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11 Best Bank for Home Loan in India 2022

I have listed the best bank for a home loan in India after research.

But before moving to the list, let’s discuss – the Factors That You Should Consider Before Choosing the Best Bank for Home Loan in India

#1. Interest Rate

Interest rate is the most important factor for a home loan. That is because even a slight difference of 0.5% in the interest rate on lakhs of rupees can make a huge difference.

#2. Processing Fees

Your bank will charge a fixed amount or a percentage of the loan value as processing fees. The fee is just for processing your application and does not guarantee loan approval or disbursal.

Most of the time, home loan processing fees are non-refundable.

#3. Legal Fees

Some banks charge legal fees to verify the property documents.

#4. Pre-closure Charges

Some banks put a clause that you cannot pre-close your loan or that you have to pay an additional amount in the form of charges to pre-close the loan.

#5. Loan-To-Value (LTV) Ratio

LTV indicates the proportion of the property value that the bank is ready to finance. Your bank may finance anywhere between 75% to 90% of the property value.

#6. Part-Payment Rules

Many banks and housing finance companies (HFCs) put rigid rules for part payment so that they do not lose interest income. Banks may also put a clause limiting the amount or the percentage of the loan that can be prepaid.

#7. Insurance Cover

You can also buy an insurance cover for your home loan. Note, it’s optional, not mandatory to buy insurance.

Be careful if the bank insists you on buying insurance.

In nutshell, you need to consider the following points to find which bank is best for a home loan

  • Interest Rate
  • Processing Fees
  • Legal Fees
  • Pre-closure Charges
  • Loan-To-Value (LTV) Ratio
  • Part-Payment Rule
  • Insurance Cover

Best Bank for Home Loan in India 2022

#1. ICICI Bank Home Loan

icici home loan

ICICI is known for its simplified documentation process, speedy approvals and competitive interest rates. You can get loans for house purchase, house construction, home renovation as well as Top-up home loans.

ICICI offers home loans for properties up to Rs.5 Crores and up to 30 years loan tenure.

The interest is charged on a monthly reducing balance i.e. the principal is calculated at the end of every month and the interest charged accordingly. If you make a part-payment today, the interest outgo on your loan reduces starting from the 1st of next month.

ICICI gives a special reduction on the interest rate if the first applicant of the home loan is a woman.

You are allowed to make your non-working, female partner as a first applicant and avail lower interest rate.

ParametersLoan Details
Interest Rate6.90% – 11.60%
Processing Fees0.50% – 2% of the loan amount or
Rs. 1,500/- whichever is higher
(Rs. 2,000/- for Mumbai, Delhi & Bangalore)
Maximum Tenure30 years
Pre-payment ChargesNil for floating rate loans
2% for fixed-rate loans.
LTVup to 90%
Late-Payment Charges2% per month

Advantages

  • Can make a non-working female partner as a co-borrower and avail reduced interest rates.
  • Quick processing of loans
  • Door-step services are available at no extra cost.

Drawbacks

  • EMI once increased cannot be decreased even if you have made enough part-payments.

#2. State Bank of India Home Loan

sbi home loan

SBI has one of the most stringent property verification measures during the loan process. The benefit is – you are assured that the property papers are legitimate and chances are that you would face no legal hassles in the future.

The bank offers loans for house purchase, house construction, home renovation as well as Top-up home loans.

SBI offers only floating-rate loans and SBI Maxgain loans (home loan as an overdraft loan).

SBI home loan interest rates are usually at the lower range as compared to other lenders.

The interest is charged on a daily reducing balance i.e. the principal is recalculated at the end of every day and the interest charged accordingly. If you make a part-payment today, the interest outgo on your loan reduces starting from the very next day.

SBI MaxGain Home loan – where the drawing power on the overdraft gets reduced to the extent of the principal component of EMI.

