Punjab National Bank and SBI have recently waived off processing fees on home loans. SBI has decided not to charge processing fees till 31 August and Punjab National Bank till 30 September.
In such a situation, if you are planning to take a home loan, then before that know which bank is giving the loan at which interest rate. Apart from this, keep in mind how much processing fee he is charging.
Kotak Mahindra Bank is offering the cheapest home loan
Kotak Mahindra Bank is offering the cheapest home loan. Its interest rate is 6.65%. At the same time, the home loan interest rate of LIC Housing Finance Limited starts from 6.66%. At present, many banks are offering home loans at an interest rate of less than 7%.
| Bank | Interest Rate (in %) | processing fee |
| Kotak Mahindra Bank | 6.65 | maximum 10 thousand rupees |
| LIC Housing Finance Ltd. | 6.66 | 10 to 15 thousand rupees |
| ICICI | 6.70 | 0.25% and up to a maximum of 5 thousand |
| SBI | 6.70 | sorry till 31st august |
| Punjab National Bank | 6.80 | sorry till 30 september |
Understand here how much interest and installment will have to be paid for taking loan from Kotak Mahindra, LIC and SBI
| Loan Amount (in Rs.) | Period | Interest Rate (in %) | Installment (EMI) | Total Interest (in Rs.) |
| 10 lakh | 20 years | 6.65 | 7,544 | 8.11 lakh |
| 10 lakh | 20 years | 6.66 | 7,550 | 8.12 lakh |
| 10 lakh | 20 years | 6.70 | 7,574 | 8.18 lakh |
| 10 lakh | 20 years | 6.80 | 7,633 | 8.32 lakh |
Keep these 4 things in mind while taking a home loan
Apply for a lower amount A
low loan-to-value (LTV) ratio can make it easier for you to get a loan. This means that you have to keep your contribution more to buy a house. Choosing a lower LTV ratio increases the buyer’s contribution to the property. This reduces the risk of the bank. This will increase your chances of getting a loan. Usually the bank gives loans up to 75-90% of the value of the property. In this case, the remaining amount has to be paid by the borrower as down payment or margin contribution. Without this you will not get the loan.
Keep in mind the Fixed Obligation to Income Ratio
When we apply for a loan in the bank, the bank also sees the Fixed Obligation to Income Ratio (FOIR). This shows how much installment of the loan you can pay every month. The FOIR shows what percentage of your existing EMIs, house rent, insurance policy and other payments are your current income. If the loan provider takes all these expenses up to 50% of your salary, then he can reject your loan application. That is why keep in mind that the loan amount should not exceed this.
Be sure to know about the pre-payment penalty.
Many banks levy a penalty on prepayment of the loan. In such a situation, take full details about this from the banks, because on premature repayment of the loan, the banks get less interest as expected. In such a situation, some term and conditions are imposed on their behalf. Therefore, while taking a home loan, get complete information about it.
Take a loan from the relevant bank
If you are thinking of taking a home loan, then take it from the same bank where you have an account, or from where you are taking the service of fixed deposit or credit card, as the bank provides its regular customers with ease. And provide loan at reasonable interest rate.
