How to Apply for a Home Loan in India
In this guide
Step-by-step Process
Check Eligibility and Loan Amount
Banks lend 75%–90% of the property value (LTV ratio). Eligibility depends on net monthly income, age (repayment must complete before 60–70), CIBIL score (700+), and existing liabilities. Use the bank's home loan eligibility calculator online.
Compare Interest Rates (Fixed vs Floating)
Home loan rates currently range from 8.5%–10% p.a. Floating rates (linked to RBI repo rate via EBLR) are cheaper long-term but variable. Fixed rates offer certainty. Also check processing fees (0.25%–1%) and prepayment charges.
Check PM Awas Yojana Subsidy
Under PMAY, eligible first-time homebuyers in EWS, LIG, and MIG categories can get an interest subsidy of up to ₹2.67 lakh credited upfront to their loan account. Check eligibility at pmaymis.gov.in before applying.
Submit Application and Documents
Apply online or at the bank branch. Submit KYC documents, income proof (salary slips, ITR), and property documents (sale agreement, NOC from builder, approved plan).
Property Legal & Technical Verification
Bank appoints a legal team to verify property title (clear title, no encumbrances) and a technical team to assess property value. This takes 1–2 weeks. Cooperate with the bank's panel advocates and valuers.
Sanction Letter, Agreement & Disbursal
Upon approval, you receive a sanction letter specifying amount, rate, and tenure. Sign the loan agreement and mortgage deed. Disbursal is made directly to the seller/builder bank account — in one shot or tranches for under-construction property.
Documents Required
- ✓Aadhaar card and PAN card
- ✓Last 3 months salary slips or 2 years ITR (self-employed)
- ✓Last 6 months bank statements
- ✓Property sale agreement / allotment letter
- ✓Approved building plan and NOC from builder / housing society
- ✓Form 16 (salaried employees)
Official Government Portals
Common Questions
What is the maximum home loan tenure?
Most banks offer tenures up to 30 years, subject to full repayment before the borrower turns 70 (salaried) or 65 (self-employed). Longer tenure reduces EMI but increases total interest paid.
Is home loan interest tax deductible?
Yes, under the old tax regime: Section 24(b) allows up to ₹2 lakh/year deduction on interest for self-occupied property. Section 80C allows ₹1.5 lakh deduction on principal repayment. These deductions are not available under the new tax regime.
Can I transfer my home loan to another bank?
Yes — this is called a balance transfer. The new bank pays off your existing loan and you repay at the lower rate. Per RBI rules, floating-rate loans have no foreclosure penalty. Best done in the early years of the loan tenure.
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