ParametersLoan Details
Fixed Interest RateNone
Floating Interest Rate7.0% – 7.35%
MaxGain interest rate
(Overdraft Loan interest rate)
7.35% – 7.70%
Processing Fees0.35% of loan amount
Minimum – Rs. 2,000 and Maximum – Rs. 10,000
Maximum Tenure3 years to 30 years
Pre-closure ChargesNil
LTVUp to 90%
Part-Payment ChargesNil

Advantages

  • Stringent assessment of property
  • Transparent charges
  • Calculation of interest on the daily-reducing balance

Drawbacks

  • Slow approval process

#3. HDFC Ltd. Home Loan

hdfc home loan

HDFC is known for its stringent verification of property documents.

You can have door-step services for consultation with an HDFC loan expert or can easily apply online and upload the documents.

HDFC home loan interest rates are competitive and you can have loans for house purchase, plot purchase, house construction, home improvement, and home extension.

HDFC does not offer a fixed rate home loan. Instead, it offers a “TruFixed” Loan the interest rate is ‘Fixed’ for an initial 24 months.

It also offers Multiple types of repayment options to choose from:

A. Step Up Repayment Facility (SURF): SURF offers an option where the repayment schedule is linked to the expected growth in your income.

You can avail a higher amount of loan and pay lower EMIs in the initial years and increase the EMI after every few years as income increases.

B. Flexible Loan Installments Plan (FLIP): In FLIP, the loan is structured in such a way that the EMI is higher during the initial years and subsequently decreases in proportion to the income.

C. Tranche Based EMI: If you have purchased an under-construction property, instead of paying only the interest on the loan disbursed, you can actually start paying the full EMIs i.e. the EMI amount after you get the entire loan amount disbursed.

D. Accelerated Repayment Scheme: This option provides you with the flexibility to increase the EMIs every year in proportion to the increase in your income which will result in you repaying the loan much faster.

E. Telescopic Repayment Option: With this option, you get longer repayment tenure of up to 30 years. This means an enhanced loan amount eligibility and smaller EMIs.

TruFixed Interest Rate7.40% – 8.20%
Floating Interest Rate6.95% – 7.85%
Processing FeesUp to 0.50% of the loan amount or Rs. 3,000/- whichever is higher.
Maximum Tenure30 years
Pre-paymentNil for floating rate home loans
2% in case of fixed-rate or combination rate loan
LTV90% for loan value less than Rs. 20 lakhs
80% for loan value more than 20 lakhs
75% for loans above Rs. 75 lakhs
Charges for delayed payment of EMI24% per annum

Advantages

  • Very transparent charges
  • Multiple options to choose for loan repayment

Drawbacks

  • HDFC charges up to Rs. 2,000 for re-appraisal of loan

#4. Axis Bank Home Loan

axis bank home loan

You can get a home loan for amounts as small as Rs.3 lakhs from Axis bank. The loan is for the purchase of a constructed residences, construction of property, and top-up loans.

Axis bank offers floating and fixed interest rate home loans with a maximum tenure of up to 30 years.

For one of their home loan products – Fast Forward Home Loans, Axis bank offer up to 6-month EMI holiday on completion of 10 years loan tenure and another 6 months on completion of 15 years from the first disbursement, provided the repayment track record is clean.

Here, the EMI holiday means that you can stop paying EMIs for a few pre-determined months.

Fixed Interest Rate12% for all cases.
Floating Interest Rate6.90% – 8.90%
Processing FeesHigher of – 1% of the loan amount or Rs. 10,000
Maximum Tenure30 years
Pre-closure ChargesNil for floating rate loans and
2% for fixed-rate loans
LTV90% for loan value less than Rs. 30 lakhs
80% for loan value more than 30 lakhs to Rs. 75 lakhs
75% for loans above Rs. 75 lakhs.
Penal interest rate2% per month

Advantages

  • Loans as small as Rs.3 lakhs
  • Both fixed and floating rate home loans

Drawbacks

  • Charges for statement issue, repricing, document photocopy issue, document retrieval, interest certificate issue.

#5. Union Bank of India Home Loan

Union Bank of India - home loan

Union Bank offers loans for the purchase of the old and new residential units, purchase of plot & construction, and renovation, but not Top-up loans.

