BASIC TEAM
6 mins read
Last updated on 11th April 2024
Are you looking for the best home loan provider in India? Then, you must compare the interest rates of the top banks for home loans in India and pick the one that offers easy home loans with the maximum benefits. This is because the loan tenures are generally for around 20-30 years, and you would not want to get stuck with a home loan scheme that feels burdensome after a few years.
List of Top 10 Banks for Home Loans in India
- UCO Bank
- Bank of India
- Union Bank of India
- State Bank of India
- Bank of Baroda
- Kotak Mahindra Bank
- Karnataka Bank
- Central Bank of India
- Axis Bank
- Karur Vysya Bank
Here is India’s top home loan bank list of 2024 for you to compare and make an informed decision before opting for a bank loan for a house purchase.
| Bank | Interest Rate | Processing Fee | Loan Amount | Loan Tenure |
| UCO Bank | 8.75% p.a. onwards | 0.5% of loan amount min. Rs. 1500 and max. Rs. 15,000 | Up to 90% of the property’s cost | Max. 30 years |
| Bank of India | 8.45% p.a. onwards | Up to 0.25% for individuals (Min. Rs. 1,500; Max. Rs. 20,000) | Up to Rs. 5 crore | Max. of 30 years |
| Union Bank of India | 8.70% p.a. onwards | 0.50% of the loan amount | Up to 90% of the cost of property | Max. 30 years |
| State Bank of India | 8.75% p.a. onwards | 0.35% - 1% of the loan amount | Up to 90% of the cost of property | Max. 30 years |
| Bank of Baroda | 8.60% per annum onwards | Up to 0.50% (Min. Rs. 8,500; Max. Rs. 25,000) | Up to Rs. 20 crores | Max. 30 years |
| Kotak Mahindra Bank | 8.75% onwards | 0.5% - 1% | Up to 90% of the cost of property | Up to 20 years |
| Karnataka Bank | 8.75% onwards | 0.50%-2% | Up to 7.50 crores | Max. 30 years |
| HDFC | 8.50% p.a. onwards | Up to 0.5% of the loan amount or Rs. 3,000 (whichever is higher) | Up to 90% of the cost of property | Max. 30 years |
| Axis Bank | 9.00% p.a. onwards | Up to 1% or min. Rs. 10,000 | Up to 5 crores | 30 years (Floater) and 20 years (Fixed) |
| Karur Vysya Bank | 8.95% per annum | Up to Rs. 7,500 + GST | As per the current market value of the property | Up to 25 years |
*Please check for the interest rates.
1. UCO Bank
The UCO Bank, which is considered to be one of the best home loan banks in India, offers a starting interest rate of 8.75% p.a. while the processing fee for the loan is 0.5% of the loan amount. The bank offers house loans through two schemes - UCO Home and UCO Pre-Approved Home Loan.
2. Bank of India
The Bank of India home loan offers an interest rate starting at 8.45% p.a. while the loan processing fee is 0.25% for individuals. The maximum loan amount you can avail with Bank of India is INR 5 crores and tenure can be up to 30 years.
Suggested read: Bank of India home loan
3. Union Bank of India
In the case of Union Bank of India Home Loan, the starting interest rate is 8.70% p.a. onwards and the processing fee is 0.50% of the loan amount. The maximum loan tenure with this bank is 30 years and its EMIs are pegged at INR 805 per lakh.
Suggested read: Union Bank of India Home Loan
4. State Bank of India
The State Bank of India, which is regarded as the best bank for housing loans in India, offers an interest rate on home loans starting at 9.15% p.a. with a processing fee ranging between 0.35% and 1% of the total loan amount. The loan tenure offered by the bank is 30 years. It also claims to levy no hidden charges besides offering a full waiver on prepayment charges.
Suggested read: SBI Bank Home Loan
5. Bank of Baroda
The Bank of Baroda Home Loan interest rate starts at 9.15% p.a. with a processing fee of up to 0.50%. The bank offers loans up to 10 crores with the tenure being up to 30 years. One of the top features of the Bank of Baroda is that you can choose a top-up loan up to five times during the loan tenure.
Suggested read: Bank of Baroda Home Loan
6. Kotak Mahindra Bank
Kotak Mahindra Bank, which regularly finds its name in the top home loan bank list in India, offers a loan interest rate starting at 8.75% while its processing fee is 2% of the loan amount. The maximum loan tenure with this bank is 20 years, with pre-closure and part payment fee charges being NIL.
Suggested read: Kotak Mahindra Bank Home Loan
7. Karnataka Bank
The Karnataka Bank’s starting interest rate is 8.75% with its processing fee being between 0.50% and 2%. The maximum tenure the bank allows is 30 years. The three loan schemes of the bank are KBL Apna Ghar, KBL Home Comfort, and KBL Ghar Niveshan.
8. Central Bank of India
The starting loan interest rate of the Central Bank of India is 8.35% p.a. and the one-time processing fee is up to 50%. The maximum loan tenure offered by the bank is 30 years. It offers loans for renovation, repairs, purchase of plots, and alteration of existing houses.
