India’s Top 10 Home Loan Providers
Home Loan Providers: For the purpose of acquiring or building a home, a home loan is a sort of financial assistance obtained from any financial organisation, such as a bank or housing finance company (HFC), which are generally referred to as “lenders.” This loan is provided by the lender based on an evaluation of the applicant’s (borrower’s) repayment capacity as well as certain technical and financial factors of the property being purchased since it must be returned through equivalent monthly instalments (EMI) over a period of typically 10–25 years.
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Different Lenders Offering Home Loans
In India, banks and certain HFCs are frequently the main lenders of housing loans.
A specialised non-banking finance company that solely offers home loans is known as an HFC. Other banking services like receiving deposits, transferring funds, providing payroll services, etc. are not a part of its business.
- Institutions like the State Bank of India (SBI), ICICI Bank, Axis Bank, etc. are examples of banks.
- Companies like DHFL, Indiabulls Home Loans, LIC Housing Finance, etc. are examples of HFCs.
Home Loan Providers – What are India’s Top 10 Home Loan Providers?
The interest rate, which determines the EMI payment amount, is one of the key considerations when selecting a home loan provider. In addition, additional elements are taken into account, such as the maximum loan amount eligible, the maximum tenure allowed (Link to the article on the Ideal Home Loan Tenure), processing fees, and other pertinent expenses, etc.
The interest rates are essentially the same among all lenders in India because all banks adhere to Reserve Bank of India (RBI) standards to give house loans based on Marginal Cost of Funds based Lending Rate (MCLR). However, given that a home loan often has a bigger loan amount and a longer duration than a vehicle loan or a personal loan, even a 0.1% difference in interest rates results in a sizable difference in the EMI, and consequently, the total interest paid over a 20-year period. These interest rates vary depending on the loan amount slab, as set by each bank.
In a similar vein, HFCs adhere to the rules established by the National Housing Bank (NHB).
In accordance with RBI and NHB regulations, lenders are also prohibited from imposing fees or penalties on borrowers who return their loans early.
Based on the affordability and other pertinent criteria of their house loans for salaried and self-employed applicants as of September 17, 2020, we have created a list of 10 prominent lenders who offer home loans in India (in no particular order).
- State Bank of India (SBI) is the biggest bank in India and was founded in 1955. It is a public sector bank with more than 24,000 branches both domestically and overseas.
| Interest Rate | Minimum | Maximum |
| Salaried | 6.95% | 7.30% |
| Self Employed | 7.10% | 7.45% |
Maximum tenure allowed: 30 years
Processing fees: 0.4% (Min: Rs. 10,000; Max: Rs. 30,000)
Overall affordability: High
-
ICICI Bank:
ICICI Bank is a prominent private sector bank in India. It is one of the largest banks in India, and has more than 5,000 branches in India and 17 other countries.
| Interest Rate | Minimum | Maximum |
| Salaried | 6.95% | 7.95% |
| Self Employed | 7.20% | 8.05% |
Maximum tenure allowed: 30 years
Processing fees: 0.5-2.0% (Min: Rs. 1,500; Max: NA)
Overall affordability: High
-
HDFC Bank:
HDFC Bank is one of the major commercial banks in India. It is the second-largest bank in India and operates through a network of more than 5,300 branches.
| Interest Rate | Minimum | Maximum |
| Salaried | 6.95% | 8.20% |
| Self Employed | 7.20% | 8.35% |
Maximum tenure allowed: 30 years
Processing fees: 0.5% (Min: Rs. 3,000; Max: NA)
Overall affordability: High
-
Bank of Baroda:
Bank of Baroda (BoB) is the third-largest public sector bank in India, following its merger with Dena Bank and Vijaya Bank in April 2019. It is a major multi-national commercial bank, having around 10,000 branches worldwide.
