Home loan is a loan disbursed by a bank or financial institution (lender) to an individual specifically for buying a residential property. Here, the lender holds the title of property until the loan is paid back in full along with interest.
What is the tenure of a home loan?
Home loans are long term borrowing instruments with a minimum tenure of 5 years and a maximum tenure of 30 years.
What is the Eligibility Criteria for a Home Loan?
Anyone — whether self-employed or salaried individuals/professionals — with a regular source of income can apply for home loans. One must be at least 21 years old when the loan period begins and should not exceed an age of 65 years when the loan ends or at the time of superannuation. This is the generic home loan eligibility criteria and specifics such as the minimum and maximum age limits, minimum income level, etc. may differ from one lender to another.
Can I apply for a joint loan with my friend?
No. A lender would only allow you to apply for a joint home loan if the application is co-signed by one or more members of your immediate family. Thus, your friend does not qualify.
Who can be joint borrowers in case of a home loan?
Immediate family members such as your parents, spouse and children are allowed to be joint borrowers in case of a home loan.
What is the maximum number of joint borrowers for a home loan?
The maximum number of joint borrowers in case of a home loan is fixed at 6. However, only family members such as parents, siblings and spouse can be co-borrowers for a home loan in India. Additionally, having a co-borrower who has a robust credit history and good credit score is preferable as compared to one with a low credit score.
What is floating rate home loan?
If the interest rate on the loan varies periodically over the loan tenure, then it is called a floating rate home loan. Lenders have their own base rate which determines the rate of interest charged on a home loan. The base rates of banks are revised from time to time based on RBI directives as well as other factors, which leads to an increase or decrease in the EMI amount payable.
What is a fixed rate home loan?
Fixed rate home loans are offered at a predetermined interest rate during the loan period and these remain unchanged during the loan period irrespective of market conditions. This can be a huge benefit when market volatility starts affecting interest rates. For instance, if the RBI increases interest rates on loans, then people with fixed rate home loan will not be affected by any increase or decrease in the market interest rates and the EMI amount will remain unchanged. This type of home loan is less popular these days.