Housing finance companies (HFCs) are a specialized type of Non-Banking Financial Companies (NBFCs). They offer loans and funding to help borrowers buy, construct, repair, or upgrade residential houses. HFCs must be registered under the Companies Act. They are supervised and regulated by the Reserve Bank of India (RBI). Make sure you check a housing finance company’s registration details before proceeding to avoid confusion and challenges in the future. The best housing finance company can help you get the most competitive interest rates, long repayment tenures, and high Loan-to-Value (LTV) ratios.
Housing Finance Companies (HFCs) offer home loans to buy, build, or repair residential properties. They provide quick approvals, customized loan amounts, and flexible eligibility criteria.
Buying a home is a major financial decision, and choosing the right lender can make the journey much easier. Housing Finance Companies (HFCs) are specialized financial institutions that offer loans for buying, constructing, or renovating a home.
There are several reasons why you should choose an HFC, such as:
Flexible loan options for different housing needs
Competitive interest rates to make borrowing more affordable
Convenient application processes with faster approvals
Flexible repayment options to suit your budget
With several HFCs available in India, it helps to compare your options before choosing one. This article explores some leading HFCs in India and what they offer to home loan borrowers.
What is a housing finance company?
Housing Finance Companies, or HFCs, are entities that are governed by the Companies Act 1956. These entities were initially regulated by the National Housing Bank (NHB). However, the regulatory power was later shifted to the RBI in 2019.
Initially, they were introduced to address the increasing housing loan demands by extending credit facilities to a diverse range of income groups. However, today these corporates have become a significant source of home loans.
As of now, HFCs have managed to surpass banks in terms of loan disbursement volume. This is mostly due to their flexible lending practices. Today, increased popularity and growth in demand have led to the operation of more than 25 home loan companies in India.
List of the best housing finance companies in India
Looking to finance your dream home? The following table summarizes the interest rates and loan tenures offered by the top housing finance companies in India.
Housing finance company
Interest rate
Maximum tenure
Bajaj Housing Finance
From 7.25% p.a.
Up to 30 years
LIC Housing Finance
From 7.15% p.a.
Up to 30 years
PNB Housing Finance
From 7.50% p.a.
Up to 30 years
Tata Capital Housing Finance
From 7.75% p.a.
Up to 30 years
Sundaram Home Finance
From 10.65% p.a.
Up to 25 years
Godrej Housing Finance
From 7.65% p.a.
Up to 30 years
Which HFCs in India are allowed to accept public deposits (with COR + permission)?
The following HFCs currently have a Certificate of Registration (CoR) with permission to accept public deposits.
Can Fin Homes Limited – Promoted by Canara Bank, it offers home loans, loans against property, and other housing finance solutions to salaried and self-employed borrowers.
Cent Bank Home Finance Limited – It is a Central Bank of India subsidiary, providing home loans and housing finance products, particularly supporting affordable housing and individual homebuyers.
ICICI Home Finance Company Limited – It is an ICICI Group company offering home loans, loans against property, and other financing solutions for individuals and small businesses.
LIC Housing Finance Limited – As one of India’s leading HFCs, it offers home loans, loans against property, and housing finance solutions across different customer segments.
Manipal Housing Finance Syndicate Limited – The housing finance company offers home loans and related financing solutions. Individual borrowers with residential property requirements are eligible.
Which HFCs are allowed to accept only approved public deposits (Prior NHB permission required)?
GIC Housing Finance Limited – A subsidiary of GIC, it provides a wide range of housing loan solutions across India.
Ind Bank Housing Limited – Promoted by Indian Bank, it caters to affordable housing needs with a focus on salaried and self-employed individuals.
National Trust Housing Finance Limited – Based in Chennai, it provides housing finance to lower and middle-income groups.
REPCO Home Finance Limited – A government-promoted company offering loans primarily in South India, known for quick approvals and flexible repayment options.
Saral Home Finance Limited (Formerly Vishwakriya Housing Finance Limited) – Rebranded to expand reach, it focuses on financial inclusion by offering simple, transparent housing loan products to underserved communities.
Which HFCs are not eligible to accept public deposits?
