Home Loan of Rs. 20 Lakhs

Interest Rates

Most lenders provide home loans to loan applicants at floating interest rates. Although a few lenders do offer home loans at fixed interest rates, they usually levy higher interest rates for it. Some banks/HFCs also offer home loans at mixed or hybrid interest rates. Under this interest rate regime, the rates usually remain fixed for first 2 to 3 years of the loan tenure, after which the lender charges floating interest rates from the home loan borrower. Note that existing home loan borrowers availing home loans at higher interest rates can transfer their existing home loans to other lenders through the balance transfer facility at lower interest rates.

Comparison Table of Interest Rates offered for Rs. 20 Lakh Home Loan

Name of Lender	Up to Rs. 30 Lakh	Above Rs. 30 Lakh to Rs. 75 Lakh	Above Rs. 75 Lakh
SBI	8.05% - 9.05%	8.05% - 8.95%	8.05% - 8.95%
HDFC	8.10% - 9.50%	8.35% - 9.75%	8.45% - 9.85%
LIC Housing Finance	8.00% - 9.50%	8.00% - 9.70%	8.00% - 9.90%
ICICI Bank	8.10% - 9.00%	8.10% - 9.00%	8.10% - 9.10%
Kotak Mahindra Bank	7.99% onwards	7.99% onwards	7.99% onwards
PNB Housing Finance	7.99% - 12.50%	7.99% - 12.50%	8.10% - 11.20%
Punjab National Bank	7.95% - 9.35%	7.90% - 9.05%	7.90% - 9.00%
Bank of Baroda	7.95% - 9.45%	7.95% - 9.45%	7.95% - 9.70%
Union Bank of India	7.75% - 9.65%	7.75% - 9.85%	7.75% - 9.85%
IDFC First Bank	7.95% onwards	7.95% onwards	7.95% onwards
L&T Housing Finance	7.70% - 8.70%	7.70% - 8.70%	7.70% - 8.70%
Bajaj Housing Finance	7.70% onwards	7.70% onwards	7.70% onwards
Godrej Housing Finance	7.99% - 10.99%	7.99% - 10.99%	7.99% - 10.99%
Tata Capital	8.10% onwards	8.10% onwards	8.10% onwards
Federal Bank	9.05% - 9.10%	7.77% - 9.15%	7.77% - 9.20%

Rs. 20 Lakh Home Loan EMIs for 10 Year Tenure

Lender’s Name	Interest Rate (% p.a.)	EMI
SBI	8.05 – 9.05	Rs. 24,318 – Rs. 25,389
HDFC	8.10 – 9.50	Rs. 24,371 – Rs. 25,880
ICICI Bank	8.10 – 9.00	Rs. 24,371 – Rs. 25,335
Bank of Baroda	7.95 – 9.45	Rs. 24,213 – Rs. 25,825
Union Bank of India	7.90 – 9.65	Rs. 24,160 – Rs. 26,044

Rs. 20 Lakh Home Loan EMIs for 20 Year Tenure

Lender’s Name	Interest Rate (% p.a.)	EMI
SBI	8.05 – 9.05	Rs. 16,791 – Rs. 18,059
HDFC	8.10 – 9.50	Rs. 16,853 – Rs. 18,643
ICICI Bank	8.10 – 9.00	Rs. 16,853 – Rs. 17,995
Bank of Baroda	7.95 – 9.45	Rs. 16,667 – Rs. 18,577
Union Bank of India	7.90 – 9.65	Rs. 16,605 – Rs. 18,839

Rs. 20 Lakh Home Loan EMIs for 30 Year Tenure

Lender’s Name	Interest Rate (% p.a.)	EMI
SBI	8.05 – 9.05	Rs. 14,745 – Rs. 16,164
HDFC	8.10 – 9.50	Rs. 14,815 – Rs. 16,817
ICICI Bank	8.10 – 9.00	Rs. 14,815 – Rs. 16,092
Bank of Baroda	7.95 – 9.45	Rs. 14,606 – Rs. 16,744
Union Bank of India	7.90 – 9.65	Rs. 14,536 – Rs. 17,036

Factors to consider while availing Home Loans of Rs. 20 Lakhs

Loan-to-Value Ratio

The LTV Ratio for home loans is the overall percentage of a property’s value that a bank or HFC can finance through its loan. The home loan applicant has to arrange the remaining amount from his own fund sources through down payment or margin contribution. Note that RBI has restricted the LTV ratio for home loans of Rs. 20 lakh at 90%. However, the lender has the discretion to decide the final LTV ratio for a home loan applicant based on factors like his credit profile, credit score, repayment capacity, the property’s market value, etc. Note that some lenders provide lower interest rates for home loan applicants opting for lower LTV ratios.