9. Axis Bank
Axis Bank, which is considered the best home loan bank in India apart from public banks, offers interest rates starting at 9.00% p.a. on floating rate and 14% on fixed rates. The maximum tenure of the loan can be extended up to 30 years with this bank in case of floating-rate loans, and 20 years for fixed-rate loans.
Suggested read: Axis Bank Home Loan
10, Karur Vysya Bank
The starting interest rate offered by Karur Vysya Bank is 6.50% p.a. and the processing fee is 1% of the loan amount or INR 10,000, whichever is higher. The maximum loan tenure you extended with this bank is 25 years.
Suggested read: Karur Vysya Bank Home Loan
Define the Types of Home Loans by Bank
Banks typically offer a variety of home loan types to cater to different needs and preferences of borrowers. Here are some common types of home loans provided by banks:
- Standard Home Loans: These are the most common loans for buying or constructing a residential property, featuring either fixed or variable interest rates.
- Home Construction Loans: Specifically designed for individuals who want to build their own house rather than purchasing a pre-built one. Payments are typically disbursed in stages based on construction progress.
- Home Improvement Loans: Aimed at financing home renovations, repairs, or improvements. These can be for structural or aesthetic upgrades to a property.
- Home Conversion Loans: For those who have financed their existing home with a loan but wish to move and buy another property. This loan helps borrowers fund the purchase of the new house by transferring the current loan to the new house.
- Land Purchase Loans: Used for buying residential land where a borrower plans to build a house later.
- Bridge Loans: Short-term loans for people who are selling their current home and buying another. It helps finance the new house until the previous one is sold.
- Balance Transfer Loans: Allows borrowers to transfer their home loan from one bank to another, usually to take advantage of lower interest rates.
- NRI Home Loans: Specialized loans tailored for Non-Resident Indians (NRIs) looking to buy property in India. These loans come with specific eligibility criteria focusing on the financial and residential status of the NRI.
Each of these loans has specific conditions and benefits, and the suitability depends on the borrower's needs, financial situation, and long-term objectives.
Benefits of Taking a Home Loan from a Bank
Taking a home loan from a bank can come with several benefits that make it a popular choice for many aspiring homeowners. Here are some of the key advantages:
- Lower Interest Rates: Generally, banks can offer relatively lower interest rates on home loans compared to non-banking financial companies (NBFCs). This is due to the different funding sources banks have, which often allow them to lend at more competitive rates.
- Tax Benefits: One of the most significant advantages of taking a home loan from a bank is the availability of tax deductions. Under the Income Tax Act in India, borrowers can claim deductions on both the principal repayment (Section 80C) and the interest paid (Section 24) on a home loan, which can substantially reduce your tax liability.
- Flexible Loan Terms: Banks usually offer a variety of loan terms, including the length of the loan and repayment options, which can be tailored to fit your financial situation. This flexibility can help make the loan more manageable according to your budget and cash flow.
- Additional Services: Banks often provide additional services along with home loans, such as bank accounts, credit cards, and insurance products. Bundling these services can be convenient and may also come with discounts or promotional offers.
- Regulatory Security: Banks in India are strictly regulated by the Reserve Bank of India (RBI), which can provide an added layer of security for borrowers. This means that practices related to lending and customer service are monitored, and there are clear procedures for addressing grievances.
- Balance Transfer Options: If you find a better interest rate or better service terms with another lender, it's generally easier to transfer your home loan balance transfer from one bank to another. This flexibility can be a significant advantage in maintaining your financial flexibility and minimizing costs over the life
of the loan. - High Credibility: Banks are often perceived as more credible and stable financial institutions. This reputation can provide peace of mind to borrowers that their lender is reliable and will be around for the long term, especially important for a commitment as significant as a home loan.
- Pre-Approval Advantage: Many banks offer pre-approved home loans to existing customers, which can speed up the buying process and give you a better idea of your budget when house hunting. This can be a significant advantage in competitive real estate markets.
Choosing to take a home loan from a bank can, therefore, not only help in purchasing your dream home but also provide financial benefits and flexibility throughout the life of the loan.
FAQs About Top Banks for Home Loans in India
There are public and private banks and housing finance companies (HFCs) that offer home loans. Each of these offers loan amounts at different interest rates and for different tenures. To choose the best bank for a house loan, you are required to compare them on various parameters and pick one as per your preference.
As per the RBI guidelines, you cannot get a 100% home loan from a bank or financial institution.
Be it public/private banks or HFCs, all offer affordable house loans to the loan seekers, who fulfill the eligibility criteria. In addition, those looking for further discounts on their home loan interest rates can get subsidies through Pradhan Mantri Awas Yojna Scheme, only if they meet the criteria.
Choosing the best type of home loan depends on the need of the loan seeker. Some prefer variable home loan interest rates while some go for fixed home loan interest rates.
The formula to calculate the total interest cost on your home loan is (principal x rate) divided by time = interest or (P X R) / T = I.
Each bank has its own home loan eligibility check. You can go to their websites to get more clarity on the criteria. However, some of the basic requirements are a stable income, a decent credit score, and loan repayment ability.
To apply for a home loan, you need to fill up the loan application form of the bank that you have chosen to take the house loan from.
By comparing various interest rates, eligibility criteria, processing fees, and other parameters of different banks and financial institutions.
Published on 26th July 2023
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