All banks provide loan against properties at different interest rates. One of the top nationalised banks, SBI charges interest rate of 8.35 percent to 8.65 percent for general customers. The interest rates are irrespective of the loan amount. Note: If you take loan in the name of a female member, all banks offer slightly reduced interest rates.

Banks and housing finance companies do offer home loan at lucrative interest rates combined with offers and incentives. If you are unable to make up your mind while choosing a bank for taking home loan, here are some of the best financial institutes granting home loan in India –

• ICICI Bank
• HDFC Limited
• SBI
• Yes Bank
• Axis Bank
• PNB Housing
• DHFL
• Indiabulls

Here are some key factors that you must consider before applying:

• Make sure your credit score is good. Higher the score, the better.
• Check if you can afford to pay monthly EMIs from your current income.
• Research all the loan options available before finalizing an offer.
• Choose a repayment tenure that’s convenient for you. Shorter tenure means higher EMI, and vice versa.
• Know the prepayment terms of the loan and the charges applicable.
• Ask the lender for all the additional charges that may apply to the loan.
• Lastly, read all the documents carefully before signing.

Lenders use your Credit score as an indicator of how likely you are to repay the loan. The higher the score, the lower the interest rate you pay on your loan.

Score below 600: A score below 600 generally indicates high risk. With such a score, it may be a little tough to secure a loan. If your score is below 600, it’s best if you try to improve the score before applying for a home loan.

Score between 600 and 749: Although it’s not considered a very good score but it gives you at least a chance to get the loan approved. Some lenders might approve your loan with this score after considering your income, your employment/business, etc.

Score of 750 and above: If your score is 750 or above, you are most likely to get your loan approved. Not only that, you are also most likely to secure the loan at an attractive rate of interest.

Launched in 2015, Pradhan Mantri Awas Yojana (PMAY) is a Government of India’s initiative that aims to provide affordable housing for certain sections of the society. The scheme targets construction of about 20 million houses at an affordable price by 31 March 2022.

Here are some of the key objectives of this scheme:

• To promote affordable housing for the weaker sections of the society.
• To construct affordable houses in partnership with the public and private sectors.
• To rehabilitate slums with the help of private developers.
• To provide subsidies for beneficiary-led individual house construction.

Here are some of the important features and benefits of home loan:

Flexibility to choose a tenure: Most banks give you the flexibility to choose your home loan tenure, which generally ranges from 15 – 30 years. The tenure you choose directly impacts the EMI you pay every month.

Comparatively cheaper than personal loans: The rate of interest on home loans is generally lower in comparison to the personal loans. This is because home loans are generally secured loans whereas personal loans are unsecured loans.

Tax benefits: You get tax benefits on both the interest amount and principal amount you pay. The interest paid can be claimed for a deduction of upto Rs 2 lakhs every year, whereas the principal amount paid can be claimed for a deduction of upto Rs 1.5 lakhs per year.

Home loan balance transfer: This facility allows you to transfer your outstanding loan amount from one lender to another for the purpose of taking advantage of lower interest rates.