A Guide to EMI for 20 Lakh Home Loan in India
Owning a home symbolises financial success in Indian society, fueling the aspirations of many to secure their property. However, the steep rise in property prices poses a significant challenge, often straining individuals financially. In such circumstances, a home loan from a reputable financial institution emerges as a viable solution. This guide delves into the intricacies of availing a 20 Lakh home loan, offering insights into EMIs and interest rates, and facilitating informed decision-making for prospective homeowners.
What is the EMI for a 20 Lakh Home Loan?
The EMI for a Rs. 20 Lakh home loan varies depending on the repayment tenure chosen.
| Interest Rate (p.a.) | Tenure | EMI |
|---|---|---|
| 9% per annum | 10 Years | Rs. 25,335 |
| 9% per annum | 15 Years | Rs. 20,285 |
| 9% per annum | 20 Years | Rs. 17,995 |
| 9% per annum | 30 Years | Rs. 16,092 |
Eligibility Criteria for 20 Lakh Home Loan EMI
Securing a home loan of Rs. 20 Lakh involves meeting certain eligibility criteria set forth by lending institutions.
-
Age
Prospective borrowers must fall within the age bracket of 24 to 65 years. This ensures that individuals can repay the loan within their active working years.
-
Employment Status
Salaried applicants should have at least 2 years of work experience, with at least one year spent with the current employer. On the other hand, self-employed individuals must demonstrate a stable business tenure of at least 3 years, with the last two years showing profitability.
-
Income
For salaried individuals, a minimum monthly income of Rs. 30,000 is typically required to qualify for the loan. Self-employed applicants must exhibit a steady income stream from their business activities.
-
Credit Score
A healthy credit score is essential for loan approval. Lenders generally prefer a credit score of 650 or above, indicating a history of responsible borrowing and timely repayment.
-
Debt-Income Ratio
A debt-to-income ratio below 50% is typically considered favourable, indicating that the borrower's debt obligations are manageable to their income.
Documents Needed for 20 Lakh Home Loan EMI
Identity and Residence Proof
Identity proof establishes your identity, while residence proof verifies your current address. Acceptable documents for both include:
- Aadhaar card
- PAN card
- Voter ID card
- Passport
- Driver's license
Income Proof
- For salaried individuals, income proof typically includes three months' salary slips, six months' bank statements, latest Form-16, and Income Tax returns. This documentation provides a clear picture of your financial stability and repayment capacity.
- Self-employed individuals must provide additional documents such as business registration certificates, business profiles on letterhead, last 2 years IT returns, bank statements, and copies of Profit & Loss (P/L) Projection Statements for the last three years.
Property Documents
Property documents include:
- A sale deed
- A title deed
- NOC from relevant authorities
- Property tax receipts
- Possession certificate
Other Documents
Other following miscellaneous documents may be also required:
- Processing fee cheques from salary or business accounts
- Appointment letters
- Increment letters
- Business account statements
Guide to 20 Lakh Home Loan EMI
Understanding the implications of different repayment tenures is crucial when considering a significant financial commitment like a home loan.
20 Lakh Home Loan EMI for 5 Years
| Time Period | 5 years |
| Loan Amount | Rs. 20,00,000 |
| Rate of Interest (p.a.) | 8.45% |
| EMI | Rs. 40,985 |
| Total Interest | Rs. 459,093 |
| Total Repayment | Rs. 2,459,093 |
20 Lakh Home Loan EMI for 10 Years
| Time Period | 10 years |
| Loan Amount | Rs. 20,00,000 |
| Rate of Interest (p.a.) | 8.45% |
| EMI | Rs. 24,744 |
| Total Interest | Rs. 969,242 |
| Total Repayment | Rs. 2,969,242 |
20 Lakh Home Loan EMI for 15 Years
| Time Period | 15 years |
| Loan Amount | Rs. 20,00,000 |
| Rate of Interest (p.a.) | 8.45% |
| EMI | Rs. 19,636 |
| Total Interest | Rs. 1,534,519 |
| Total Repayment | Rs. 3,534,519 |
20 Lakh Home Loan EMI for 20 Years
| Time Period | 20 years |
| Loan Amount | Rs. 20,00,000 |
| Rate of Interest (p.a.) | 8.45% |
| EMI | Rs. 17,293 |
| Total Interest | Rs. 2,150,374 |
| Total Repayment | Rs. 4,150,374 |
20 Lakh Home Loan EMI for 25 Years
| Time Period | 25 years |
| Loan Amount | Rs. 20,00,000 |
| Rate of Interest (p.a.) | 8.45% |
| EMI | Rs. 16,037 |
| Total Interest | Rs. 2,811,162 |
| Total Repayment | Rs. 4,811,162 |
20 Lakh Home Loan EMI for 30 Years
| Time Period | 30 years |
| Loan Amount | Rs. 20,00,000 |
| Rate of Interest (p.a.) | 8.45% |
| EMI | Rs. 15,307 |
| Total Interest | Rs. 3,510,684 |
| Total Repayment | Rs. 5,510,684 |
EMI for 20 Lakh Home Loan: Simplest Way to Calculate
Principal or Loan Amount
The principal amount, or the loan amount remains constant in the case of a Rs. 20 Lakh home loan. However, it's essential to note that the loan amount may vary depending on factors such as the down payment percentage and the loan-to-value (LTV) ratio.
