loan Against Property (If self-occupied) 8.80%-9.30% p.a. 8.80%-9.30% p.a.
SBI Loan Against Property (If not self-occupied) 8.90%-9.65% p.a. 8.90%-9.65% p.a.
SBI Reverse Mortgage Loan 9.05% p.a. – for public 8.05% p.a. – for SBI pensioners  –

SBI Home Loan Details

SBI provides home loans for the purchase of property (residential/commercial/land), repairs, renovate or redecorate, extension or improvement and construction of the property.

SBI Home Loan Eligibility Criteria

Eligible Profile Salaried, Self-Employed Professionals, Self-Employed Non-Professionals, NRIs, PIOs, Corporate Entities
Age Criteria Minimum 18 years & maximum 70 years.
Loan Amount SBI home loan maximum amount is based on the eligibility.
SBI Loan Repayment Options – Home Loan Tenure SBI home loan maximum tenure is 30 years. (Minimum tenure for home loan in SBI is 5 years)
SBI Home Loan Types SBI Home Loan For Under Construction Property, SBI Property Loan, SBI Plot Loan/SBI Land Loan, SBI Top Up Loan, SBI Home Loan Transfer, SBI Renovation Loan/Home Renovation Loan SBI, SBI Home Extension Loan, SBI NRI Home Loan, SBI Loan Against Property, Reverse Mortgage Loan SBI, SBI Construction Loan/Home Construction Loan SBI, Commercial Property Loan SBI, Home Improvement Loan SBI.
SBI Home Loan Rate Today SBI housing loan interest rate starts from 6.95% p.a.
EBR 6.65% p.a.
SBI Home Loan EMI Per Lakh Starts from Rs.662/- (Rs.662/- is the per lakh EMI calculated @ of 6.95% p.a. for 30 years)
Rate Packages Available Floating & Fixed rate SBI housing loan rate.
SBI Home Loan Approval Process Time 20-30 working days.
SBI Housing Loan Processing Charges SBI housing loan processing fee (inclusive of legal & technical charges)- ranges in 0.20%-0.40% of the loan amount plus applicable GST subject to a minimum of Rs 10000/- and maximum of Rs 30000/- plus GST. Stamp duty charges for SBI home loan – 0.20% of the loan amount. (Read to know the complete list of charges on home loans- CLICK)
Pre Closure Charges For Home Loan SBI Nil for floating interest rates.

SBI Home Loan Schemes

SBI offers customized schemes for the customers to suit their varied home loan requirements. Mentioned below are its various home loan products with its salient features.

1) SBI Regular Home Loan

  • Available for all Indian residents from 18 years to 70 years for purchase (resale/builder under-construction or ready to move)/construction/extensions/repairs & renovations of the property. (Click to know the difference in home loan for resale & builder case)
  • SBI current home loan interest rates available from 7% p.a. onwards. Special discounted rates for women borrowers. 0.05% concession on interest rates for women.
  • SBI home loan offers longer repayment tenure up-to 30 years.
  • Zero prepayment charges.
  • SBI home loan processing fees range from 0.20%-0.40% of the loan amount plus applicable GST subject to minimum Rs 10000/- & maximum Rs 30000/-. (including legal and technical cost)
  • Home loan available in the form of overdraft.
  • Tax benefits under section 24 and 80(C).

Compare SBI Home Loan With ICICI Bank Home Loan, HDFC Ltd. Home Loan & Canara Bank Home Loan.

2) SBI Pre-Approved Home Loan

  • SBI pre-approved loan (PAL) is available for all Indian residents from 18 years to 70 years.
  • Pre-approved home loan from SBI enables the applicant to get home loan sanctioned even before finalizing the property.
  • SBI pre-approved loan interest rate starts from 6.95% p.a.
  • SBI PAL eligibility is assessed only on the basis of the income details of the applicant.
  • Home loan available in the form of overdraft.
  • Other benefits of PAL are similar to regular home loans.
  • Non-refundable processing fees (0.20%-0.40% of home loan amount plus applicable GST) will be collected at the time of sanction.

3) SBI Balance Transfer Of Home Loan

  • Available for all Indian residents from 18 years to 70 years.
  • Low housing loan rate of interest in SBI for balance transfer starting from 6.95%p.a. (Compare home loan transfer details of SBI with other leading banks)
  • SBI home loan take over interest rates are charged on daily reducing balance.
  • Home loan available in the form of overdraft.
  • No hidden costs- Nil pre & part payment charges.
  • Extended loan tenures up-to 30 years.
  • SBI home loan transfer processing fees inclusive of legal & technical – 0.20%-0.40% of the loan amount plus applicable GST (Min Rs 10000/- & Max Rs 30000/-).

Also Read: Home loan transfer requirements, Benefits of home loan transfer.

For the latest SBI home loan transfer interest rates & processing fees offer call on 9321020476.

4) SBI NRI Home Loan

  • Available for NRIs & PIOs (Person Of Indian Origin) applicants from 18 years to 60 years.
  • Extended loan tenure up-to 30 years.
  • SBI bank NRI home loan available in the form of overdraft.
  • Low SBI home loan ROI (Rate Of Interest) for NRIs – 6.95% onwards.
  • Processing cost including legal and technical charges – 0.20%-0.40% of home loan amount plus applicable GST. (Min Rs 10000/- & Max Rs 30000/-).

Click to get documents required for SBI home loan for NRI.

Learn more on NRI home loans & NRI home loan transfer.

5) SBI Flexipay Home Loan

  • SBI flexi home loan available only for salaried Indian residents from 21 years to 45 years.
  • 20% higher SBI housing loan eligibility with Flexi pay home loan.
  • The applicant can pay only the interest during the pre-EMI period followed by step-up EMIs in the subsequent years.
  • SBI flexi pay home loan interest rate varies from applicant to applicant depending on their credit scores and LTV (Loan To Value) percentage.
  • Maximum loan amount availed is up-to 7crs.
  • Processing cost including legal and technical charges – 0.20%-0.40% of home loan amount plus applicable GST. (Min Rs 10000/- & Max Rs 30000/-).

6) SBI Privilege Home Loan

  • Designed specially to provide home loans to Central & State Government employees (including Public Sector Banks, Central Govt.’s Public Sector Units & Pensioners) from 18 years to 75 years.
  • The loan can be serviced post retirement period. Post retirement EMIs capped @ 50% of the existing per month income.
  • Zero processing fees (excluding legal & technical cost) & Zero foreclosure charges.
  • 30 years repayment tenure.
  • Uniform interest rates of 6.95% p.a. onwards for all women, men/others with check-off facility & 7% p.a. onwards for all without a check off facility.

(Check-off facility meaning= the home loan EMIs are directly deducted from the employee’s salary and remitting the same to the lender’s bank)

7) SBI Shaurya Home Loan

  • Provided only for the defense employees i.e. for Indian army and defense personnel from 18 years to 75 years.
  • Zero processing fees (excluding legal & technical cost) & Zero foreclosure charges.
  • Longer repayment tenure of 30 years.
  • SBI shaurya home loan interest rates are charged on daily reducing balances.
  • Uniform interest rates of 6.95% p.a. onwards for all women, men/others with check-off facility & 7% p.a. onwards for all without a check-off facility.

