Are you in the market to buy a new home? But do you feel it is a little too heavy on your pockets? Well, there is a way you can buy a new abode without financing the entire purchase by yourself. Housing loans have now made it incredibly easy to own the house of your dreams. Wondering how? Here’s everything you need to know.
Types of home loans
1. Home purchase loan – This is the most popular type of home loan. You can avail of a home purchase loan to buy a new or pre-owned home.
2. Home construction loan – This loan is designed for people interested in constructing their dream home instead of buying a pre-constructed one. However, the approval process for this loan is slightly different as it considers the plot’s cost as well.
3. Home improvement loan – Are you looking to renovate and improve your home? A home improvement loan can help you do just that. This includes internal and external repairs, painting, construction of overhead water tank, electrical renovation, etc.
4. Home extension loan – Make use of home extension loans to alter the current structure of your home and add new rooms. This loan can be used to increase the amount of built-up space at your home.
CIBIL or credit score is typically used to determine your creditworthiness. A lender can get a proper understanding of your repayment capacity and offer you an appropriate interest rate. If you’ve got a low score, you’ll naturally have lower loan eligibility and vice versa. So, make sure you have a credit score of 750 or above.
2. Debt-to-income ratio
If your debt is eating up a chunk of your monthly income, you’ll automatically become a high-risk borrower. Having a low debt-to-income ratio, on the other hand, will increase your chances of obtaining the loan. It can also help you get a lower rate of interest.
3. Employment
A steady source of income and a secure job can convince the lender of your loan repayment capacity. Your loan eligibility will also depend upon your monthly income. The higher the income, the higher the chances of loan approval.
Now that you know all about home loans, you can approach a financial institution confidently!
It makes it easier to buy a home without a huge upfront payment, allowing you to build equity in your own asset instead of paying rent.
You can avail of tax deduction of up to Rs. 2 lakhs on the interest amount under section 24(b) and up to Rs. 1.5 lakhs under section 80C.
Home loans come with long repayment tenures, often up to 30 years, allowing you to choose an EMI that fits your budget.
Documents required for a home loan
Here’s a list of documents required for a home loan from Tata Capital:
Documents
Salaried
Self-employed professional
Self-employed non professional
Application form with photograph duly signed
Yes
Yes
Yes
Identity, address and age proof
Yes
Yes
Yes
Bank statements for last 6 months
Yes
Yes
Yes
Salary slips of last 3 months
Yes
No
No
Processing fee cheque
Yes
Yes
Yes
Form 16/ Income Tax Returns
Yes
Yes
Yes
Proof of Business Existence
No
Yes
Yes
Business Profile
No
No
Yes
Education qualification certificate and Proof of Business Existence
No
Yes
No
Income Tax Returns (ITR) of last 3 years with computation of income
No
Yes
Yes
Last 3 years CA certified/audited Balance Sheets and Profit & Loss Statements
No
Yes
Yes
To sum up
With minimal paperwork and instant disbursal, Tata Capital can ensure that you have a comfortable borrowing experience. With our housing loan interest rates starting from just 6.70% and easy repayment options, you can comfortably finance your new abode. So, wait no longer! Use our home loan EMI calculator to understand your loan liabilities and start your loan journey today.
You can calculate your potential home loan EMI by using this formula: P x R x (1+R)^N / [(1+R)^N-1].
P is the principal loan amount
N is the tenure (in months)
R is the monthly interest rate
For a faster, more accurate calculation, you can use Tata Capital's online home loan EMI calculator.
What is the minimum salary required for a home loan in India?
The minimum salary required for a home loan in India varies from lender to lender. However, it typically ranges from Rs. 25,000 to Rs. 30,000 per month.
How long does it take to get a home loan approved?
It usually takes 1-2 weeks to get a home loan approved. During this time, the lender verifies all legal and eligibility requirements to approve and disburse the loan amount.
Is it better to go for a fixed or floating interest rate?
The decision between a fixed or floating interest rate depends on your financial situation and risk comfort. A fixed interest rate is better if you want stability, as it ensures your EMIs stay the same throughout the loan. But if you're comfortable with market ups and downs, a floating interest rate may be ideal. The rate may increase or decrease over time, which could lower your interest cost in the long run.
05 June 2025
4 mins read
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