Home Loan

Home loans in India: how they work

A home loan lets you pay for a house or flat over a long period – often up to 20–30 years, depending on the lender and your age – while the property stays mortgaged to the lender. You pay part of the price yourself (the down payment, or “own contribution”) and the lender funds the rest after checking both your income and the property’s legal title and value.

Early Grow does not lend money. We help you work out a realistic loan amount, compare home loan offers from partner banks and housing finance companies, and manage the paperwork until the lender sanctions and disburses the loan.

Types of home loan

• Home purchase loan – to buy a ready or under-construction flat or house.
• Plot + construction loan – to buy a residential plot and build on it; construction funds are usually released in stages.
• Home construction loan – to build on a plot you already own.
• Home improvement or extension loan – to renovate, repair or add space to your existing home.
• Home loan balance transfer – to move an existing home loan to another lender, sometimes with a top-up amount.

Who can apply?

Each lender sets its own criteria, but they usually look at:

• Age and remaining working years – these limit the maximum tenure.
• Income stability – salaried applicants show salary slips and Form 16; self-employed applicants show ITRs and business financials.
• Credit history – your credit score and repayment record influence approval and the rate offered.
• Existing EMIs – lenders cap the share of income that can go towards all EMIs combined.
• The property – it must have clear title and approvals and pass the lender’s legal and technical checks.

Adding an earning co-applicant, such as a spouse, can increase eligibility.

Documents usually required

• KYC – PAN, Aadhaar or passport, and address proof.
• Income – salary slips, Form 16 and bank statements (salaried), or ITRs, financial statements and bank statements (self-employed).
• Property – sale agreement or allotment letter, title chain, approved plan and builder or society documents, as applicable.
• Existing loans – loan statements, if you have other EMIs or are transferring a home loan.

Lenders may ask for more documents depending on your profile and the property.

How Early Grow helps

1. Free consultation – we discuss the property, your budget and your income.
2. Eligibility check – we estimate the loan amount and EMI you can realistically support. You can also try the EMI calculator on this page.
3. Lender shortlist – we compare suitable offers from partner lenders on rate type, fees, tenure and conditions.
4. Application and documents – we help you prepare a complete file and submit it to the chosen lender.
5. Verification and sanction – the lender runs credit, legal and technical checks and decides on the sanction. We follow up and explain the sanction terms.
6. Disbursal – the lender pays the seller or builder, in full or in stages, after the agreement and property documents are completed.

Costs and terms to check before you sign

• Interest rate type – most home loans in India are floating-rate and linked to a benchmark rate, so the EMI or tenure can change when the benchmark moves.
• Processing fee and other charges – for example legal, technical and documentation charges.
• Prepayment – RBI rules do not allow banks and NBFCs to charge a foreclosure or prepayment penalty on floating-rate term loans taken by individuals for non-business purposes. For fixed-rate loans and other cases, the charge depends on your loan agreement.
• Insurance – property or loan-protection insurance is optional unless your loan agreement requires it. Compare it before accepting a bundled policy.
• Tax benefits – deductions for home loan principal and interest depend on the tax regime you choose and the current income-tax law. Check the rules on the Income Tax Department portal or ask a tax adviser.

Read our guide to home loan mistakes to avoid before you apply.

Affordable housing

If you are a first-time buyer from a lower- or middle-income household, government schemes such as Pradhan Mantri Awas Yojana – Urban may apply. Eligibility is set by the scheme.

हिंदी में: अर्ली सुलभ होम लोन – निम्न और मध्यम आय वर्ग के लिए किफायती होम लोन