8) SBI Realty Home Loan

  • Available for Indian residents from 18 years to 65 years for the purchase of the plot to construct a house. (Construction to be completed within 5 years from the sanction of the SBI plot plus construction loan).
  • Maximum loan amount availed for SBI plot and construction loan is up-to Rs.15 crores.
  • Maximum tenure available is 10 years.
  • The applicant can also avail another SBI home loan for construction of house on plot financed under SBI Realty as per the SBI land purchase scheme.
  • SBI Realty Loan interest rates range from 7.70% p.a. – 7.90% p.a. – daily reducing balance. (0.05% concession on rates available for women applicants.)
  • Processing cost including legal and technical charges – 0.20%-0.40% of home loan amount plus applicable GST. (Min Rs 10000/- & Max Rs 30000/-).

Also Read: Everything You Must Know Before Purchasing A Land & Availing The Land Loans

9) SBI Home Top Up Loan

  • Available for resident Indians and NRIs from 18 years to 70 years.
  • Top up loan on home loan SBI can be availed in the form of overdraft.
  • SBI home loan top up interest rate range in 7.50% p.a. – 9.55% p.a. for term loan and 8.40% p.a. – 8.65% p.a. for overdraft.
  • Interest charges on daily reducing balances for SBI top up loan interest rate.
  • SBI home loan top up eligibility is subject to the applicant’s income and the property’s market value (Maximum LTV is subject to 80%).
  • Longer repayment tenure up-to 30 years.
  • Processing cost including legal and technical charges – 0.20%-0.40% of home loan amount plus applicable GST. (Min Rs 10000/- & Max Rs 30000/-).

Compare SBI top up loan with ICICI Bank home loan top up.

10) SBI Smart Home Top Up Loan

  • Available for resident Indians and NRIs from 18 years to 70 years.
  • The applicant needs to visit the nearest SBI/RACPC (Retail Assets Central Processing Centre) to avail the loan.
  • The applicant should not have any other active home top-up or insta home top-up loans for availing SBI smart top up loan.
  • Minimum CIBIL score required is 550 and above with satisfactory repayment track record of 1 year or more. (Click to understand the significance of CIBIL in home loan)
  • Loan tenure available is up-to 20 years.
  • Minimum loan amount is 5 lakhs, also available in the form of overdraft facility.
  • No documents required.
  • Interest rates for term loans are 8.05% p.a. & 8.55% p.a. For overdraft loans are 8.55% p.a. & 9.05% p.a. respectively for salaried and self-employed applicants.
  • Flat processing fees of Rs.2000/- plus applicable GST.
  • No need to pay the processing fees upfront. The charges will be deducted from the loan amount itself.
  • Nil prepayment charges.

11) SBI YONO Insta Home Top Up Loan

  • It is the digital home loan that is applied through SBI’s YONO mobile app.
  • No documentation required.
  • Applicable only for its existing customers with satisfactory track record.
  • Only those pre-selected customers selected on the basis of the track history, outstanding tenure, etc. can apply for this product 24*7.
  • Instant disbursals through SBI YONO App. Loan available in the form of overdraft.
  • Loan amount that can be availed is minimum Rs.1 Lakh and maximum Rs.5 Lakhs.
  • Interest rate applicable for all is 8.20% p.a.
  • Flat processing fees of Rs.2000/- plus applicable GST adjusted through the top up loan disbursement amount.

12) SBI Bridge Home Loan

  • Bridges the gap of fund shortage between the sale of the existing home and the purchase of a new home.
  • Available for resident Indians from 18 years to 70 years.
  •  Minimum loan amount with SBI bridge loan is 2 years while maximum is 2 crores.
  • Loan tenure is up-to 2years.
  • Interest charged on daily reducing balances. 9.50% p.a for the first year & 10.50% p.a. for the second year.
  • Processing cost is 0.35% of the loan amount plus applicable GST, subject to minimum of Rs.5000/-.

13) SBI Corporate Home Loan

  • Available for corporate entities i.e. public sector and private limited companies including its subsidiary/SPV (Special Purpose Vehicle/Special Purpose Entity) units to purchase/construct residences (in the name of the companies) for the use by their employees/directors/promoters.
  • Also available for SBI home loan balance transfer in the name of the company from other lender Banks/HFCs/NBFCs
  • Preconditions for the corporate entities for availing the home loan:
    – Should be SBI’s existing borrower or debt free company.
    – Should have 3 years of business vintage.
    – Should have uninterrupted flow of income/net profits for the last 3 years.
    – No restructuring of the company’s loan accounts for the last 3 years.
  • In case of a subsidiary company:
    a.) The parent company should agree to be the guarantor in the home loan.
    b.) The parent company fulfills its eligibility norms &
    c.) The parent company provides undertaking to service the subsidiary company’s home loan if the subsidiary has insufficient t cash flows to repay the home loan EMIs.
  • Interest rates range from 9.20% p.a. – 10.95% p.a.
  • Processing cost is 0.50% of the loan amount plus applicable GST, subject to minimum of Rs.50,000/- & maximum of Rs.10 Lakhs.

14) SBI Home Loan To Non-Salaried Differential Offerings

  • Available for non-salaried resident Indians i.e. the self-employed Indian residents with minimum age of 18 years for the purchasing/constructing a house, for repairing & renovating the existing house and also for the housing loan takeover from other lenders.
  • Minimum loan amount that can be availed is Rs.50,000/- subject to the maximum loan amount of Rs.50 Crores.
  • Longer repayment tenures available up-to 30 years.
  • Interest rates applicable are 7.10% p.a. onwards on daily reducing balances.
  • Processing cost including legal and technical charges – 0.20%-0.40% of home loan amount plus applicable GST. (Min Rs 10000/- & Max Rs 30000/-).
  • Preconditions for availing the home loan for the applicant (proprietor/partner/director):
  • Should have a minimum business vintage of 3 years.
  • Must be profit making for the last 2 years.
  • Existing Credit Facilities, if any, should be Regular and Standard.
  • In case of joint ownership of the residential property in the name of proprietor and the proprietorship firm the firm must be a debt free firm or an existing borrower of SBI.

15) SBI Tribal Plus

  • Tribal plus home loan is available for all resident Indians residing in the hilly/tribal areas from 21 years to 60 years for the purchase/construction of a new house without mortgaging the land, for purchasing of the resale house not more than 10 years old, for repair & renovation of the house and also for the home loan takeover from other lender Banks/HFCs/NBFCs.
  • Repayment tenures are up-to 15 years.
  • Maximum loan amount that can be availed is Rs.10 Lakhs.
  • Nil prepayment charges.
  • No need to mortgage the land, third party guarantor are allowed.
  • Interest rates start from 7.10% p.a. on daily reducing balances. 0.05% rate concession for women borrowers.
  • Processing cost including legal and technical charges – 0.20%-0.40% of home loan amount plus applicable GST. (Min Rs 10000/- & Max Rs 30000/-).

16) SBI Earnest Money Deposit (EMD)

  • SBI Earnest Money Deposit scheme is available for all resident Indians with minimum age of 21 years.
  • The loan is availed only to pay the booking amount for the residences/plots sold by the urban development authorities, housing boards and other government entities.
  • EMD are short term loans having repayment tenure of not more than 1 year.
  • No minimum income criteria to avail the maximum loan amount of Rs.15 Lakhs.
  • Interest rates applicable for all is 10.45% p.a.
  • Applicable processing fee is 0.50% of the home loan amount plus applicable GST subject to a minimum of Rs.1000/-.
  • No prepayment charges.

