Assistance on getting a Home Loan/Housing Loan
Who Provides Housing Loan? or From where we can get Housing Loan?
Housing Loan can be availed from a Bank or Non-Banking Financial Institution. Bank consists of both Public Sector Banks and Private Sector Banks. The service quality of Public Sector Banks has also increased so well that people have preferred more included for Public Sector Banks than Private Sector Banks. In the other hand Non-Banking Financial Institutions (NBFCs) also offer Home Loans.
We will list out some top Public Sector Banks, Private Sector Banks and NBFCs who offer Housing Loan in the market a very competitive product features.
Public Sector Banks:
- State Bank of India
- Bank of India
- Bank of Baroda
- Canara Bank
- Punjab National Bank
- Union Bank of India
- Indian Bank
- Central Bank of India
- Bank of Maharashtra
- UCO Bank
- Indian Overseas Bank
- Punjab & Sind Bank
Private Sector Bank
- HDFC Bank
- ICICI Bank
- Axis Bank
- Kotak Moahindra Bank
- Yes Bank
- Federal Bank
Non-Banking Financial Institutions (NBFCs)
- HDFC Housing Finance
- LIC Housing Finance
- Indiabull Housing Finance
- L&T Housing Finance
- Bajaj Housing Finance
Team Loan Drishti will help you to get a Loan from any of these Institutions which will be better for you. Since we have an expertise of analysing the products in various parameter, we will choose the best institution for your long term decision for availing an Housing Loan.
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Amount of Loan Place wise
The quantum of loan differs from bank to bank. For Example, ABC Bank can provide loans as per the details given below:
All Metro Cities/All State Capitals/All Cities & Towns having big malls and airports - Rs. 750 Lacs
All other places - Rs. 500 Lacs
What is the maximum amount of loan can be availed based on quantum of the loan
Repayment Period
As a normal practice, Banks consider the repayment period upto the age of 60 till the date of retirement. However, the repayment can be increased upto age of 70 years, if the Bank satisfies the income source and repaying capacity of a person. The normal repayment period remains 300 EMIs i.e. 25 years. However the same can be decreased and increased by the Bank if found the borrower have the proper justifications about the repaying repaying capacity.
Till what age a person can get Housing Loan ("Repayment Period")
Eligibility based on Income
Loan Eligibility: A bank gives loan based on your income so that you can repay the loan by regularly paying the equated monthly instalments ("EMI") . This is normally called "Repaying Capacity" of a borrower. A specific portion of the salary/business income a portion is required to live and other portion you can afford to pay the EMI.
How much loan a person can get based on his income:
i. Salaried Employees can get loan upto 72 times of gross monthly salary OR 6 times of gross annual income based on Income Tax Returns;
ii. Self-employed Professionals Doctors, Chartered Accountants/ individuals engaged in Trade/ Commerce/Business, can get 6 times of their gross annual income based on Income Tax Returns.
Out of this eligibility, Banks have their own guidelines which decides how much percentage of the salary should be mandatorily taken to home after all deduction. This is called Net Take Home Pay ("NTHP").
We are giving the following examples adopted by a bank named ABC Bank (for example) to understand the NTHP concept better:
If Gross Monthly Income of a person is upto Rs.1 lac, then 40% NTHP is required after meeting all mandatory payments & deductions from income;
If Gross Monthly Income of a person is over Rs.1 lac to 5 lacs, then 30% NTHP is required after meeting all mandatory payments & deductions from income;
If Gross Monthly Income of a person is over 5 lacs, then 25% NTHP is required after meeting all mandatory payments & deductions from income.
How much loan you can get based on your salary income or business income?
