What is Home Loan?
Home loans are given to individuals who are interested in buying/constructing houses. It is supported by banks or financial institutions who loan a certain amount, based on the need of the individual(s). Loans can be applied for purchase, construction or improvement of homes.
Characteristic of Home Loan
- The asset i.e. your home/property is pledged as security collateral. In case of failure of payment of the loan on a timely basis, the bank/lender would be entitled to retrieve the asset.
- The loan amount varies, with minimum amount being Rs 2,00,000/-
- The repayment time period, which ranges upto 30 years, is fixed based on the amount taken as loan and includes the outstanding principal plus the interest costs.
- The principal amount and the interest together constitute the EMI (Equated Monthly Installment) of the loan.
- The loan charges include registration charge, fee for processing, prepayment penalty, commitment charge and miscellaneous charges for documentation & consultation.
Types of Home Loan
There is a home loan for every requirement, take a look:
- Home Purchase Loans
- Land Purchase Loans
- Home Construction Loans
- Home Improvement Loans
- Home Conversion Loans
- Home Extension Loans
- Bridge Loans
Documents Required for Home Loan
- Duly signed and filled application form
- Passport-size photograph
- Statements of investments, if any
- Copy of plan approved for the proposed construction/extension
- Cost estimation or valuation report from the bank's (or finance company's) panel CA
- Allotment letter of housing board/NOC of the society/builder etc.
- Bank statement and salary slips
In addition to these, you will have to also submit the following documents:
Identity and signature proof -
Passport, Pan card, Driving License, Voter ID card, Aadhar card, employee identity card in case of government employees.
Address Proof - Bank statement, Rent Agreement, Voter ID card, Ration card, Passport, Driving License, telephone/electricity/water/credit card bill or Property tax.
Age Proof - Voter ID card, Secondary school leaving certificate (class 10), birth certificate, Passport, Aadhar Card, pension payment order or receipt of LIC policy.