17) SBI CRE (Commercial Real Estate) Home Loan

  • SBI CRE home loan is designed especially for all resident Indians from 18 years to 70 years who already own 2 or more residences and want to buy more.
  • Maximum number of home loans that can be applied through CRE is restricted to 3 including the existing and the proposed one & excluding the closed home loans.
  • Longer repayment up-to 30 years.
  • Home loan available in the form of overdraft facility.
  • Nil prepayment charges.
  • SBI CRE home loan interest rates are charged on daily reducing balances ranging from 7.50% p.a. – 7.85% p.a for salaried &7.65% p.a. – 8% p.a. for self-employed. 0.05% rate concession available for women borrowers.
  • Applicable processing fee is 0.35% of the home loan amount plus applicable GST subject to a minimum of Rs.5000/-.

18) SBI Maxgain Scheme

  • It is a home saver loan product which provides prepayment benefits without compromising the liquidity.
  • Available for the applicants from 18 years to 70 years for the purchase, construction, extension, repairs & renovation of the residential property.
  • The loan is sanctioned in the form of overdraft. Park the access funds in the account and pay less interest.
  • SBI maxgain home loan benefits the applicants by savings on their interest component. SBI maxgain interest rate is charged on the outstanding principal amount i.e. the principal loan amount – (minus) the excess funds parked.
  • SBI maxgain home loan interest rate charged for salaried range in 7.35% p.a. – 7.70% p.a. & SBI maxgain home loan rate for self-employed range in 7.50% pa. – 7.85% p.a. 0.05% concession on SBI maxgain rate of interest for women borrowers.
  • Provides cheque book, debit card and online banking facility to the applicant who wishes to manage his saving’s account while dealing with the home loan.
  • SBI maxgain terms and conditions/ Eligibility
  • Maxgain loan taken for construction – construction should be started within 3 years of the loan taken.
    – Maxgain loan taken on under-construction property – surplus funds deposited before the full disbursement of loan cannot be withdrawn till complete disbursement of loan. However, the interest will still be saved and added to the account balance, but will be withdrawn only after taking the possession of the property. 
    – Minimum loan amount that can be applied is Rs.20 Lakhs.
    – Longer repayment up-to 35 years available.
    – Processing cost including legal and technical charges – 0.20%-0.40% of home loan amount plus applicable GST. (Min Rs 10000/- & Max Rs 30000/-).
  • SBI maxgain disadvantage – No tax deductions under section 80C for the money parked in the maxgain account and section 24 for the unpaid interest amount i.e. the interest saved.
  • Use SBI maxgain calculator to calculate your interest component.

19) SBI Green Home Loan

  • SBI’s greenhouse loan is available for all applicants from 18 years to 70 years who wish to buy ecofriendly house i.e. environmentally friendly house.
  • The green house concept will help in conservation of natural resources such as wood, water and energy, reduce the carbon emissions, etc. and cause less damage to the environment.
  • Green housing loans will be sanctioned for projects rated by the Indian Green Building Council (IGBC). The projects which have eco-friendly amenities such as rainwater harvesting, water recycling and solar power systems, etc.
  • Various concessions for purchasing an eco-house from green home builders which includes:
  • Reduced OCR margins – Less own contribution required.
  • Lower interest rate – Concession on the housing loan interest rates for all loan tenures.
  • Processing fee offer – less processing fees or zero processing fees.

20) Pre-EMI Interest By Builders Scheme

  • Builders registered under the bank’s Builder Tie Up arrangement agree to pay the buyer’s pre-EMIs full or a part of pre-EMIs at a fixed interest rate.
  • The applicant pays the EMIs from the stipulated repayment start date as per the terms of sanction.
  • The stipulated repayment starts dates differ for each builder project and accordingly, the specific moratorium periods are permitted by the bank for different projects.

Click to read Is pre-EMI is better than full EMI. Also find out the merits and demerits for investing in resale & builder property.

21)  SBI Loan Against Property (P-Lap) / SBI Mortgage Loan

  • SBI lap loan is available for all resident Indians from 18 years to 70 years against the pledge of the property to fulfill the personal funds requirement for child education, marriage, medical expenses, etc.
  • House mortgage loan SBI is available only for personal purposes and not for business and speculative purposes. Compare SBI mortgage loan with ICICI Bank’s Mortgage loan.
  • SBI loan against property eligibility:
    * Maximum loan tenure of up-to 15 years.
    * Minimum loan amount is Rs.10 Lakhs & maximum is Rs.7.5 Crores (Subject to the location of the property).
    * Maximum LTV is 65% of the value of the property.
    * Minimum net monthly income of the applicant required is Rs.25,000/- i.e. Rs.3 Lakhs p.a.
    * No prepayment penalty.
    * SBI mortgage loan interest rate is charged on daily reducing balance.
    * SBI loan against property interest rate starts from 8.80% p.a. Onwards. (Check out mortgage loan balance transfer @ lowest interest rates in India)
    * Processing fees of 1% of the loan amount plus applicable GST, subject to maximum of Rs.50,000/-.

Click to know the documents required for applying for a mortgage loan for salaried, self-employed – Pvt. Ltd Company, Partnership firm, Proprietorship Firm, mortgage loan balance transfer for salaried.

Click to find out the Best Banks For Mortgage Loan In India and to know more on mortgage overdraft.

For the latest SBI lap loan interest rate call on 9321020476.

22) SBI Reverse Mortgage Loan

  • Reverse mortgage scheme of SBI provides mortgage loans for senior citizens of India above 60 years (spouse 58 years in case of joint loans) to meet their livelihood needs such as day-to-day expenses, medical expenses, etc. against their self-occupied and self-owned residential property.
  • The reverse mortgage loan in SBI is not repaid during the lifetime of the applicant. The entire loan balance along with the interest becomes payable only when the borrower sells the house or moves away permanently or when the last surviving borrower dies OR when he willingly pre-closes the loan.
  • No prepayment penalty.
  • Loan tenure for reverse mortgage loan SBI is 10-15 years depending on the age of the applicant.
  • Minimum loan amount is Rs.3 Lakhs and maximum is Rs 1 Crore.
  • 8.05% p.a. reverse mortgage interest rates for SBI pensioners.
  • 9.05% p.a. reverse mortgage loan interest rate for the public.
  • Applicable processing fee is 0.50% of the home loan amount plus applicable GST. (Minimum Rs.2000/- & Maximum Rs.20,000/-).

Click to get complete information on reverse mortgage.

List Of Documents Required For Home loan SBI

1) KYC – Pan Card, Aadhar Card, Latest Passport size photograph, Office proof & Residence Proof.

2) Income Documents required for housing loan:

  1. Documents required for home loan for salaried person – 4 months Salary Slips, 6 months Bank Account Statement, 2 years From 16.
  2. Documents required for home loan for self-employed – 3 years ITR with Saral Copy, Balance Sheet, P&L Account, Capital Account – CA certified, 12 months bank account statements of all bank accounts savings + current account.

3) Property documents required for home loan SBI:

  1. Prior Chain of Agreement
  2. OC/CC + approved plans
  3. Index 2
  4. Share Certificate
  5. Society Registration Copy
  6. Property Tax Receipt.

4) Additional documents required for home loan transfer

  1. LOD
  2. Outstanding Balance Letter
  3. 18 months repayment track record.

5) Other documents needed for SBI home loan

  1. Duly signed SBI home loan application form.
  2. Processing fees cheque.

6) Click for documents required for NRI home loan

7) Please refer to the links for detailed documents for home loan SBI.

