Description
A home loan is an amount of money that an individual borrows from a bank or money lending company at a certain home loan interest to be paid with the EMI every month. The property is taken as a security by the money lending company for the Home Loan.
A home loan is a secured loan that requires the borrower to keep collateral with the lender. However, the collateral in case of the home loan is the home itself for which the loan is borrowed. In case a person fails to repay the home loan on time, the lender has the right to acquire the property.
The most popular type of home loan is the loan for purchase of a new or a pre-owned home. This loan is also commonly available and is offered by many banks in different variants. The interest rate is either floating or fixed and generally ranges anywhere between 9.85% and 11.25%.
| Home loan | |
|---|---|
| Purpose | Only for construction of a new house or purchase of a ready-to-move-in property |
| Loan to value ratio | A loan can be availed for up to 90% of the property’s market value |
| Interest rate | Low compared to mortgage loans |
| Processing fee | Typically between 0.8% to 1.2% of the loan value |
What is the Minimum Salary for a Home Loan? Your salary should be above Rs. 15,000 per month to qualify for a home loan. However, it may vary from profession to profession.
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