Loan Tenure

Most lenders offer home loans with repayment tenures of up to 30 years. Banks and HFCs usually ascertain the repayment capacity of a home loan applicant while finalising their loan tenure. Home loan lenders usually require loan applicants to confine their total EMI payment, which includes the EMIs of both their ongoing loans and the proposed home loan, to be within 50-60% of their total net monthly income. Thus, prospective home loan borrowers should select a loan tenure that limits their total EMIs, including that of the proposed home loan, to within 50-60% of their monthly income and improve their chances of home loan approval. Home loan applicants can make use of the Paisabazaar home loan EMI calculator to determine their optimum home loan tenures and EMIs based on their repayment capacity.

Credit Score

Lenders usually consider credit scores of 750 and above as ‘good’ and home loan applicants with such credit scores stand a better chance of getting home loan approval. Many home loan lenders have also begun to offer preferential interest rates for loan applicants having good credit scores. Therefore, it is important for prospective home loan borrowers to review their credit reports before applying for a home loan. Doing so will allow applicants having lower credit scores to initiate corrective measures to enhance their scores. Once their credit scores show an improvement their chances of getting a home loan approval increases proportionately.

Home loan applicants with low or no credit scores can also avail Paisabazaar Step UP Credit Card to steadily improve their credit scores and increase their chances of getting home loan approval.

Processing Fees

Home loan processing fees is a one-time charge that most lenders levy for processing loan applications of prospective home loan borrowers. The processing fees is usually up to 2% of total loan amount, with some lenders levying a higher tariff on home loan borrowers. Lenders also provide partial or complete waiver of processing fees on home loans during festive seasons or on other important occasions

Prepayment Charges

RBI has directed banks, non-banking financial companies (NBFCs) and HFCs not to levy prepayment fees on floating rate home loans. However, lenders are free to decide if they want to charge prepayment feed or waive it off completely on home loans with fixed interest rates.

Eligibility Criteria for availing Rs. 20 Lakh Home Loan

Although the eligibility criteria for availing home loans may differ from one lender to another, some of the main conditions required for loan applicants applying for a home loan are as follows:

• Lenders consider resident Indians eligible for availing home loans with some of them also offering home loans to NRIs.
• Lenders usually offer home loans for loan applicants, whether applying for fresh home loans and opting for balance transfer, who are 18 years and older. However, they also usually require home loan borrowers to repay their loans before they reach 70 years.
• Lenders offer Rs. 20 lakh home loans both to salaried and self-employed individuals.
• Home loan applicants having credit scores of 750 and above are more likely to avail home loans. Many banks and HFCs also provide home loans at preferential interest rates to loan applicants with higher credit scores
• Existing home loan borrowers can also enhance their home loan eligibility with help of methods like adding earning family members as co-borrower(s) or by opting for longer loan tenures.

Lenders might also give weightage to additional factors a loan applicant’s monthly income, existing EMIs (if any) from other debt obligations, work experience (for salaried) and business continuity (for business owners), liabilities, assets, age of the property, etc. while ascertaining their eligibility for availing home loan.

Documents Required

Most lenders require loan applicants availing home loans to submit multiple documents. Some of the main documents required while applying for home loans are as follows:

• Duly filled application form
• Identity proof
• Age proof
• Income proof (both for salaried and self-employed)
• Proof of employment/business
• Address proof
• Property documents
• Estimated cost of property

Note that this list of documents required for availing home loans is non-exhaustive as lenders may ask for additional documents based on their requirements and the loan applicant’s profile.

EMI Calculator for Rs. 20 Lakh Home Loan