What is Home Loan:

A home loan is a financial product offered by banks and housing finance companies, allowing individuals to purchase homes or plots by borrowing funds. Leading banks like SBI, HDFC, and ICICI offer competitive home loan interest rates, making homeownership more accessible. Let’s find the factors you should consider when selecting a home loan and how to find the lowest home loan interest rate.

Key Factors to Consider When Choosing a Home Loan

When selecting a home loan, it’s crucial to compare the following aspects:

Interest Rates:

Home loan interest rates vary across banks. For instance, SBI home loan interest rates range from 8.50% to 9.65%, while HDFC home loan interest rates range from 8.75% to 9.95%. Always compare rates across different lenders, such as ICICI home loan and BOB home loan interest rates, to secure the lowest home loan rate.

Processing Fees:

Banks charge processing fees to cover administrative costs. SBI home loan charges 1% of the loan amount, while HDFC Ltd charges up to 1.50%. Some lenders like LIC Housing Finance offer lower fees, around 0.25%.

Tenure:

Most banks, including HDFC, SBI, and ICICI, offer flexible tenures ranging from 5 to 30 years. Choosing a longer tenure can reduce your EMI burden but may increase the total interest paid.

Home Loan Interest Rates Across Banks

Here’s a quick comparison of home loan interest rates offered by leading banks and housing finance companies:

Bank	Interest Rate	Processing Fee	Tenure	Eligibility	Minimum Age	Maximum Age
SBI	8.50% to 9.65%	1% of loan (Min Rs. 1000 + GST, Max Rs. 10,000 + GST)	Up to 30 years	Indian Resident, NRI	18 years	70 years
BOB	8.40% to 10.60%	Up to 0.50%	Up to 30 years	Indian Resident, NRI, PIOs, OCI	21 years (Applicant) 18 years (Co-applicant)	70 years
Axis Bank	8.75% to 9.10%	Up to 1%	Up to 30 years	Indian Resident, NRI	21 years	65 years
Kotak Mahindra Bank	8.75% to 9.00%	Up to 1%	Up to 25 years	Indian Resident, NRI	18 years (Salaried) 18 years (Self-employed)	60 years (Salaried) 65 years (Self-employed)
HDFC Bank	8.75% to 9.95%	Up to 1.50%	Up to 30 years	Indian Resident, NRI	18 years	75 years
Union Bank of India	8.35% to 9.10%	Up to 0.50%	Up to 30 years	Indian Resident, NRI	18 years	75 years
LIC Housing Finance	8.50% p.a. onwards	0.25% of loan amount	Up to 30 years	Indian Resident, NRI	Not specified	Not specified
Bank of India	8.40% p.a.	0.25% of loan amount (Min Rs. 2500, Max Rs. 20,000)	Up to 30 years	Indian Resident, NRI	Not specified	Not specified
IDBI Bank	8.45% p.a.	0.50%	Up to 30 years	Indian Resident, NRIs, PIOs	22 years	70 years or retirement age (whichever is earlier)
ICICI Bank	8.75% to 10.05%	0.50% to 2%	Up to 30 years	Indian Resident	20 years	70 years

SBI (State Bank of India) – High Trust

• Pros: Competitive interest rates (8.50% to 9.65%), capped processing fees (1% of loan amount, Min Rs. 1000, Max Rs. 10,000 + GST), long tenure (up to 30 years), reducing EMI burden.
• Cons: Interest rates can go up to 9.65%, processing fees are higher compared to some other banks.

Website: SBI

BOB (Bank of Baroda) – High Trust

• Pros: Low starting interest rate (8.40%), affordable processing fee (up to 0.50%), flexible loan tenure (up to 30 years).
• Cons: Upper limit of interest rates (10.60%) can be steep, limited transparency in processing fee calculations.

Website: BOB

Axis Bank – Moderate to High Trust

• Pros: Moderate and stable interest rate range (8.75% to 9.10%), long tenure (up to 30 years) for EMI flexibility.
• Cons: Processing fee can be relatively high (up to 1%), no lower interest rate options compared to banks like BOB or Union.

Website: Axis Bank

Kotak Mahindra Bank – High Trust

• Pros: Fixed range of interest rates (8.75% to 9.00%) with no steep fluctuations, moderate processing fee (up to 1%).
• Cons: Shorter tenure (up to 25 years) compared to other banks offering 30 years, which may lead to higher EMIs, limited interest rate flexibility.

Website: Kotak Mahindra Bank

HDFC Bank – Very High Trust

• Pros: Flexible tenure of up to 30 years, wide range of loan options with support from one of India’s largest financial institutions.
• Cons: Processing fee can go up to 1.50%, which is higher than most other lenders, higher upper range of interest rates, reaching up to 9.95%.

Website: HDFC bank

Union Bank of India – High Trust

• Pros: One of the lowest starting interest rates (8.35%), affordable processing fee (up to 0.50%), long tenure of up to 30 years.
• Cons: Interest rates can vary based on applicant profile, limited promotional schemes or special offers compared to larger banks.

Website: Union Bank

LIC Housing Finance – Moderate Trust

• Pros: Low processing fee (0.25% of loan amount), competitive starting interest rate (8.50%), long repayment tenure (up to 30 years).
• Cons: Interest rates can increase beyond 8.50%, limited banking features compared to traditional banks.

Website: LIC Housing Finance

Bank of India – High Trust

• Pros: Low interest rate (8.40% p.a.), capped and affordable processing fee (0.25% of loan amount, Min Rs. 2500, Max Rs. 20,000), long tenure (up to 30 years).
• Cons: Interest rate is fixed at 8.40%, limiting flexibility, processing fees can be higher for larger loan amounts.

Website: Bank of India

IDBI Bank – Moderate Trust

• Pros: Competitive fixed interest rate (8.45%), moderate processing fee (up to 0.50%), long repayment tenure (up to 30 years).
• Cons: No variation in interest rates, processing fee can be higher compared to lenders like LIC Housing Finance.

Website: IDBI Bank

ICICI Bank – Very High Trust

• Pros: Flexible loan tenure of up to 30 years, wide interest rate range (8.75% to 10.05%) to suit different financial profiles.
• Cons: Upper limit of interest rates (up to 10.05%) is on the higher side, processing fee can go up to 2%, making upfront costs potentially high.

Website: ICICI Bank

Whether you’re purchasing your first home from a real estate company or expanding your property portfolio, securing the right home loan is crucial. A well-chosen home loan allows buyers to enter the real estate market with manageable interest rates and flexible tenures, making homeownership more accessible. By comparing options from leading banks like SBI, HDFC, and ICICI, you can find a loan that suits your real estate investment needs.