Inexpensive Home loans available in India

Inexpensive Home loans available in India:

The home loans in India are becoming cheaper day by day, as the repo rate in India is falling day by day. Thus the interest rates on fixed deposit goes on decreasing on the other hand the loan taken the borrower has to pay lower interest rates as there is a continuous slide in interest rates. The interest rates of most of the public sector banks are found to be cheapest compared to others.

Due to the effect of covid-19 there is an extreme slack market for the real estate in India. As a result the Indian government has kept the repo rate at just 4% so as to lower the interest rates of lending. This has helped the banks reduce the floating interest rates. The real estate companies has also reduced the rates of the houses so as to reduce the unsold inventories and recover the cost of the investment. All these factors make this a customer friendly buying policies.

So if the borrower has necessary margin money, a stable income and adequate contingency savings, you be able to buy the property into the markets at lower interest rates and at a lower cost. Another thing homeowners need to consider is credit score which has become more relevant than ever before. Thus the repo rate linked interest rates introduced by banks typically linked to credit linked margin. Meaning the lowest possible interest rates are usually reserved eligible applicants who have stellar credit scored of 750-800. The rates for applicants with lower credit scores of low and poor could be around 100 basis points. As if you are a home loan buyer you should ensure good or excellent credit score so as to get the benefit of lower interest rates on EMI.

Thus there are 15 banks been identified as lowest interest rates providers from whom applicants can buy loans from. The actual interest rates being charged by the bank would depend on the age of the applicant, location where the applicant has opted for property, duration of service remaining of the applicant, CIBIL ratings of the applicant, gender, loan amount, lender opted for the finance of the housing project, fluctuation in the interest rates of the market lending charged by the bank. Also note that the bank may increase the repo rate thus leading to higher interest rates of the bank to be charged to the customer.

Thus the following are the interest rates of the banks being charged by Indians:

Bank Name

Interest rates of the banks

Kotak Mahindra bank


Union bank of India


Punjab national bank


Hdfc bank


State of India


Central Bank


Bank of boroda


UCO Bank


Punjab and sindh bank


Icici bank


Bank of maharashtra


Axis bank


Canara Bank


IDBI bank


Bank of India



Hence it can be found out that the interest rates are mostly based in the range of 6.75%-8.00% charged by the bank. However the current floating interest rates are chargeable at 7% per annum. Because of the current low interest climate, it is an excellent opportunity for home buyers to achieve their dream of owning their house. Prospective buyers should know the interest rates and should be aware of the bank loans are benchmarked to the repo rate, which any adjustment under key policy rate will lead to rapid relative rate of interest. Homebuyers must, though make sure that they have satisfactory income to keep their debt load under balance and pay off loan on or before the deadline. Borrowers should keep in mind that the best home loan interest rates are normally reserved for borrowers with the excellent credit ratings with a minimum of 750. If your credit score is low, you can strive to strengthen it before considering the home loan. Please consider that you would consider only the floating interest rate of banks. Also based on the lender the interest rate may vary.


Thus we can conclude that the while applying for the home loan the borrower should do thorough check of the home loans interest rates applicable. There are some banks who charge more attractive interest rates as compared to their competitors. Also the interest rates of the bank varies as per the amount of loan taken, CIBIL ratings should be good or average then the interest charged is lesser. The duration for which the loan is taken should be less in order to save on interest credit.