  1. SBI home loan documents required Resale Case for salaried, for self employed for Proprietorship firm, Private Ltd. Company, Partnership Firm. 
  2. Documents required for home loan from builder for salaried, for self employed Proprietorship firm, Private Ltd. Company, Partnership Firm.  
  3. SBI housing loan required documents for home loan balance transfer for salaried, self employed – Proprietorship Firm, Private Limited Company, Partnership Firm.

Click to know housing loan interest rates of different banks and to know which bank has the lowest home loan interest rate.

For the latest SBI home loan interest rates & SBI home loan balance transfer interest rates call on 9321020476 or login to Loanfasttrack.

 Loanfasttrack is a Mumbai based loan provider company since 2015 offering loan services in Mumbai on– housing loan in Mumbai, mortgage loan in Mumbai, personal loan in Mumbai, business Loan in Mumbai, unsecured business loans,home loan transfer, top-up loans, car loans and loan transfers. Loanfasttrack is a direct sales associate with leading banks namely, ICICI Bank, HDFC Ltd, Canara Bank, Citi Bank, Piramal Housing Finance, etc.

Visit www.loanfasttrack.com.

Seek expert advice on 9321020476.

You can also email on info@loanfasttrack.com.

Loanfasttrack’s specialized services includes providing:

Additional Read:

Loan Against Property At Lowest Interest Rate With Loanfasttrack

by admin
Loan Against Property — Loanfasttrack

(Remember Janakidevi, who took our services to meet her home loan balance transfer and top-up requirement? One of our esteemed customers, satisfied with our prompt services once again approached us at Loanfasttrack, this time for her loan against property requirement popularly referred as mortgage loan in India.

This time also all her queries, doubts and questions relating to loan against property interest rates, processing time, tenure, loan against property eligibility, additional top-up, loan against property calculator, required documents for loan against property, etc. were cleared by our representatives at Loanfasttrack.) 

Janakidevi’s conversations with our representatives was as follows:

Questionnaire On Loan Against Property

Q. What is loan against property?

Ans:- It is a type of secured loans against your property taken to fulfill your professional and personal needs. People misinterpret it with home loan, but in banking language loan against property means mortgage loans.

Q. Where can I use the loan funds for?

Ans:- Loan against property end use should be specific. The loan amount cannot be used for trading and speculative purposes, investments in stocks and mutual, money lending business, investing in illegal plots or property, for purchasing a chawl property, etc. However the loan funds can be used for home repairs and renovations, business expansions, children education or marriage, medical emergencies, etc. Moreover you can also use funds availed from loan against property to buy another property.

Q. How much loan can I get against my property?

Ans:- The maximum loan amount on your property is subject to the market value of your property. As per the LTV (loan to value) norms of the banks maximum 60%-70% of the market value of the residential and commercial property and 50%-55% of industrial property will be your loan eligibility against property.

Q. How is loan against property eligibility calculated?

Ans:- Your eligibility for loan against property is determined as follows:

(Lower of 1 & 2)

1) Income Eligibility (40%-60% of the monthly net income or net profit of salaried and self-employed respectively).

2) LTV Calculation (50% – 70% on the market value of the property depending upon the type of the property).

Q. What do you mean by loan against property eligibility criteria?

Ans:- The bank’s eligibility criteria’s such as your age, tenure, loan amount, profile, employment details, income flow, property details, etc. are the criteria that makes you eligible or non-eligible for the loan amount. Say for instance, a borrower’s age of 70 years makes him non-eligible for the loan or a borrower employed with an industry tenure following under the bank’s negative list of industries makes him non-eligible for the loan.

Q. What is the minimum loan amount that I can apply?

Ans:- Loan against property minimum amount is 5 lakhs. But loan amount for applying mortgage loan through Loanfasttrack starts from Rs.15 lakhs.

Q. What will be the loan turnaround time?

Ans:- 15-20 working days is theloan against property processing time.

Q. What will be my loan against property tenure?

Ans:- Loan against property maximum tenure available is for 15 years and minimum tenure is for 5 years (subject to the age of the borrower). Maximum tenure of 20 years is also available with some banks, but will be case specific, available for self-employed professionals such as doctors, engineers, lawyers, etc. and for salaried will be case specific. 

Q. Is a loan against property for 30 years available?

Ans:- No.

Q. Can loan against property be converted to home loan?

Ans:- No.

Q. What is the difference- loan against property vs home loan?

Ans:- Please refer to the link below “https://www.loanfasttrack.com/blog/blog/finance/difference-between-home-loan-and-loan-against-property/” .

Q. What is the difference- loan against property vs personal loan?

Ans:- For immediate fund requirement you can either apply for loan against property or personal loan. Both will fulfill your fund emergencies, but both differ with respect to interest rates, processing fees, processing time, closure conditions, etc. The difference between the both is highlighted below in a tabular format.

  Loan Against Property Personal Loan
Type Of Loan Secured loan against property. Unsecured loan.
Rate Of Interest 8.75% – 11.50% p.a. 11%-18% p.a.
Tenure Upto 20 years. Upto 7 years.
  Upto 1% on the loan amount plus applicable GST. Usually high upto 2.5% on the loan amount plus applicable GST.
Processing Time 15-20 working days. 5-7 working days.
Foreclosure Charges Upto 2% on outstanding loan amount. Upto 5% on outstanding loan amount.
Loan Eligibility Subject to income and property valuation. Subject to only income.
Overdraft Facility OD facility available. No OD facility.
Documents Required KYC, financial documents & property papers. Only KYC & financial documents.
Tax Benefits Loan against property tax exemption is applicable only on interest paid provided required documents are maintained to justify the end-use. No exemptions for principal paid. No tax benefits.
Apply For Loan Against Property

Q. What is a loan against property overdraft facility?

Ans:- Loan against property overdraft is a facility provided to you to get a mortgage loan in the form of an overdraft and pay interest only on the utilized loan amount. Interest rates on mortgage OD will be 1%-2% higher in comparison to the interest rates on regular mortgage loan.

Get complete information on Mortgage OD – refer our blog “Know All About Mortgage Overdraft”.

Apply For Loan Against Property OD.

Q. What is the ongoing loan against property rate of interest?

Ans:- Loan against property minimum interest rates starts from 8.75%p.a.

Apply For Loan Against Property Lowest Interest Rates @ 8.75% p.a.

To know loan against property interest rates all banks CLICK.

Q. Can a borrower apply for loan against property with bad CIBIL?

Ans:- A borrower can apply for loan against property with bad credit, but the low CIBIL has less chances for the loan approvals. Moreover there are Banks/NBFCs that provide mortgage loans to the borrowers with low CIBIL scores provided the justification for the low score is sought, but the interest rates on mortgage loan and processing fee for mortgage loan will remain high for such cases.

Read more on CIBIL and its significance refer to the link – “https://www.loanfasttrack.com/blog/blog/finance/cibil-and-its-significance-in-home-loan/”.

Q. How much CIBIL score required for Loan against property?

Ans:- An average score of 750 and above is considered to be a good CIBIL score to apply for a mortgage loan in India.

