11 Best Bank for Home Loan in India 2023

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 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 2023

#1. ICICI Bank 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.10 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 1^st 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.

Parameters	Loan Details
Interest Rate	9.65% – 10.05%
Processing Fees	0.50% – 2% of the loan amount or Rs. 3,000/- whichever is higher
Maximum Tenure	30 years
Pre-payment Charges	Nil for floating rate loans 2% for fixed-rate loans.
LTV	up to 90%
Late-Payment Charges	2% 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 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.

Parameters	Loan Details
Fixed Interest Rate	None
Floating Interest Rate	9.15% – 9.65%
MaxGain interest rate (Overdraft Loan interest rate)	9.55% – 10.05%
Processing Fees	0.35% of loan amount Minimum – Rs. 2,000 and Maximum – Rs. 10,000
Maximum Tenure	3 years to 30 years
Pre-closure Charges	Nil
LTV	Up to 90%
Part-Payment Charges	Nil

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 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.

Floating Interest Rate	8.70% – 9.85%
Processing Fees	0.50% of the loan amount
Maximum Tenure	30 years
Pre-payment	Nil for floating rate home loans 2% in case of fixed-rate or combination rate loan
LTV	90% for loan value less than Rs. 30 lakhs 80% for loan value 30 -75 lakhs 75% for loans above Rs. 75 lakhs
Charges for delayed payment of EMI	24% 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

You can get a home loan for amounts as small as Rs. 1 lakhs (Asha Home Loan) from Axis bank. For small home borrowers with a combined family income of Rs. 8000 p.m.

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 offers 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 Rate	14% for all cases.
Floating Interest Rate	8.75% – 9.15%
Processing Fees	Higher of – 1% of the loan amount or Rs. 10,000
Maximum Tenure	30 years
Pre-closure Charges	Nil for floating rate loans and 2% for fixed-rate loans
LTV	90% 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 rate	2% per month

Advantages

• Loans as small as Rs. 1 lakh
• 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 offers loans for the purchase of old and new residential units, purchase of plot & construction, and renovation, but not Top-up loans.

Fixed Interest Rate	Up to Rs. 30 lakhs – 11.40% Rs. 30 to 50 lakh – 12.40% Rs. 50 lakh to Rs. 2 Crore – 12.65%
Floating Interest Rate	Home Loan up to Rs. 30 lakh – 8.60% to 10.25% Home Loan above Rs. 30 lakh – 8.60% to 10.45%
Processing Fees	0.50% of the loan amount. Maximum of Rs. 15,000
Maximum Tenure	30 years
Pre-closure Charges	Nil for floating rate loans Nil for a fixed-rate loan if repaid from own sources 2% – if the loan is being refinanced
LTV	90% for loan value less than Rs. 30 lakhs 80% for loan value more than 30 lakhs
Part-Payment Charges	Nil

Advantages

• Both fixed and floating rate home loans available
• Low 8.60% 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 offers loans for home purchase, house construction, home extension, and home renovation.

Indiabulls charges a processing fee upward of 0.50%. Can go up to 2% which is on the higher side.

Rs. 2,500 additional charges include legal opinion charges, search 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 Rate	1% to 2.5% over the variable interest rate
Variable Interest Rate	8.80% to 11%
Processing Fees	upwards of 0.5% of the loan amount
Maximum Tenure	30 years
Pre-closure Charges	Nil for floating rate loans For fixed-rate loans – 2% (during the fixed interest rate period)
LTV	90% 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 Charges	24% 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 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 Rate	10.05% to 10.15%
Floating Interest Rate	6.90% – 7.90%
Processing Fees	Rs. 10,000 for loans up to 50 Lakhs Rs. 15,000 for loans above Rs. 50 Lakhs
Maximum Tenure	30 years
Pre payment Charges	Nil
LTV	90% 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 Charges	1.5% 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 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.

Particulars	Loan details
Floating Interest Rate	Loan amount up to Rs. 35 lakhs – 7.35% to 9.45% Loam amount greater than Rs. 35 lakhs –  7.70% to 9.60%
Processing Fees	1% 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 Tenure	30 years
Pre-payment Charges	Nil for floating rate loans
LTV	90% 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 Charges	2% 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 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 Rate	Not offered
Floating Interest Rate	6.85% – 8.70%
Processing Fees	For 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 Tenure	30 years
Pre-closure Charges	Nil
LTV	90% 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 Charges	Nil

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 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 Rate	Not offered
Floating Interest Rate	9.0% -12.5%
Processing Fees	Up to 1% of the loan amount
Maximum Tenure	30 years
Pre-closure Charges	Nil for floating rate loans 2% for fixed-rate loans
LTV	90% 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 Charges	24% 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 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 Rate	N. A.
Floating Interest Rate	6.90% to 12%
Processing Fees	0.5% of the loan amount
Maximum Tenure	30 years
Pre-closure Charges	Nil in case of repayment from own funds 2% for others
LTV	80% of the market value
Late-Payment Charges	2% 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.