Fixed Interest RateUp to Rs. 30 lakhs – 11.40%
Rs. 30 to 50 lakh – 12.40%
Rs. 50 lakh to Rs. 2 Crore – 12.65%
Floating Interest RateHome Loan up to Rs. 30 lakh – 6.80% to 7.35%
Home Loan above Rs. 30 lakh – 6.90% to 7.40%
Processing Fees0.50% of the loan amount. Maximum of Rs. 15,000
Maximum Tenure30 years
Pre-closure ChargesNil for floating rate loans
Nil for a fixed-rate loan if repaid from own sources
2% – if the loan is being refinanced
LTV90% for loan value less than Rs. 30 lakhs
80% for loan value more than 30 lakhs to Rs. 75 lakhs
75% for loans above Rs. 75 lakhs.
Part-Payment ChargesNil

Advantages

  • Both fixed and floating rate home loans available
  • Low 6.8% starting home loan interest rate

Drawbacks

  • Top-up loans are not available
  • Fixed rate are for maximum of 5 years

#6. Indiabulls Housing Finance Home Loan

indiabulls home loan

Indiabulls offers loans for home purchase, house construction, home extension, and home renovation.

Indiabulls charges a 2% processing fee, which is on the higher side. But there are no other additional charges such as legal opinion charges and technical valuation charges.

The interest is calculated on a monthly reducing balance basis.

It offers a dual-rate loan called ‘Fixed and Floating Rate Loans’ in which the interest rate remains fixed for the initial 2 years of the loan.

They are one of the preferred lenders for people who want to buy properties with incomplete documentation or an unclear path of inheritance.

They have an innovative product called eHome Loans where the entire process of application, document submission, loan sanction, and loan disbursal is automated and online.

You can apply for the loan online, e-Upload the required documents and electronically sign the application form. The status of the loan application can be known online and the disbursal is directly made to the bank account.

This saves you the hassle of repeated visits to the branch for application and document submission.

Dual loan (Fixed and Floating) Interest Rate8.99% onwards
Variable Interest Rate9.25% to 10%
Processing FeesUp to 2% of the loan amount
Maximum Tenure30 years
Pre-closure ChargesNil for floating rate loans
For fixed-rate loans – 2% (during the fixed interest rate period)
LTV90% for loan value less than Rs. 30 lakhs
80% for loan value more than 30 lakhs to Rs. 75 lakhs
75% for loans above Rs. 75 lakhs.
Part-Payment Charges24% per annum

Advantages

  • eHome loan product for people who lack time for the loan formalities and branch visits.
  • Funds 90% of the property value if it is less than 30 lakhs.

Drawbacks

  • Slow processing of application and customer service not up to the mark.
  • Rs. 650 charges for database admin fee

#7. LIC Housing Finance Home Loan

lic home loan

LIC Housing Finance provides loans for house purchase, house construction, repairs, plot purchase, home extension as well as renovation.

Top-up loans are also available under certain conditions. You can choose a fixed or a floating rate loan with a tenure of up to 30 years. The interest is calculated on a monthly reducing basis.

Fixed Interest Rate10.05% to 10.15%
Floating Interest Rate6.90% – 7.90%
Processing FeesRs. 10,000 for loans up to 50 Lakhs
Rs. 15,000 for loans above Rs. 50 Lakhs
Maximum Tenure30 years
Pre payment ChargesNil
LTV90% for loan value less than Rs. 30 lakhs
80% for loan value more than 30 lakhs to Rs. 75 lakhs
75% for loans above Rs. 75 lakhs.
Late Payment Charges1.5% for default of up-to 12 months
2% for default beyond 12 months

Advantages

  • Lower fixed and floating interest rates.
  • No charges for prepayment.

Drawbacks

  • Slow processing and approval

#8. PNB Housing Finance Home Loan

pnb home loan

PNB Housing Finance provides a range of home loan products like Home Purchase Loans, Home Construction Loans, Home Extension Loans, Residential Plot Loan and Home Improvement Loans.

But does not provide top-up loans.

You can request for enhancement in your loan amount, in case of escalations in costs.