Q. How much will be my EMI for loan against property?

Ans:- Your EMI for mortgage loan will depend on the loan amount, interest rate and the mortgage loan tenure. You can easily calculate your EMI using the loan against property EMI calculator of Loanfasttrack. Our calculator will also help you to compare the multiple EMIs with different loan tenures and interest rates and choose the one that best suits you.

Q. Can I opt for a loan against property balance transfer in future along with top-up?

Ans:- Yes. You may approach another bank in future for a mortgage loan balance transfer along with a top-up loan to enjoy the benefits of low interest rates on mortgage loans. However the loan against property top up eligibility will be subject to your income eligibility and to the market value of the property. The cumulative principal loan amount and the top-up amount cannot exceed the prescribed LTV norms of the bank.

Q. What are the loan against property tax benefits?

Ans:- Loan against property tax rebate is applicable only on the interest paid.There are no tax exemptions for the principal amount in mortgage loans.

  1. Interest can be claimed as business expenses under section 37(1) if the end-use for the mortgage loan is for business purposes.
  2. Interest can be claimed as business expenses under section 24(b) if the end-use for the mortgage loan is for purchasing house or home renovation or repairs.
  3. No interest exemptions if the end-use for the mortgage loan is for personal reasons such as, children education, marriage expenses, etc.

Q. What are the loan against property documents required?

Ans:- Loan against property documents list includes:

  1. KYC (pan card, aadhar card, residential and office proof),
  2. Financial documents

For Salaried- 4 months salary slips, 2 years form 16, 6 months bank account statement.

For Self-Employed- 3 years ITR copy, business profile & business proofs.

  • Property documents (prior chain of agreement, OC/CC + plan copy, Index 2, share certificate, property tax and property maintenance).

Refer link https://www.loanfasttrack.com/blog/blog/finance/mortgage-loan-list-of-documents-for-salaried-customers/ for detailed list of loan against property papers

&

https://www.loanfasttrack.com/blog/blog/finance/document-checklist-for-mortgage-loan-balance-transfer-for-salaried-customers/ for detailed list of documents required for loan against property balance transfers.

Q. Can a borrower apply for loan against property without income proof?

Ans:- Loan against property without any income proof is not possible. However, a loan against property without ITR for self-employed customers is possible under the banking surrogate product of the banks, wherein the loan is provided only on the basis of banking statements of the borrower. Multiple bank accounts can be considered for higher loan eligibility of loan against property for self-employed. Current account is mandatory for all self-employed except for the self-employed professionals.

Q. Can a mortgage loan be transferred to another person?

Ans:- All co-owners of the property have to be co-applicants on the loan. A mortgage loan transfer from one applicant to another co-applicant to the loan is possible provided   the applicant gives up his ownership rights by signing a release deed subject to the income eligibility of the co-applicant

Q. Can NRI take loan against property in India? How to get Loan against property in India?

Ans:- There are only limited banks that provide loan against property for NRI. ICICI Bank, one of the leading private banks in India provides “Loan Against Property NRI”. NRI loan against property is available only for salaried NRIs working in the countries other than Iran, North Korea (Democratic People’s Republic of Korea), Cuba, Syria, Sudan, and Cremia Region of Ukraine, Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Nepal, Macau, nigeria, Hongkong or Bhutan. Self-employed NRI cannot apply for mortgage loans in India.

You can visit Visit Loanfasttrack or click the link given below https://www.loanfasttrack.com/mortgage-loan/apply-online-now.html. Alternately you can also email on  info@loanfasttrack.com or directly speak to Loanfasttrack experts on 9321020476.

Click For NRI list of documents for applying loan against property.

Apply For Quick Loan Against Property In India

Q. Which banks provide loan against property?

Ans:- All Banks & NBFCs provide loan against property.

Loan against property banks includes all nationalized & private sector banks. Leading bank for mortgage loans in Mumbai is ICICI Bank. Apply for a loan against property of ICICI Bank today.

Loan against property NBFC – HDFC Ltd. lead the loan against property by NBFCs. Apply for a loan against property of HDFC Bank today.

Q. Which mortgage loan is best for me?

Ans:- Loan Against Property Comparison Of The Top Banks

  Loan Against Property ICICI Bank Loan Against Property HDFC Ltd. Loan Against Property Canara Bank
Rate Of Interest 8.95% p.a. 8.95% p.a. 9.80% p.a.
Processing Fees Upto 1% on loan amount. Upto 1% on loan amount. 0.50% on the loan amount.
Processing Time 15-20 working days 20-25 working days 30 working days
Online Processing Possible Possible Not Possible

CLICK to know further for selecting the loan against property best bank.

Apply For Loan Against Property In HDFC Bank

Q. Kindly explain on loan against property eligibility ICICI Bank?

Ans:- Loan against property eligibility Criteria with ICICI Bank:

  • Eligible Profile – Salaried, self-employed, self-employed professionals & NRI.
  • Minimum Loan Amount – Rs.15 lakhs.
  • Processing Fees – Upto 1% on loan amount. (Attractive cashback offers from Loanfasttrack for mortgage loan above Rs.50 lakhs)
  • Processing Time – 15 to 20 working days.
  • Rate Of Interest – 8.90% p.a.
  • LTV – 60%-70% for residential and commercial property & 50%-55% for industrial property.
  • Part Payment Charges – Nill.
  • Foreclosure Charges – Upto 2% on the outstanding loan amount. (Pre-payment charges vary between eligible profile)

Q. What are the loan against property advantages?

Ans:- Loan against property benefits:

  • Fulfill immediate requirement of funds.
  • Interest rates are low as compared to personal loans.
  • Get a flexible repayment tenure.
  • Can get funds in the form of OD, especially suitable for an self-employed borrower to meet his requirement of working capital.
  • A co-applicant can be added to get higher eligibility.
  • Multiple properties can be considered for the calculation of the LTV, and to enhance the eligibility.
  • Online processing of loan.

Q. What is the loan against property repayment schedule of 50 lakhs for 15years?

Ans:- Assuming the lowest interest rate of 8.90%, find below is the loan amortization chart of 50 lakhs for 15 years. (Starting from the month of August 2020).

Year Total EMI Principal Interest Balance
2020 2,52,080 67,661 1,84,419 49,32,339
2021 6,04,992 1,72,960 4,32,032 47,59,379
2022 6,04,992 1,88,998 4,15,994 45,70,382
2023 6,04,992 2,06,520 3,98,472 43,63,860
2024 6,04,992 2,25,670 3,79,322 41,38,190
2025 6,04,992 2,46,594 3,58,398 38,91,595
2026 6,04,992 2,69,462 3,35,530 36,22,135
2027 6,04,992 2,94,444 3,10,548 33,27,691
2028 6,04,992 3,21,747 2,83,245 30,05,945
2029 6,04,992 3,51,580 2,53,412 26,54,366
2030 6,04,992 3,84,178 2,20,814 22,70,189
2031 6,04,992 4,19,798 1,85,194 18,50,389
2032 6,04,992 4,58,725 1,46,267 13,91,665
2033 6,04,992 5,01,258 1,03,734 8,90,408
2034 6,04,992 5,47,734 57,228 3,42,673
2035 3,52,912 3,42,674 10,238 0

Q. Is it possible to get loan against property on residential plot?

Ans:- Yes. Loan against property on open plot is possible. At times it is also referred to as land loans by lender Banks & NBFCs.

Q. Is It possible to apply for loan against property online?

Ans:- Yes. You can apply for an online process of your mortgage loan application with banks like ICICI & HDFC. You can also upload your documents online for the loan processing. Give us a call on 9321020476, our professional experts will guide you.

