Home Loans in India – Now Lot Smoother to Avail and Repay

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With the income of middle class people in India increasing rapidly, buying home has become one of the top priorities for them. So, one can see constructions of homes going on everywhere. These homes are being provided through loans. Home Loans in India have therefore become inevitable for buying homes. Home loans are being given in India for variety of purpose including buying or constructing a new home, for buying plots and these loans are given also against mortgage of property.

The loan amount approved as home loans for borrowers in India depends on repaying ability of the borrowers and value of the home. But usually housing finance companies sanction up to 80-85 percent of the home cost. The borrower is required to place a certain percentage of the loan as down payment. Rest of the repayment of the loan is made through installments that include interest on the loan.

Before the loan is approved, housing finance companies in India take collateral securities from borrowers for safe return of the loan amount. These securities include guarantee form one or two persons, life insurance policies assignments, share or unit deposits or any other securities.

Interest rate on home loans for India is both fixed and floating. Fixed rate allows for a fixed payment towards the interest through out the loan duration. Floating rate may fluctuate as per existing market interest rate. So the borrowers can opt for a suitable rate.

In India home loans have become a lot easier to repay. This is mainly thanks to various repayment plans introduced to the borrowers. So each borrower can choose to opt for a suitable plan of repaying home loan as per individual repaying ability and circumstances.

The home buyers in India have conventional EMI repayment method for clearing home loans installments. But this method may or may not suit to borrowers as circumstances vary. So lenders offer other easier repaying options to the borrowers.

For instance there are banks which have variable monthly installment scheme. This repayment plan is flexible for a salaried borrower and allows for paying lower portion of the loan in the initial stage of the loan and as the salary increases, the borrower can repay greater portion of the loan later. This plan facilitates for repaying greater loan and is more convenient than EMI based repayment plan.

Those borrowers who are going to retire they can repay greater portion of the loan early as they can support the repayment through monthly salary. After they have retired they can choose to repay smaller loan portion.

For taking home loans in India the borrower is supposed to show latest salary slip, form 16 which shows tax deduction at source by an employee, proof of age and residence

In India home loans are sourced from either banks or public sector housing financing companies or from financial institutions. As far as charges and fees is concerned, housing finance companies take 0 to 8 percent processing fee and once the loan is approved you are required to pay 1 percent of the loan amount as administrative fees.

By : Meghna Arora