ParticularsLoan details
Floating Interest RateLoan amount up to Rs. 35 lakhs – 7.35% to 9.45%
Loam amount greater than Rs. 35 lakhs –  7.70% to 9.60%
Processing Fees1% of the loan amount. Minimum fees – Rs. 10,000
If the loan is approved then PNBHF keeps all the fee.
In case the loan is not approved then PNBHF retains Rs. 3,000 per property.
Maximum Tenure30 years
Pre-payment ChargesNil for floating rate loans
LTV90% for loan of less than Rs. 30 lakhs
80% for loans of more than 30 lakhs and up to Rs. 75 lakhs
75% for loans of value more than Rs. 75 lakhs
Late-Payment Charges2% per month

Advantages

  • In case you take a loan for house construction, you can request for enhancement of the loan if the cost of construction escalates.

Drawbacks

  • Slow processing of applications

#9. Bank of Baroda Home Loan

bank of baroda home loan

Bank of Baroda offers loans at very competitive interest rates. You can get loans for house purchase, buy plot, construction, improvement, top-up and renovation.

You can get a loan approved (pre-approved home loan) even before you finalize the property.

Home Loan Advantage is a product where you can park your savings in a savings account linked to the loan account. The entire amount in the savings account is treated as principal paid and interest outgo is reduced.

Fixed Interest RateNot offered
Floating Interest Rate6.85% – 8.70%
Processing FeesFor loan up to Rs. 50 lakhs
Processing fee- 0.50% of the loan amount. Minimum – Rs. 8,500 and Maximum – Rs. 15,000
For loan above Rs. 50 lakhs
Processing fee- 0.25% of the loan amount. Minimum – Rs. 8,500 and Maximum – Rs. 25,000
Maximum Tenure30 years
Pre-closure ChargesNil
LTV90% for loan of less than Rs. 30 lakhs
80% for loans of more than 30 lakhs and up to Rs. 75 lakhs
75% for loans of value more than Rs. 75 lakhs
Part-Payment ChargesNil

Advantages

  • You can enjoy a free credit card and concession of 0.25% for car loans. Bank of Baroda also offers free accident insurance with every home loan.
  • You can avail of loans as low as Rs.2 lakhs.

Drawbacks

  • Slow processing of applications.

#10. Aditya Birla Capital Home Loan

aditya birla home loan

Aditya Birla Capital offers loans for home purchase, plot & home construction, home construction, home extension, and home improvement but not top-up loans.

They are known for speedy processing of the loan application and lower interest rates.

They also offer doorstep services in case you are unable to visit the branch.

Fixed Interest RateNot offered
Floating Interest Rate9.0% -12.5%
Processing FeesUp to 1% of the loan amount
Maximum Tenure30 years
Pre-closure ChargesNil for floating rate loans
2% for fixed-rate loans
LTV90% for loan value less than Rs. 30 lakhs
80% for loan value between 30 lakhs – 75 lakhs
75% for a loan value above Rs. 75 lakhs.
Late-Payment Charges24% p.a.

Advantages

  • Doorstep services and low-interest rates

Drawbacks

  • Rs. 1,000 charges for pre-closure quote
  • High 4% loan cancellation charges

#11. Tata Capital Home Loan

Tata Capital

Tata Capital covers all the housing needs like a loan for a home, plot and ready to move in apartments. Apart from that, you can find loans for constructing a home, home extension even for house maintenance and repairs.

You can look for a home loan of Rs. 5 Lakhs to Rs. 5 Crores.

You can apply online by providing details and submitting a few documents like income proof. After verification, you get a spot conditional approval online.

Otherwise, you can even walk into a branch or can call them on the phone.

Fixed Interest RateN. A.
Floating Interest Rate6.90% to 12%
Processing Fees0.5% of the loan amount
Maximum Tenure30 years
Pre-closure ChargesNil in case of repayment from own funds
2% for others
LTV80% of the market value
Late-Payment Charges2% over the prevailing rate of interest

Advantages

  • Doorstep services and low-interest rates
  • Easy repayment through Flexi EMI option

Drawbacks

  • Account maintenance charges
  • Branches only in few cities

Tips for You When to go About Choosing a Home Loan

1. You can make a woman (either your wife or mother) as a co-borrower, and avail loan at a lesser interest rate.

2. If a property is already approved by a bank, it does not mean you won’t be charged legal fees or property verification fees.