Q. What are the terms and conditions to apply for loan against property?

Ans:- Loan against property terms and conditions:

  • Should have a regular flow of income.
  • Should have a good CIBIL score.
  • Property must be within the corporation city approved limits.
  • The property must be the ownership property-  self owned, jointly owned or a parental owned property (Only residential, commercial or industrial property).
  • All property co-owners have to be the co-applicants in the loan.
  • If the property is in parental name and you as 1 of the siblings wish to apply for the mortgage loan, it is mandatory to obtain the NOC, from the rest of the siblings.
  • Restrictions on the end-use of the mortgage funds, where the mortgage funds cannot be utilized for trading and speculative purposes, investments in stocks & mutual funds, for new start-up business, etc.

Q. What is the procedure for Loan against property?

Ans:- Read below for the loan against property process.

  • The loan process starts by applying with the best bank for a mortgage loan, by submitting the required set of documents along with the application form.
  • Documents are checked for any queries.
  • FI (Field Investigation) visits will be arranged at residence & office.
  • Property market value will be ascertained through the technical visits.
  • The file will be forwarded for sanction.
  • Processing fees will be collected on loan sanctioned.
  • Property legal will be conducted to ensure the property has a clear and marketable title.
  • On loan sanction with clear legal & technical reports, loan disbursement will be the final process.
  • You are then required to submit the original property papers along with the disbursement kit duly signed.

Q. Is there any product to take loan against property for senior citizens in India?

Ans:- Yes, loan against property for senior citizens is available. The Product is Reverse Mortgage. Reverse mortgage provides loan against property for pensioners and loan against property for retired persons who are above 60 years. It does not require any income source or CIBIL scores. Only the senior citizen must possess a self-owned or jointly owned property with the spouse.

agent

For complete details on Reverse Mortgage refer to – REVERSE MORTGAGE- Loan For elderly

Q. The Coronavirus pandemic has brought unemployment in the city. Is it possible to get a loan against property for an unemployed?

Ans:- The recent past effect of the pandemic had a huge impact on the employment of the people. Many have rendered jobless owing to the economic pressures. While many leaned towards applying for personal loans and mortgage loans to satisfy their immediate requirement of funds, banks on the other hand altered their lending policies and accordingly loan against property for unemployed is not possible.

Solution: Add an co-applicant (having regular flow of income) to your loan application. Know who can be your co-applicant – CLICK. Alternately you can also show your additional source of income such as rental income if any, agricultural income if any, etc.

Q. How to take loan against property?

Ans:- Simple. Visit Loanfasttrack or you may directly click on the below link

https://www.loanfasttrack.com/mortgage-loan/apply-online-now.html. Enter the basic details (name, contact number & location), choose the bank/banks and submit.

Loanfasttrack will get in touch with you within 24 hours.

Q. Why Loan against property to be applied through Loanfasttrack?

Ans:- Loanfasttrack is a trusted agency in Mumbai among the loan against property agents. Loanfasttrack is a specialized loan provider company in Mumbai since 2015 offering loan services in Mumbai on– housing loan in Mumbai, mortgage loan in Mumbai, personal loan in Mumbai, business Loan in mumbai, unsecured business loans,home loan transfer, top-up loans, car loans and loan transfers.

Loanfasttrack will provide you hassle free services at your doorsteps with comparative evaluations of more than 13+ top banks, with no additional cost.

Loanfasttrack’s specialized services includes providing:

Additional Read:

What Loans Can I Get On My Property

by admin
loan services mumbai

Introduction

Food, clothing, and shelter are our basic needs. At some point in time, we all invest in immovable asset i.e. property. We may invest in residence/ home, commercial property, office spaces, or even buy commercial or residential plots. Apart from adding to assets in our balance sheets, the property also helps you to raise funds in our emergencies by taking a loan on the property. 

Since all loans include property they are termed as the secured loans. There are 9 types of loans that you can get on a property. They are as below:

1) Home Loan

A loan taken to purchase a new house is called a “Home Loan”. One may choose to purchase a house directly from a builder or may buy in resale. Therefore in home loan industry home loan are of two types, i.e.

a) Home Loan Builder Case.

b) Home Loan Resale Transaction.

In both types of property is given as security to borrow funds required for purchasing the house in the form of a loan.

2) Commercial Loan.

A loan taken to purchase a commercial property is called a “Commercial Loan”. Commercial property means property used for commercial purposes such as offices, warehouses, factories, commercial land /plot, etc. One may choose to purchase a commercial property directly from a builder or may buy in resale. Therefore in home loan industry commercial loan are of two types:

a) Commercial Loan Builder Case.

b) Commercial Loan Resale Transaction.

3) Mortgage Loan

Also called Loan Against Property, is a loan taken by pledging the property as a security to take the desired amount of loan. Both Mortgage Loan and home loan take property as a security then how dies both differ- the basic difference is- in the home loan the loan amount is paid directly to the builder in builder case or to the reseller in receipt transaction while in the Mortgage Loan the loan amount is credited to the loan borrower’s account.

4) Home Improvement Loan

It is a type of unsecured loan which is taken for the repairs and maintenance reconstruction, development, and renovation of the property. 

Home Improvement Loan considers a range of facilities internal or external to the structure without an increase in the living space like painting, tiling and flooring, waterproofing, plumbing, and sanitary work, remodeling kitchen, or bathroom, etc. 

Construction of a house on an open plot where an open plot is given as security to take a loan is also a home improvement loan.

A top-up loan is taken for home improvement on home/mortgage Loan where the property is already taken as security can also be termed as a home improvement loan.

5) Reverse Mortgage.

A reverse mortgage is a loan for elderly/senior citizens above the age of 60 years, in which an elderly can avail regular/periodical payments from Banks/ NBFC against the mortgage of their house while still retaining the ownership of the house and occupying the same. Reverse Mortgage does not require any Income or Credit Score requirements, only the senior citizen must possess a property that is self-acquired and self-owned or jointly owned with a spouse. However, it is important to note that no ancestral property or commercial property is eligible for a reverse mortgage.

6) Balance Transfer Loan.

Transferring your existing high-interest rate loan to the bank with a low interest rate is called the balance transfer of the loan. Secured loans like home loans, mortgage loans, or even commercial loans can be transferred to enjoy the benefits of loan EMI in low-interest rates.

7) Secured Business Loan Against Property.

Loan taken for business purposes by self-employed individual/entrepreneur is called a business loan. A business loan is a type of a personal loan but a major difference between the both is – a personal loan is really unsecured loan while a business loan can be secured as well as unsecured. 

A property can be given as a security to avail business loan especially when one has to draw higher loan amount.

8) Home Loan & Mortgage Loan O/D.

Apart from taking a traditional home loan or a mortgage loan, an overdraft with a home loan or mortgage loan is the new product in the market since the recent past. Under such a product a loan borrower can withdraw the loan amount as per his requirement of the amount in the form of an overdraft facility.

9) Home Loan & Mortgage Loan Top-Up.

A loan taken on an already existing home/mortgage loan is called a top-up loan.

A top-up loan is taken to meet your immediate requirement of funds, for example, home renovation repairs, children’s education, child marriage, business purpose, etc.