| Interest Rate | Minimum | Maximum |
| Salaried | 7.55% | 9.05% |
| Self Employed | 7.55% | 9.05% |
Maximum tenure allowed: 30 years
Processing fees: 0.5% up to Rs. 50 Lacs; 0.25% above Rs. 50 Lacs (Min: Rs. 8,000; Max: Rs. 25,000)
Overall affordability: Moderate
-
Axis Bank:
Axis Bank is one of the prominent private sector banks in India, established in 1993. It operates through a network of around 4,500 branches in India and 5 other countries worldwide.
| Interest Rate | Minimum | Maximum |
| Salaried | 7.75% | 8.40% |
| Self Employed | 7.95% | 8.55% |
| MCLR based Interest Rate | 7.50% | 7.50% |
| Fixed Interest Rate | 12.0% | NA |
Maximum tenure allowed: 30 years
Processing fees: 1.0% (Min: Rs. 10,000; Max: NA)
Overall affordability: Moderate
-
LIC Housing Finance:
It is a Housing Finance subsidiary of Life Insurance Corporation (LIC) of India, the largest insurance company in India. It has operations in India, Kuwait, and the United Arab Emirates (UAE) through a network of more than 300 offices.
LIC Housing Finance also offers Home Loans to pensioners.
| Interest Rate | Minimum | Maximum |
| Salaried | 6.90% | 7.80% |
| Self Employed | NA | NA |
Maximum tenure allowed: 30 years for Salaried; 20 years for Self Employed
Processing fees: 0.25% up to Rs. 50 Lacs; 0.25% above Rs. 50 Lacs (Min: NA; Max: Rs. 10,000)
Overall affordability: High
-
Indiabulls Home Loans:
Indiabulls Home Loans is a Home Finance subsidiary of the Indiabulls Group engaged in various businesses including real estate, electricals, pharmaceuticals, and consumer finance. It offers home loans through tie-up and various associations with other banks.
| Interest Rate | Minimum | Maximum |
| Salaried | 8.99% | NA |
| Self Employed | NA | NA |
Maximum tenure allowed: 25 years
Processing fees: Up to 2.0%
Overall affordability: Low
-
DHFL:
Dewan Housing Finance Corporation Limited (DHFL) is one of the largest Home Finance companies in India. DHFL lends based on Prime Lending Rate (PLR) which is an internal benchmark of the company, and has no advantage of low Repo Rate as with banks.
| Interest Rate | Minimum | Maximum |
| Salaried | 8.75% | NA |
| Self Employed | NA | NA |
Maximum tenure allowed: 25 years
Processing fees: 0.5% (Min: Rs. 2,500; Max: NA)
Overall affordability: Low
-
Union Bank of India:
Union Bank of India is a public sector bank in India, which got merged with Andhra Bank and Corporation Bank in April 2020. It operates mainly in India with around 9,500 branches.
In August 2020, Union Bank of India reduced the minimum interest rate on Home loans for women to 6.7% from 6.8% earlier. As of September 2020, Union Bank of India offers the cheapest Home Loans in India.
| Interest Rate | Minimum | Maximum |
| Salaried | 6.70% | 7.15% |
| Self Employed | 6.85% | 7.15% |
| Fixed Interest Rate (5 years) | 11.40% | 12.65% |
Maximum tenure allowed: 30 years
Processing fees: 0.5% (Min: NA; Max: Rs. 15,000)
Overall affordability: High
-
PNB Housing Finance:
It is a housing finance subsidiary of Punjab National Bank (PNB), the second-largest public sector bank in India. PNB Housing Finance was established in 1988, and is one of the major HFCs in India.
| · Interest Rate | Minimum | Maximum |
| Salaried & Self Employed Professionals | 8.60% | 9.75% |
| Self Employed (Non-Professionals) | 8.85% | 9.95% |
Home Loan Providers- Maximum tenure allowed: 30 years
Processing fees: 1.0% (Min: Rs. 3,000; Max: NA)
Overall affordability: Low
While PNB Housing Finance charges interest rates based on PLR similar to other HFCs, its parent company PNB gives home loans based on MCLR and Repo rates. Thus, the minimum rate of interest charged by PNB is 7.10-7.70%.
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