Irrespective of the status of approval, every customer has to pay these fees if demanded by the bank. So, think before you avail loan from a lender who has already approved the project.

3. No matter how much loan-to-value the banks claim to finance, finally they will approve the amount you are eligible based on your income. The lower amount between the LTV of the property and your loan eligibility is approved.

4. If you have any existing loans such as personal loan, education loan or a car loan, then the amount of loan approved for your house purchase will be reduced.

5. A good CIBIL score above 800 gives you an extra edge to negotiate for lesser interest rates.

6. There is always a possibility of banks valuing the property at a lesser price than what the builder has quoted. At such times, trust the bank’s valuation and renegotiate with the builder.

7. Many home loan lenders promise lesser interest rates and fee waivers to transfer your loan balance to them.

It may not always be beneficial as the current lender might charge you a fee (which could be a percentage of your loan) to transfer the loan balance to another lender.

8. If you are looking to refinance your home loan to a lender offering lower interest rates, it will be beneficial if it is in the initial years of the loan tenure.

If you try to refinance during the last few years of the loan tenure, it will be a loss as the amount you save on the interest will be nullified by the amount you spend towards refinancing charges and processing fees.

9. Your bank will take away the original sale deed and documents immediately on registration of the property and store it with them till the home loan gets over.

Always check how and where your lender stores the property documents, and how long will it take to be retrieved after the loan is paid up. Losing your original sale documents is a big loss and may present legal challenges also.

10. Apart from the interest rates and processing charges, check about miscellaneous charges.

The charges can be document retrieval charges, valuation charges, documentation charges, additional statement charges, part payment charges, CIBIL Report charges, No Due Certificate/ NOC charges and Conversion charges.

11. After you close the loan, it is the duty of the lender bank or financial institution to update your CIBIL. Ensure that the lender informs CIBIL about the closure of the home loan on time. If your lender fails to do so, your CIBIL score might get affected.

Final Words

Now that you know about the best home loan lenders and some good tips to choose a bank, it does not mean that every loan product is suitable for you.

Depending on your loan requirement, repayment capacity and cash flow, you should choose a home loan suitable for you.

Your lender should clearly mention the costs that are going to be covered by the loan. Lenders usually do not finance registration and stamp duty costs, annual maintenance charges (in case of apartments) and clubhouse charges.

So, it’s important to choose a lender who will finance the amount you need and has hassle-free loan approval and repayment options.

About Pardeep Goyal

I talk about saving & investing money. You would love my articles related to Credit Cards, Travel, Shopping, Tax Saving. I share transparently how I am making passive income from multiple sources online.

46 thoughts on “11 Best Bank for Home Loan in India 2022”

  1. Really useful article on home loan. No bank will inform or guide us like how you have informed / guided us. Really appreciate your efforts for the same.

    Reply
  2. Hello Pardeep,
    I have a ongoing home loan at corporation bank (now union bank), the interest rate they charging is 7.50%, and took loan in Oct. 2018. Thinking of transferring to either LIC or Bank of Baroda. I think the re-verification of documents and valuation in all will cost me between 15-20k. The property is MHADA row house in Mumbai. Do you suggest I should opt for transfer ? And would it be to LIC or Bank of Baroda or any other finance institution you would like to suggest.

    Reply
    • First, you should negotiate with your current bank for a lower interest rate. Based on your relationship, past repayment and credit history the bank may or may not reduce interest rates.
      If you still want to go ahead with a Home loan transfer, then account for the following –
      1. Sub 7% home loans are available with SBI, HDFC, LIC, ICICI, Kotak, Canara Bank.
      2. The loan should be in good standing without any default in repayment for the past 1 year. For processing, the new bank will also require your home loan account statement. The new lender/Bank will require your original loan documents and KYC papers when sanctioned.
      3. There will be charges like processing fees, application, inspection fees etc. Look for hidden charges – you need to check at new lender before transfer.
      Finally, check your present credit score before the transfer, because the new bank will decide interest rate based on your latest credit score.