Know The New Loan Products

by admin
Know the new loan products

We all know the traditional loan products in the home loan industry i.e. the home loan product & the mortgage loan product. We assume that you also know the very common facts and figures of such products such as the rate of interest, processing fees, other charges, offering banks, fixed or floating rate of interest, loan tenure, etc. Also, the one who wishes to take a loan does make a research/study of the products to ensures he knows the necessary loan product he wishes to opt for.

In the view of the change in the field of the home loan industry, newer products and extended benefits of the traditional products have found its way. In order to meet the specific requirement of the loan borrowers, products are being upgraded with extended benefits to match their requirements. 

Smart home loans, mortgage o/d, reverse mortgage are examples of such specially upgraded products introduced to meet the specific requirement of the loan borrowers. Let’s know about these products, their benefits and how are they different from traditional products.

1) Smart Home Loan

The other name for a smart home loan is “home loan saver” product. A home loan that enables one to save interest and thereby reduce the loan tenure is the Smart Home Loan. In this product, the home loan is linked to your savings or current account with the same bank. The surplus funds in your account help to reduce the interest liability on your home loan. How? – Whenever a surplus amount is deposited, the bank deducts this amount from the home loan principal amount for calculating the interest and the interest is charged only on the balance outstanding loan amount. 

It is important to remember that any such surplus deposits are used only to lower the interest liability. No interest is paid on the surplus deposits. However, there are no restrictions on the withdrawal of this surplus money or a part of it. 

Not all banks offer this product. As of now, only a few specific banks offer this product that includes Standard Chartered Bank, SBI, Citibank, HSBC, and IDBI Bank. 

The rate of interest for a smart home loan is usually 0.50%-1% higher than the normal home loan interest rates. 

2) Mortgage Overdraft

The name itself suggests- where a mortgage loan is given in the form of overdraft facility it is called “Mortgage O/D”. The product is majorly implemented to meet the working capital requirement of the business class. It is provided against the mortgage of property which can either be residential or commercial.

Facilities in mortgage o/d are similar to normal overdraft account, as an interest to be charged only on the used amount i.e. the loan amount withdrawn, no conditions on prepayment of the loan, no foreclosure charges, no restrictions on the number of times pre-payments done, etc. It is mandatory for the applicant to open a current account with the loan applying bank if he does not one with the bank.

Banks that offer mortgage o/d are namely-ICICI bank, HDFC, Axis Bank, Bank of Baroda, etc.

The rate of interest for mortgage o/d is generally 1%-2% higher than the mortgage loan.

3) Reverse Mortgage

With due respect to the elderly who want to live independently, the Union Government of India introduced the concept of Reverse Mortgage in order to secure their financial requirements of meeting their day-to-day living expenses and increasing cost of medical treatments.

Reverse Mortgage helps the senior citizen above the age of 60 years to avail of regular/periodical payments from Banks/Non-Banking Financial Institutions (NBFC) against the mortgage of their house while still retaining the ownership of the house and occupying the same. The interest amount in this type of loan is rolled into the loan balance, also the borrower does not have to repay the loan borrowed under reverse mortgage during his life, lifetime or till such time he continues to stay in the house. The entire loan balance along with the interest becomes payable only when the borrower sells the house or moves away permanently or when the last surviving borrower dies OR when the borrower willingly pre-closes the loan.

It is important to note that the money borrowed in reverse mortgage cannot be used for any business or trading purposes or for investments in shares or real estate/ properties.  They can be used only for a specific purpose like meeting the day-to-day livelihood expenses and the medical treatment of the borrower, spouse or dependant person, repairs and renovation of the property.

Banks/ NBFCs which provides Reverse Mortgage in India are, SBI, Central Bank of India, Indian Bank, PNB, Andhra Bank, Canara Bank,  Corporation Bank, NHB, LIC Housing Finance, DHFL, etc.

An Insight Into Indian Stock Markets

by admin
An Insight Into Indian Stock Markets

An corrected market is an opportunity call to invest into tumbled stocks. The history of stock exchanges and the stock trading has witnessed numerous incidents of people becoming rich overnight as well as impecunious at the same time. People therefore have advanced in saying the stock market is a gamble, an authorized legal gamble. Not surprised, but the remark is a confirmed stamp especially from those who have squandered their coffers & bank balances by burning their fingers in stock trades.  

However the stock markets are beyond anyone’s derogatory speculation and imaginations. And it is therefore important to understand this stock market and its perspectives, its functioning, trading, investments, risks, profits, etc. This motive leads to the formation of our blog “An Insight Into Indian Stock Markets”.  

The history of the stock exchange dates back to the 18th century, when the BSE-Bombay Stock Exchange was formed in 1875. Formerly known as “The Native Share and Stock brokers Association” – it was formed by an informal group of stock brokers. The leading stock broker of that time Mr. Premchand Roychand assisted in setting out its traditions, conventions, and procedures for trading of stocks at Bombay Stock Exchange which are still being followed. In 1956, the Government of India recognized the Bombay Stock Exchange as the first stock exchange in the country under the Securities Contracts (Regulation) Act. Later in 1992 the National Stock Exchange- NSE was introduced as the first dematerialized electronic exchange in the country. Its electronic trading system removed the paper-based settlement system from trading and provided a modern, fully automated screen-based electronic trading system which offered an easy trading facility to the investors.

Understanding the terms

Stock Exchange:Stock Exchanges are an organized marketplace that provides a trading platform for the buyers and sellers to meet to transact in company stocks or other securities. The main function of the stock exchanges is to:

  • Provide trading platform to investors and provide liquidity 
  • Register the members- Stock Brokers & sub brokers
  • Provide Indices
  • Manage the risk in securities transactions 
  • Facilitate the listing of securities 

There are many exchanges in India; the prominent two which are popular and are trading in high volumes are the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE). 

Sensex: Sensex is the first benchmark equity index of BSE which was introduced in the year 1986. It provides a base for identifying the top 30 trading companies of the exchange from more than 10 sectors. The other indices of BSE other than Sensex includes BSE 100, BSE Midcaps, BSE Small caps, BSE Auto, BSE Pharma, BSE Infra, BSE Metal, BSE PSU, etc. 

Nifty: Nifty is the benchmark equity index of NSE which was introduced in the year 1996. It consists of top 50 companies actively traded stocks. Nifty is also known as Nifty50 or CNX Nifty. 

NSDL & CDSL: NSDL and CDSL are the two largest securities depositories in India. In the depository system, securities are held in depository accounts, which is similar to holding funds in bank accounts.

NSDL: Is the National Securities Depository Limited founded in the year 1996 and is promoted by NSE. It is the first depository in India to handle the most of the held securities and their settlements in dematerialized form in the Indian capital markets. The older systems of paper-based settlement of trades caused substantial problems of bad delivery and delayed transfer of title and therefore the NSDL was introduced to allow the investors and traders to securely hold and transfer their stocks electronically. Their safekeeping is not limited only to the stocks but also to their other services such as stocks, bonds, debentures, commercial papers, mutual funds, etc.

CDSL: Central Depository Services (India) Ltd. i.e CDSL founded in 1999 is the second Indian central securities depository based in Mumbai, being promoted by BSE. It also facilitates the holding, transferring and transacting in securities in the electronic form and settlement of trades on stock exchanges. These securities include equities, debentures, bonds, units of mutual funds, certificate of deposits (CDs), commercial paper (CP), Government securities and Treasury Bills.