Many HFCs don’t have permission to accept public deposits. Some of these companies are mentioned below:
Bajaj Housing Finance – It is a leading HFC offering home loans and loans against property to salaried, self-employed, and other eligible borrowers.
Home First Finance – It focuses on affordable housing finance and primarily helps first-time and lower-income homebuyers purchase residential properties.
Aadhar Housing Finance – It specializes in housing finance for underserved and low-to-middle-income customers, particularly those with informal or modest incomes.
Aditya Birla Housing Finance – It provides home loans, loans against property, and other secured finance solutions to individual and business customers.
India Shelter Finance – It focuses on affordable housing finance for self-employed and salaried customers, especially in semi-urban and emerging markets.
What are the top housing finance companies in India?
Here are some of the top housing finance companies in India known for their reliability, customer service, and competitive home loan offerings.
LIC Housing Finance
LIC Housing Finance, an associate of Life Insurance Corporation of India, offers home loan schemes tailored for salaried, self-employed, and pensioners with competitive interest rates.
Feature
Details
Interest Rate
8.25% onwards
Loan Amount (LTV)
Up to 90% of the property value
Tenure
Up to 30 years
Processing Charges
Flat Rs. 3,000
PNB Housing Finance
PNB Housing Finance offers attractive home loan solutions with quick approvals, flexible repayment options, and a strong presence across urban and semi-urban India.
Feature
Details
Interest Rate
8.50% – 14.50% p.a.
Loan Amount
Rs. 8 lakh onwards
LTV Ratio
Up to 90% of the property value
Loan Tenure
Up to 30 years
Processing Charges
Up to 1% of the loan amount + GST
Tata Capital Housing Finance
Tata Capital Housing Finance offers tailor-made home loan solutions with minimal paperwork and competitive interest rates to cater to modern homebuyers.
Godrej Housing Finance provides affordable and flexible home loans, focusing on transparency and digital-first services for a seamless customer experience.
Feature
Details
Interest Rate
8.55% p.a. onwards
Loan Amount
As per the applicants’ credit profile, subject to the caps on the LTV ratio set by the RBI
Loan Tenure
Up to 30 years
Processing Charges
3% of the loan amount
Sammaan Capital
Sammaan Capital focuses on making home ownership accessible to underserved segments through flexible loan structures and affordable EMI plans.
Feature
Details
Interest Rate
8.75% p.a. onwards
Loan Tenure
Up to 15 years
Processing Fees
0.50% onwards
Piramal Capital & Housing Finance
Piramal offers innovative and personalized housing finance solutions across urban and semi-urban markets with an emphasis on affordable housing.
Feature
Details
Interest Rate
9.50% p.a. onwards
Loan Amount
75% to 90% of the property value
Loan Tenure
Up to 30 years
Processing Charges
Up to 1% of the loan amount
Aditya Birla Housing Finance
Aditya Birla Housing Finance provides home loans with a customer-first approach, fast disbursal, and options for both salaried and self-employed individuals.
Feature
Details
Interest Rate
8.60% p.a. onwards
Loan Amount
Up to 90% of the property value
Loan Tenure
Up to 30 years
Processing Charges
Up to 1% of the loan amount + GST
GIC Housing Finance
GIC Housing Finance, promoted by General Insurance Corporation, delivers cost-effective home loans for individuals looking for property purchase or construction.
Feature
Details
Interest Rate
8.80% p.a. onwards
Loan Amount
75% to 90% of the property value
Loan Tenure
Up to 30 years or retirement age (60 yrs. for salaried and 70 yrs. for self-employed individuals)
Processing Charges
Rs. 3,000 + GST
ICICI Home Finance
ICICI Home Finance, part of the ICICI Group, offers housing finance to salaried and self-employed individuals with easy eligibility and digital support.
Feature
Details
Interest Rate
9.30% p.a. onwards
Loan Amount
Rs. 3 lakhs – 5 crores
Tenure
Up to 25 years
Processing Fees
0.75%-3%
What are the key differences between HFCs and banks?