Documents Required
Salaried:
Last Six Months Salary Slips
Last three years Form 16
Last three years ITR
Employment verification documents such as ID Card/Employment Letter
Bank Account Statement of last one year showing salary credit
Support for ITR Verification
Businessman/Self Employed:
Proof of business such as GST, Udyam Aadhar, Rent Agreement
Electricity Bill of the Place of Business
Last three years ITR
Bank Account Statement of last one year showing business transactions
Support for ITR Verification
Other Mandatory Documents:
Agreement for Sale/Sale Deed
Original Payment receipts
Proof of payments already made to dealer
TDS certificate if TDS has been paid
NOC for Mortgage from Builder/Society (After Sanction)
Margin
Borrower’s contribution (“Margin”): A bank does not give 100% loans of the cost of the flat/house to be purchased. A certain percentage amount of the total cost has to be brought by a person who is desiring to avail a housing loan. The percentage depends upon the quantum of the loan he is availing. This maximum amount is called loan-to-value ratio (LTV) which determines the maximum amount of a housing loan can be given based on the market value of the asset.
If the Housing Loan Upto Rs.30 lac, customer can avail upto 90% of the cost of the flat or house. The borrower has to arrange his own contribution called “margin” amount of remaining 10%.
For example, if the total cost of the flat or house is approx Rs. 33 lacs, Rs. 29.70 lacs can be availed in the form of housing loan and 10% of Rs. 33 Lacs i.e. Rs. 3.30 Lacs has to be paid by the customer. This is for illustration purpose only and in this way it is calculated for other percentage of borrower’s contributions of 20% and 25% in case the loan amount is more.
If the Housing Loan Above Rs.30 lac and Upto Rs.75 lac, customer can avail upto 80% of the cost of the flat or house. The borrower has to arrange his own contribution amount of remaining 20%.
If the Housing Loan Above Rs.75 lac, customer can avail upto 75% of the cost of the flat or house. The borrower has to arrange his own contribution amount of remaining 25%.
Charges e.g. stamp duty, registration charges and other documentation charges shall be borne by the borrower and shall not be considered towards margin money. However such charges may be added to the cost of the house/dwelling unit for the purpose of calculating LTV ratio in cases where the cost of the house/dwelling unit does not exceed Rs.10 lakh.
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How much loan you can get out of the total cost of the flat/house on the basis of borrower's own contribution ("Margin") ?
Rate of Interest & CIBIL Score
How rate of interest is decided on your housing loan based on your CIBIL Score?
Banks decide Rate of Interest on Floating basis. The Rate of Interest will be the sum of Benchmark rate plus additional rate. Banks are free to choose the benchmark rate. But in most cases banks choose the repo rate of Reserve Bank of India as benchmark rate. The additional amount of interest is normally based on CIBIL score. Let us understand with an example
For Example, ABC Bank offers the Home Loan Rate of Interest to different customers having different CIBIL score as mentioned below :
CIBIL-Personal Score of 760 and above:
Repo Rate (6.50%) + additional rate (2.75%)+ CIBIL score factor (-0.60%) = 8.65%
CIBIL-Personal Score between 725 to 759:
Repo Rate (6.50%) + additional rate (2.75%)+ CIBIL score factor (-0.50%) = 8.75%
CIBIL-Personal Score between 675 to 759:
Repo Rate (6.50%) + additional rate (2.75%)+ CIBIL score factor (-0.40%) = 8.85%
CIBIL-Personal Score is -1 and 0
Repo Rate (6.50%) + additional rate (2.75%)+ CIBIL score factor (-0.30%) =8.95%
CIBIL score below 675 are normally not considered or if considered, the customer is charged exceptionally high rate of interest.
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You can easily calculate how much amount you will pay monthly towards your equated monthly instalments ("EMI") of your Housing Loan you wish to take from a Bank or any finance company. By remaining at Home, you can know to know your EMI if you have three components ready after going through the above steps mentioned in our website:
Loan Amount you wish to avail
Rate of Interest to be charged by the Bank
Tenure upto how many year you want to repay the loan
Here are the links of EMI Calculators of some reputed banks:
State Bank of India: https://homeloans.sbi/calculators
ICICI Bank: https://www.icicibank.com/calculator/home-loan-emi-calculator
Bank of India: https://bankofindia.co.in/emi-calculator
EMI Calculator of Different Reputed Banks
Loan Charges
Customers always worried about the charges to be paid for availing a Housing Loan. The major amount of charges goes in Govt Fees.