SEBI: SEBI – The Securities and Exchange Board Of India is a regulatory authority established in 1992 to regulate the securities markets of India and to protect the interests of the traders, investors, brokers & sub-brokers and prohibiting the fraudulent & unfair trade practices in the securities markets.

Though the history of the stock markets remains indifferent for the investor, it remains important for them to know these basic terminologies and understand its functions before investing / trading into the stock markets. 

Trading in Stock Markets

The main motto of any investor or trader to enter the stock markets is earnings i.e. to earn on their invested amounts invested in securities and stocks.There are no definite formulas or equations that can ascertain the volatile stock indexes and ascertain the future prices of the listed stocks. However predictions can be made on the expected returns and the appreciations on the stock prices on the basis of its (company’s stocks) past performances, announcements from the company, sectoral specific news, chart reading and interpretations, etc. For doing this research there are R&D teams (Research & Development) with stock-broker companies that carry out the research and studies on the stocks-history, volatility, past movements, range, 52 weeks high & low, circuit levels, internal and external factors/ announcements affecting the stock prices, etc. This study is of vital importance in PMS services offered by the stock broking houses. PMS – Portfolio Management Services is an investment portfolio in stocks managed by a professional portfolio manager that can potentially be tailored to meet specific investment objectives. The SEBI guidelines on PMS states that one needs to invest a minimum of Rs. 5 lacs for PMS. However the minimum amount requirement criteria for the PMS may vary between broking house to houses. 

The high volatility and the unpredictable nature of the stock markets states one must acquire patience over the invested amount if good profits are to be earned. Ideally the stock investments should be made from a long term perspective. The greed for the short term earning by conducting short term trades or intraday churns can extinguish the entire invested amount or may limit the profits and may also post loss in the books of accounts. It is therefore important that one must study the stock markets and its trading etiquettes before jumping into the volatile ocean of stocks trading. Below mentioned are few of the important trading etiquettes & protocols:

1. Understanding the function of demat account and trading account. In simple language a demat account is an account where the shares are stored while the trading account is a fund/margin account that stores the money through which the shares are bought. 

2. The capital gains earned through the stock trades are classified as either long-term gains or short-term gains and are therefore taxed accordingly.  The dividend income earned on the shareholdings is also subject to income tax. 

3. There is a capping on the percentage increase in the prices of the stocks per day. This is referred to as circuit levels of the stocks. There can either be a buying circuit or a selling circuit in a stock. Buyer circuit implies there are only buyers in the script and no sellers while the seller circuit means there are only sellers and no buyer in the script.

4. The 52 weeks high and the 52 weeks low of the stocks are considered as the benchmark prices for facilitating the trades.  

5. The indexes are driven by the heavy weighted stocks also known as large caps whose prices are the driving force for the direction of the indexes. 

6. There are basically three types of trades

  • Delivery/cash carry forward trades- buying a stock which can be sold at a later date.
  • Intraday trades- buying and selling in a stock only for a day.
  • Derivative trades in Future and options –

For Delivery/carry forward trades

(a.) Utilize own funds and buy stocks in delivery/cash trade over intraday preferences. This reduces the risk of loss. 

(b.) In delivery trades brokerage is charged on both legs i.e. for buy as well as sell plus the applicable taxes.

(c.) Same dated cash delivery trade punched for buy and consequently sold for the same quantity is treated as intraday transaction and intraday brokerage is applicable. 

(d.) Shares- dividend, split, bonus, etc. are applicable only on the long term share holdings. 

For intraday trading always remember:

(a.) Always trade with the market trend. 

(b.) Avoid trading in high volatile markets.

(c.) Intraday trades also facilitate selling first and then buying in the underlying stocks.

(d.) Always buy and sell if the market is bullish OR first sell and then buy if the markets are bearish. 
(Bull Market – market is positive and the stocks are trading in green
Bear Market – market is negative and the stocks are trading in red)

(e.) Avoid trading on extra margins especially in volatile and unpredictable markets.

(f.) Do not rely on “TIPS”. They may be misleading at times. Rely on your own instincts.

(g.) Book profits on regular intervals. Do not greed for more. Be satisfied with the profits already booked. 

(h.) Entry and exit is important in intraday trades.

(i.) Always trade with a stop loss.

(j.) Do not utilize your full margins on a single trade. Keep funds for averaging.

(k.) Remember intraday trades are subject to square off at 3.pm. Close all intraday open positions before 3 pm or else the positions will be auto-squared off after 3 pm at whatever prevailing stock price. If you wish to carry forward the open intraday position convert the intraday trade to delivery/cash. 

(l.) Brokerage on intraday is charged on a single leg plus applicable taxes.

(m.) Learn to reverse the positions. Eg. if got stuck in a long position (i.e. the buy position) and the market is short (i.e. negative) book loss and over sell to create a short position and vice-a-versa.

For derivative trading

(a.) In derivatives trade there is no scope for buying a single quantity of shares. Unlike in cash delivery and intraday trades the futures and options contracts have a pre-decided lot size consisting of the number of shares and the trade has to be placed in the multiple of lot sizes.

(b.) Brokerage charged is similar to intraday trades – on single leg plus applicable taxes for future trades & flat fee per lot on both legs for buy as well as sell trade in options.

(c.) Futures are contracts where the buyer and seller enter into a contract to buy or sell at a predetermined future date and price. 

(d.) Options are financial instruments that are derivatives based on the value of underlying securities such as stocks. In options the holder is not required to buy or sell the asset if they choose not to.

(e.) There are two types of options: a Call option and a Put option. To define a call option – it gives the owner the right, but not the obligation, to buy a specified amount of an underlying security at a specified price within a specified time, to define put option – it gives the owner the right, but not the obligation, to sell a specified amount of an underlying security at a specified price within a specified time.

(f.) In simple terms, the call is the long (buying) position in the option and the put is the short (selling) position in the option of the underlying stock.

To summarize: Share market is one of the apt choices of investments over a horizon period of long term share holding pattern. It gives dual benefits to the investors. First, the appreciation in the prices of the stocks is the long term capital gain and second the dividend earned on the shareholdings is also an income to the investors. Investors eye on the opportunities to invest into tumbled stocks and add to their net worth with the increased profits on the share prices. Indian stock markets are one such market that has provided promising returns to its investors. History evidence has shown that our markets have reacted impulsively in comparison to other worldwide markets but have recorded promising recoveries by providing good returns on the investments. The past impact of viruses such as SARS, Avian Influenza i.e. bird flu, EBOLA & Zika took a severe hit on the stock markets and the Indian markets crashed heavily along with the worldwide stock markets reacting negatively to these viruses. However sharp recovery was noticed in the markets especially the Indian stock markets which recovered to provide more than 50% returns over a year. In light of the past performances of the Indian stock markets, the current market correction in the Indian stock markets owing to the pandemic Covid19, can also be assumed as an investment opportunity for buying the stocks at cheaper prices by the investors. 

Loanfasttrack is a Mumbai based loan provider company since 2015 offering loan services in Mumbai on– housing loan in Mumbai, mortgage loan in Mumbai, personal loan in Mumbai, business Loan in Mumbai, unsecured business loans, home loan transfer, top-up loans, car loans, educational loans and loan transfers.

It also helps you:

√ To find the best bank for home loan

√ To get lowest home loan rates in Mumbai

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√ To get instant personal loan in Mumbai & business loan in Mumbai

Speak to our experts on 9321020476 or log on to  https://www.loanfasttrack.com/ for additional details.