When choosing a home loan, it helps to understand the difference between housing finance companies vs banks. While both offer home loans, they may differ in interest rates, eligibility criteria, loan processing, and customer service. Understanding these differences can help you compare your options and choose a lender that best suits your financial needs. The table below highlights the key differences between HFCs and banks for easier comparison.
Criteria
Banks
Housing Finance Companies
Interest rates
They offer home loans at comparatively lower rates.
They have slightly higher interest rates for home loans.
Flexibility
Banks display limited flexibility, involving more comprehensive and rigorous documentation and processes.
HFCs facilitate greater flexibility, with streamlined procedures and less intensive paperwork requirements.
Credit facility
They provide hybrid term loan facilities based on consistent EMI payments and good credit scores.
HFCs do not offer hybrid term loan facilities or additional credit facilities on sanctioned loans.
Documentation
Banks are known for lengthier and more complex documentation procedures.
HFCs feature more efficient and faster documentation processes.
Disbursement time
Characterized by a longer processing time for loan disbursement
Recognized for quicker loan sanctioning and reduced processing time.
CIBIL score requirements
Banks adhere to strict CIBIL score criteria, often declining applicants with lower scores.
HFCs are known to offer some flexibility for applicants with lower scores.
What are the benefits of borrowing from a housing finance company?
Specialized services – HFCs focus primarily on home loans, offering tailored products and expert support to suit different borrower needs.
Flexible eligibility – Compared to banks, HFCs often have more lenient eligibility criteria, making it easier for self-employed or low-income applicants to get approved.
Competitive interest rates – Many housing finance companies offer attractive and competitive interest rates to make homeownership more affordable.
Faster processing – HFCs usually provide quicker loan approvals and disbursals, streamlining the home-buying process.
Diverse loan products – From home renovation loans to plot purchase loans, HFCs offer a variety of housing-related financial products.
Customer-centric approach – Their personalized service and focus on customer satisfaction often lead to a smoother borrowing experience.
What are the advantages and disadvantages of housing finance companies?
Advantages of housing finance companies
Disadvantages of housing finance companies
1. Specialization in housing finance: Housing finance companies have a focused expertise in housing finance. Since these companies are only limited to the housing segment, they possess in-depth knowledge and offer tailored solutions for housing-related financial needs. This specialization allows home buyers to experience informed and customized services.
1. Higher interest rates: HFCs are focused only on the housing segment of the nation. Such a hyper-focused nature of services leads to them charging a higher interest rate as compared to the ones offered by standard commercial banks. A higher interest rate can be a significant disadvantage to borrowers as it increases the overall loan amount significantly.
2. Flexibility in loan approval: Housing finance companies are known for offering greater flexibility in the home loan approval process. This includes a more accommodating approach to credit score and income verification. Where traditional financial institutions usually have stringent eligibility criteria, HFCs emerge as a better and more beneficial alternative for borrowers facing loan rejections.
2. Limited financial products: HFCs have an edge over banks as they reach out to the low-income segment of the population. However, unlike traditional banks, HFCs offer a limited number of financial products and services. This puts them at a disadvantage since customers usually look for a one-stop shop for all of their financial needs.
3. Serving lower-income segments: Usually, commercial banks are more inclined towards providing property financing solutions to individuals with a high credit score. This is because banks prefer applicants who are reliable and are less likely to default on loan repayment. Such a tendency leaves out a majority of the low-income segment. HFCs are known to reach out to this segment of the population by providing lenient home loan solutions. This accessibility helps promote house ownership among a broad spectrum of society.
3. Limited branch network: Many HFCs have fewer branches compared to banks, which can make it harder for customers to access in-person support or services.
How to choose between banks and housing finance companies?
The final decision to opt for an entity between banks and HFCs depends on your individual needs and preferences. If you have an already established relationship with a bank and are meeting its eligibility requirements, opting for a bank will be more beneficial since these offer lower interest rates.
On the other hand, if you are seeking flexibility in loan eligibility criteria and are looking to secure a loan quickly and efficiently, HFCs are a good choice.
