Purchasing a home is not a financial decision; it is an emotional milestone. Both buying an apartment (the first one and any other) or a villa or a flat to invest in can be very expensive. That is when a Home Loan comes in as your financial passageway to homeownership. We make it easy at Gullak to guide you on what needs to be done with clear, helpful, and honest tips.
How about we decipher everything about home loans in India, from eligibility, interest rates, and intelligent repayment strategies?
What is a Home Loan?
Home Loan is a secured advance taken by a bank or any financial organization to assist you in purchasing, building as well and refurbishing a residential house. You pay it back over time, which is usually in EMIs (Equated Monthly Installments) that have both principal and interest.
Types of properties you can fund:
- Ready-to-move-in flats or houses
- Under-construction properties
- Land purchase & construction
- Renovation or extension of an existing house
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Why Take a Home Loan?
Home loans offer several advantages that make them a smart way to own a house without depleting your savings:
- Affordable Interest Rates (starting from 8.35% p.a.)
- Long Repayment Tenure (up to 30 years)
- Tax Benefits under Section 80C & 24(b)
- High Loan Amounts (₹5 lakhs to ₹10+ crores)
- Build Equity in a valuable asset.
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Types of Home Loans in India
1. Home Purchase Loan
For buying a new or pre-owned residential property.
2. Home Construction Loan
To fund the construction of a house on a plot you already own.
3. Home Renovation Loan
To upgrade, repair, or improve your existing home.
4. Plot Loan / Land Purchase Loan
To buy a piece of land for future home construction.
5. Home Loan Balance Transfer
Switch your existing loan to a new lender for a lower interest rate.
6. Top-Up Loan
Additional funds on top of your existing home loan for personal needs or renovation.
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Home Loan Interest Rates in 2025
Here’s a quick comparison of leading banks and NBFCs offering home loans:
| Lender | Interest Rate (p.a.) | Processing Fee |
| SBI Home Loan | From 8.40% | Up to 0.40% |
| HDFC Ltd | From 8.50% | Up to ₹3,000 + taxes |
| ICICI Bank | From 8.75% | 0.5% to 1% |
| Axis Bank | From 8.60% | Up to ₹10,000 |
| LIC Housing | From 8.55% | 0.25% – 0.50% |
| PNB Housing | From 8.90% | 0.5% of the loan amount |
Interest rates vary based on your credit score, income, location, and loan amount.
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Home Loan EMI Calculator
Want to know how much your monthly EMI will be?
Use Gullak’s Home Loan EMI Calculator:
EMI Formula:
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CopyEdit
EMI = [P x R x (1+R)^N] / [(1+R)^N – 1]
Where:
- P = Loan Amount
- R = Monthly Interest Rate
- N = Tenure in months
📌 Example:
- Loan = ₹50,00,000
- Interest = 8.5% p.a.
- Tenure = 20 years
➡️ EMI ≈ ₹43,391/month
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Home Loan Eligibility Criteria
Lenders evaluate multiple factors before approving your loan:
- Age: 21–65 years (till end of tenure)
- Income: Minimum ₹25,000/month (varies by city)
- Employment: Salaried, self-employed, or business owners
- Credit Score: 700+ preferred
- Co-applicant: Spouse or parent can help increase eligibility
Pro Tip: Add a co-applicant with income to increase your eligible loan amount.
Documents Required for Home Loans
For Salaried Individuals:
- Aadhaar, PAN
- Salary slips (last 3–6 months)
- Form 16 / Income Tax Returns
- Bank statements (last 6 months)
- Property papers & builder agreement
For Self-Employed:
- Business registration documents
- ITRs for the last 2–3 years
- Profit & loss statement
- CA audited financials
Home Loan Tax Benefits
Home loans offer dual tax advantages, helping you save money every year.
- Section 80C – Deduction up to ₹1.5 lakh on principal repayment.
- Section 24(b) – Deduction up to ₹2 lakh on interest paid.
- Joint Loan Benefit – Both applicants can claim deductions individually.
That’s a total potential savings of ₹3.5+ lakhs per year!
Tips to Get a Home Loan Approved Easily
- Maintain a good credit score (700+)
- Ensure steady and documented income.
- Avoid multiple applications (hurts your credit profile)
- Clear existing debts or loans
- Choose a co-applicant for added strength
Home Loan vs Renting: What’s Better?
| Parameter | Buying with a Home Loan | Renting |
| Ownership | Yes | No |
| Monthly Cost | EMI (builds equity) | Rent (no return) |
| Tax Benefits | Yes | No |
| Flexibility | Less | More |
| Wealth Creation | Yes (property value) | No |
Verdict: Renting may be cheaper short-term, but owning builds wealth in the long run.
Home Loan Balance Transfer: Save Lakhs
Already have a home loan? Switch to a better deal with Balance Transfer:
- Lower your interest rate (e.g., from 9.5% to 8.5%)
- Reduce your EMI or tenure.
- Consolidate with top-up funds.
Note: Always compare total costs — including processing fees, legal charges, and foreclosure terms.
Government Schemes for First-Time Homebuyers
The Indian government offers schemes to make housing more affordable:
1. PMAY (Pradhan Mantri Awas Yojana)
- Subsidy up to ₹2.67 lakh on interest
- For EWS, LIG, and MIG households
- Available for new home purchases
2. CLSS (Credit Linked Subsidy Scheme)
- Offers interest subsidy based on income group
- Encourages home ownership for the urban poor and middle class
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Smart Home Loan Tips from Gullak
- Use EMI calculators to plan before borrowing
- Always compare interest rates from multiple banks.
- Choose shorter tenures to reduce overall interest.
- Pay EMIs on time — defaulting hits your credit.
- Prepay when possible — many banks allow partial prepayment without charges
Final Thoughts: Home Loans are Long-Term Relationships
A house loan cannot be called a loan alone; it is a process of fifteen to thirty years. It is a commitment that cannot be performed mindlessly and should be planned and disciplined.
We make your home loan process simpler, cheaper, and safer at Gullak. Be it purchasing your dream apartment or refurbishing your ancestral house, we can offer you resources, materials, and objective advice so that you get it right.
Explore More Financial Tools on Gullak
- SIPs – Systematic Investment Plans
- Personal Loans
- Mutual Funds
- SWPs – Systematic Withdrawal Plans
- Stocks & Equity
Gullak is your financial buddy — helping you save smart, borrow smart, and live smart.
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