On receipt of Home Loan application, the Bank carries certain formalities for which customer has to bear the charges. We have illustrated below about the charges:
Title Search Report of the Property whose papers to be deposited at the Bank. Bank does this to confirm some other person has already not availed loan against this property. It costs approximately Rs. 6,000.00
Valuation Report of the Property is taken to know the market value, distress value & Govt Value of the property to get an assessment of quantum of loan. It costs approximately Rs. 4000.00
Stamp-duty of 0.3% of the loan mount required during creation of mortgage after submission of papers (In Mumbai. It differs form state to state)
Registration of the charge with SRO costs 0.5% of the loan amount or Rs, 15, 100.00 (In Mumbai. It differs form state to state)
Proposal Processing charges costs 0.25 % of the sanctioned amount. In normal circumstances the Proposal Processing Charges are not taken beyond Rs. 20,000.00 (Differs from Bank to Bank)
For safety of the Flat/House, all customers are told to purchase insurance which is mandatory. Additional charges for Insurance after possession is handed over.
What are the approximate charges banks normal put on you while availing a loan?
Due Diligence
What additional questions a banker normally asks before availing a loan?
Due Diligence is the process to know a customer more before providing a loan to a customer. If your are an existing customer of the Bank since many years and you have been banking with KYC complied accounts, banks trust you and do not initiate due diligence process. If you are new to the bank, then the banker conducts due diligence before proceeding for sanction of the loan. The normal questions of due diligence are as mentioned below:
Verification of residence by making visit, obtaining family information, age, marital status, period of current stay at his residence & third party reference to confirm about the customer. Electricity bill of the residence is obtained to confirm owned or rented. If rented, rent agreement is generally requested by the bankers.
Verification of employment by making visit of office or place of business. Confirm the designation form HR and references. Collects ID Card/Appointment Letter in case of salaried employee and collects Business information such as Udham Aadhar/GST/Govt. Licenses to verify the establishment. Electricity Bill of the Business place is obtained to confirm the place of business is owned or rented. If rented, rent agreement is generally requested by the bankers.
Verification of Property - The other part of due-diligence remains with identification/verification of the house/flat to be purchased. The property details are normally verified with the public records available with sub-registrars. The property is visited and details of the property is recorded while processing.
Title Search Report - Eery Banker conducts its own Title Search through their empanelled advocate. The advocate conducts a detailed search on the property normally of last 30 years to confirm if any other charges are there so that the ownership can be claimed by some person.
Valuation Report - Every Bank conducts fresh valuation of the property before sanction of the loan. The valuation normally consists of Market Value, Govt Value and Distress Value of the property.
CERSAI Check - CERSAI play very important role in creating Bank's right/charge on the property of the customer. Since 2016, Govt has made CERSAI compulsory for all Banks so that claim can be recorded. Hence Banks carry our check of CERSAI website before processing
Income Tax Return (ITR) Verification: The most important criteria is to decide the eligibility is income. Hence Income has to be perfectly analysed before sanction. Hence Banks normally insist for ITR verification through the customer or through customer's Chartared Accountant.
IT Form 16 : Incase of salaried employee, Form 16 is normally mandatory. Customer has to submit form 16. However in some cases customers cannot submit form 16. In those cases, Banks take accommodation based on the genuinely of the justifications. THese are verified from income tax website.
CIBIL Report - CIBIL report is generated for each applicant. CIBIL score decides the loan rate of interest. We have already discussed in the earlier paragraphs explaining how the rate of interest is linked to CIBIL Score.
Number of Houses in the applicant's name: Customer is asked about the present loan is being taken for purchase of his First House/Second House/Third House or Fourth House.
The comprehensive report is prepared should contain necessary information such as personal data of self and family members, residential information, employment/ business information, confirmation from references and all other aspects as discussed above. The due diligence process plays a very important role.
What is the process of Sanction of Disbursement
Sanction & Disbursement
Time for sanction depends upon the quantum of the loan you are applying. If the amount is more then the approval lies with the higher controlling authority. Hence, the amount of the loan play a crucial loan for timeline of the loan sanction process. It also differs from Bank to Bank.