Conclusion
Housing finance companies play a pivotal role in the Indian housing sector by catering to the diverse needs of homebuyers. Owing to their flexible eligibility criteria, robust customer service, efficient documentation, and reduced processing time, HFCs have cemented their place as one of the best lending companies for home loans.
That said, HFCs are not the only entities offering affordable and flexible home financing solutions. Non-Banking Financial Companies (NBFCs) are also known to be a good alternative for securing home loans.
In the current housing segment, Tata Capital home loans emerge as the most attractive and affordable home financing solution. Known for its streamlined application process, swift approval, and instant loan disbursement, Tata Capital has cemented its name as one of the best home loan providers in India. Further, Tata Capital’s home loan EMI calculator helps you plan your EMI and tenure with ease. Visit the Tata Capital website today!
Which body regulates Housing Finance Companies in India?
The Reserve Bank of India (RBI) regulates Housing Finance Companies (HFCs) in India, following the transfer of regulatory authority from the National Housing Bank (NHB) in 2019.
What is the role of NHB regarding Housing Finance Companies?
The National Housing Bank (NHB) now acts as a refinance and promotional agency, supporting HFCs through refinancing, housing development, and credit-related guidance, but not regulation.
How many Housing Finance Companies are there in India?
As of now, there are 80+ registered Housing Finance Companies in India with valid Certificates of Registration (CoR), monitored and updated by the RBI.
Where can one find a list of companies whose CoR has been canceled by RBI?
The RBI publishes an updated list of HFCs whose Certificates of Registration (CoRs) have been cancelled on its official website under the Housing Finance section.
HFCs are doing functions similar to banks as banks also provide housing loans. What is the difference between banks & HFCs?
While both banks and HFCs provide home loans, the key difference is that HFCs cater to a niche housing loan sector, especially for low-income individuals, with faster processing times while banks offer a broader range of financial products.
Which Housing Finance Company is best for home loans?
Tata Capital Housing Finance, LIC Housing Finance, HDFC Ltd., and PNB Housing Finance are among the best HFCs due to competitive rates, flexible tenures, and high loan-to-value options.
What is the role of housing finance companies?
HFCs offer loans for buying residential properties. They also finance land purchase linked to home construction or renovation and support affordable housing. Their primary role is to make homeownership accessible, especially to the underserved, through customized housing loan solutions.
Does the RBI regulate HFCs?
Yes, HFCs are regulated by the RBI. Before 2019, they were regulated by the NHB. However, they now follow RBI guidelines. These guidelines focus on lending rules, interest rates, customer protection, and capital adequacy. The RBI also published a list of registered HFCs. The NHB continues to support by serving as a refinancing and promotional agency.
What benefits do HFCs offer over banks?
The eligibility criteria at HFCs are more flexible than those at banks. The loan processing time is also faster. Moreover, HFCs offer customized repayment options. The biggest benefit is that HFCs can be more accommodating to self-employed borrowers or those with non-standard income. Thus, they are a preferred choice for many homebuyers.
How to apply for a home loan through an HFC?
You can apply for a home loan through an HFC by submitting an online or offline application. You will need to give your KYC documents with the application. You will also need to provide relevant property details. The HFC sanctions the loan after verifying and assessing the credit. Funds are disbursed instantly as per the pre-determined terms.
How can I find the best housing finance company in India?
To find the best housing finance company, you must compare HFCs based on interest rates, loan tenure, processing fees, eligibility, customer service, and repayment flexibility. Make sure you check the lender’s reputation and terms before choosing.
What is the process for housing finance company registration?
To register, an HFC must meet the prescribed regulatory requirements and apply for a Certificate of Registration (CoR) from the National Housing Bank (NHB). The application is reviewed before registration is granted.
Can self-employed individuals get home loans from housing finance companies?
Yes. Self-employed individuals can apply for home loans from HFCs. Lenders generally assess income, business stability, credit score, existing debts, and repayment capacity before approving the loan.
What documents are required to apply for a home loan with an HFC?
Common documents to submit when applying for a home loan with an HFC include identity and address proof, PAN, income proof, bank statements, photographs, and property documents. Self-employed applicants may also need business and tax-related documents.
21 August 2026
11 mins read
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