      Reply
  3. V. Good Info Mr. Pradeep Goyal, Nice Presentation Meaning full article. I or We wish if any of the Above mentioned Bank’s Staff or Team would have been at least 1% Honest and Transparent in helping the customers to TRANSPARENCY AND MINIMUM DETAILED Awareness, that should have given FANTASTIC Result TO the Banking Companies in term of their GROWTH AND REPUTATION. IT’S Very sad that in-spite of so many BANKING COMPANIES HAVING EXCLUSIVE HOUSING LOAN SECTION Still they fail to Handle their customer and ultimately we land on google and take help from YOU Like Experts, Its a pity to the banking industry. I Thanq once Again for the RELEVANT INFO ON HOUSING LOANS. Regards. NFZ.

    Reply
  4. I want to take home loan sir….which bank is better in all banks with all parameters interest rate processing charges and documentation and quick process
    Pls suggest me

    Reply
  5. Hi Sir, I am looking for Site and home Loan either in LIC HOUSING FINANCE or Axis Bank as suggested by the Layout plot Seller.
    Which one is suitable for me to avail income Tax deductions from my Salary for home loan. Who has the least interest rates? Is Availing Composite Loan better than home Loan alone? I want to avoid loan Insurance and pre closure charges.

    Reply
  6. Hello Sir,
    I’m a businessman. Will be applying for home loan along with my female business partner. Should I opt for SBI or HDFC?
    Thanks in advance.

    Reply
  7. Hi Sir,
    For this year after 2020 budget went online. Which bank you would suggest for getting a home loan. How about LIC. I read in the news that LIC’s 10% is getting sold to private. What is your idea?

    2Q. I have a doubt which is a better option to repay the loan.
    for eg If i get 10 lakhs as a loan and I need to repay 20K for 12 months and other is pay 30K for 10months (just an example I may be wrong) Please guide me which is better to repay at the high amount and less month or ?

    Reply
  8. Hi Pardeep, thanks for the valuable information. Apart from Base price of the flat and car parking, what else can be covered within home loan, specifically from SBI and ICICI bank perspective. Thanks

    Reply
  9. Hi

    There is one HDB financial services a unit of hdfc bank ltd offering home loan around 8 %
    Can you please differentiate bw the the two as which one is better ( hdfc bank or hdb )

    Reply
  10. sir,i am govt.servant and i am looking for home loan with very low interest,i am from Aizawl.(mizoram)N.E India, can you recommend which bank will be prefer able in all aspects.

    please suggedt

    Reply
  11. Dear Sir – My Builder is recommending Andhra Bank and I’m not sure whether to accept it or not. I thought of HDFC but builder is convincing me for Andhra Bank. Do you recommend anything for me on this case ?

    Reply
    • Srinivasan.. ask builder why Andhra is better than HDFC? You should compare the details of both banks. I don’t have any idea about Andhra Bank, however, HDFC has transparent charges.

      Reply
      • Very slow in reduction of the Floating rates but are very quick in raising the interest rates whenever the RBI lowers or raises. Compared to SBI even after collection of certain amount for reduction of interest rates, there will be difference of 0.4% on EMI

        Reply
  12. Sir
    Iam looking for home loan, can u recommend which bank to be prefered. My venture has tie up with SBi, Hdfc ,ICICI& Aditya birla

    Pls suggest

    Reply
  13. Presently HDFC home loan interest is 8.25, whereas nationalised banks viz. Uco bank, Bank of India home loan int. Is 8.05 and 8.10 respectively. whether it is advisable to take loan from UCO bank or Bank of India

    Reply
  14. Hdfc or ICICI which one best for home loan, I have icici account 10 years maintaing the same but my cousin suggested me to go for Hdfc bank loan bcz the intrest rate for hdfc home loan is 8.75 but on ICICI is 9.05 which bank I should choose kindly help me out and ur suggestions

    Reply

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