For Example:
If the loan amount is within Rs. 1 Crore, it may get sanctioned maximum within one weeks after all formalities are completed.
If the loan amount is 1 Crore to 5 Crore, it may get sanctioned maximum within one-two weeks after all formalities are completed.
If the loan amount is beyond 5 Core, it may cross two weeks to get the sanction.
After the loan is sanctioned, the Bank intimates you to come with the original documents to deposit at the Bank. You need to get NOC from the Society or the Builder to deposit the Title Deed for crating a mortgage. Mortgage means Bank creates right on your property. It provides the authority to the Bank to sell your property in case you do not repay the loan.
You have to visit the Bank with the Loan Documents, Demand from the Builder of Seller, Receipt of the payment which you have already paid to the builder/Seller, TDS Certificate for the TDS remitted towards selling of the property and Title Deeds to deposit the original title. You have to pay the necessary Charges to the Bank. You sign all necessary legal documents of the loan. Upon receipt of the Original Documents and Charges, Bank opens an account in your name. Then Bank makes disbursement of the loan as per the demand letter to the builder or the seller.
What is Overdraft Home Loan?
Overdraft system in Home Loan
In Overdraft ("OD" Home Loan, Bank will sanction a home loan in the form of overdraft limit. At the same time an EMI will also be fixed to make monthly payment. You need to pay the EMI every month as scheduled by the Bank. The amount you pay every month, that will be decreased from the overall limit.
For Ex. If bank has sanctioned Rs. 1 Cr Overdraft limit. The EMI is Rs. 75,000 every month. In the first month, when you pay EMI of Rs. 75,000, the limit left for utilisation will be Rs. 1 Cr - Rs. 75,000. The limit will be decreased month by month after each payment of EMI.
The best benefit of OD Home Loan is, the deduction of additional amount directly from principal portion of the Loan. For Example, If you have 2 lacs additional money kept with you. You can put in OD Home Loan Account. The interest will be charged less and you can use the 2 lac limit at any time you wish. On that way, less interest will be charged. The account will be traced as operative account means you can use it as normal savings or current account for doing transactions with cheque book, ATM Card and Internet Banking. This is one of the very nice and lucrative home loan product who have excess money with them to repay.
These schemes is known as different product names in different banks. Some of them we mention below:
In State Bank of India, this product is known as "SBI – Maxgain"
In Axis Bank, it is known as "Super Saver - Home Loan"
In Bank of India, it is know as "Smart Home Loan"
Vehicle Loan
We also understand how important for you to get a two-wheeler or a four-wheeler loan.
Family requirement changes from time to time. Once you and your partner went for a long drive or visited market, went together to in-law's house of each other in a two wheeler. Munna joined in your family. Joining Munna was Ok and it was manageable. After some time Tina also joined. Munna is now 5 years and Tina is now 1 year old. Two-Wheeler no more fits. You need a Car ("Four-Wheeler") but do not have much funds to purchase. At the same time you do not want to be cheated by any of the finance companies or banks by their high rate of interest or huge processing charges. We are here to get vehicle loan from a right bank of financial institution.
Trust Team LoanDrishti. We commit to fulfilling our promises and we will definite do it.
Business Loan
Business Loan is the thrust of business. Funds are required for running the business. Banks provide loan facility on EMI Basis and Cash Credit Basis. When a loan is availed on EMI basis it is called Term Loan facility and when a loan is availed on Cash Credit basis, it is called Cash Credit ("CC") facility.
Govt of India provides various interest subsidy to many loans. One of the example is PM Mudra Yojna. We know the various schemes of Mudra Yojna and contact on behalf of you. We will complete all the complex documentations for you.
We will provide all types of assistance to get a loan from a Bank to run your business. May it be small or big requirement, we have all types of expertise to reach our the Bank's and convince them your requirement on behalf of you.
Another advises including small or big finance we will help you to het through our partners.
We look forward to hearing from you.