Home Loan Eligibility Based on the Value of Property
The LTV ratio determines the maximum loan amount a lender is willing to provide in relation to the property's market value. For properties valued under INR 30 Lakh, lenders typically offer up to 90% of the property value as the loan amount.
Repayment Term or Tenure
The repayment tenure is usually measured in years, and the chosen tenure significantly impacts the EMI amount. Opting for a longer tenure may reduce the monthly installment but could result in higher overall interest payments.
Interest Rate
Financial institutions offer varying interest rates based on factors like the borrower's credit score, income, age, and loan term. A lower interest rate translates to more affordable EMIs, whereas higher rates increase the monthly installment amount and overall repayment burden.
Compare 20 Lakh Home Loan EMI for 15 Years
| Bank Name | Lowest Interest Rate | EMI for 20 Lakh |
|---|---|---|
| HDFC | 8.4% p.a. | Rs. 19,580/- |
| LIC | 8.4% p.a. | Rs. 19,580/- |
| AXIS | 8.5% p.a. | Rs. 19,700/- |
| IDBI | 8.5% p.a. | Rs. 19,700/- |
| UNION | 8.75% p.a. | Rs. 19,980/- |
| BARODA | 8.85% p.a. | Rs. 20,100/- |
| SBI | 9.15% p.a. | Rs. 20,460/- |
| ICICI | 9.15% p.a. | Rs. 20,460/- |
| PNB | 9% p.a. | Rs. 20,280/- |
| CANARA | 9% p.a. | Rs. 20,280/- |
How to Minimise Your EMI for a 20 Lakh Home Loan?
Long-Term Loans
Opting for a longer tenure, such as 20 or 30 years, can reduce the monthly EMI burden, making it more manageable within your budget. While a longer tenure reduces the immediate financial strain, it's essential to weigh the long-term cost implications before deciding.
Type of EMI Plan
Lenders offer various EMI schemes tailored to borrowers' needs. One such scheme is the Step-Up EMI plan, where the EMI amount starts low and gradually increases over time. This option can be beneficial for borrowers expecting their income to rise steadily.
Existing Bank
Being an existing customer with a good track record in a particular bank can work to your advantage when applying for a home loan. Banks often offer preferential rates or additional benefits to loyal customers, such as lower interest rates or reduced processing fees.
Negotiate for a Lower Rate
By highlighting your strong financial credentials, you can negotiate for lower interest rates or better loan terms, ultimately leading to reduced EMIs and overall savings over the loan tenure.
How to Use an Online Home Loan EMI Calculator?
- Go to the home loan EMI calculator.
- Choose the principal home loan amount by adjusting the slider.
- Select the loan tenure by moving the slider from left to right.
- Similarly, set the interest rate offered.
- Your monthly EMIs will appear in the result tab.
Do's and Don'ts When Applying for a 20 Lakh Home Loan
| Do's | Don'ts |
|---|---|
| Review your credit report: Ensure it's error-free and work on improving your score if needed. | Don't apply with multiple lenders: Multiple loan applications can negatively impact your credit score. |
| Research interest rates: Compare rates from different lenders to secure the best deal. | Don't borrow beyond your means: Stick to an EMI that comfortably fits your monthly budget. |
| Consider additional costs: Account for other expenses like registration fees, insurance, and taxes. | Don't forget to read the fine print: Carefully review the loan agreement and terms before signing. |
| Maintain financial stability: Steady income and job security improve your chances of loan approval. | Don't neglect your credit history: Past financial behaviour can influence your eligibility. |
| Factor in future contingencies: Plan for emergencies or changes in financial circumstances. | Don't underestimate hidden costs: Be aware of any unexpected charges. |
Conclusion
What is the EMI for a 20 lakh home loan?
The EMI for a Rs. 20 lakh home loan varies from approximately Rs. 25,355 to Rs. 16,092, depending on the chosen repayment tenure, ranging from 10 to 30 years.
Eligibility criteria for 20 lakh home loan EMI
- Age
- Employment status
- Income
- Credit score
- Debt-Income ratio
Documents needed for 20 lakh home loan EMI
- Identity and residence proof
- Income proof
- Property documents
- Other documents
Guide to 20 lakh home loan EMI
- 20 lakhs home loan EMI for 5 years
- 20 lakhs home loan EMI for 10 years
- 20 lahks home loan EMI for 15 years
- 20 lakhs home loan EMI for 20 years
- 20 lakhs home loan EMI for 25 years
- 20 lakhs home loan EMI for 30 years
EMI for 20 lakh home Loan: Simplest Way to Calculate
- Principal or loan amount
- Home loan eligibility based on the value of property
- Repayment term or tenure
- Interest rate
Compare 20 lakh home loan EMI for 15 Years
- HDFC
- Axis
- Bank of Baroda
- SBI
- ICICI
- Union
- PNB
- LIC
- IDBI
- Canara
How to minimise your EMI for a 20 lakh home loan?
- Long-Term loans
- Type of EMI plan
- Existing bank
- Negotiate for lower rate
How to use an online home loan EMI calculator?
To utilise an online home loan EMI calculator, visit the calculator tool and adjust the sliders to choose the principal loan amount and loan tenure. Set the offered interest rate accordingly. Upon completion, the calculator will display your monthly EMIs in the result tab.
Do's and don'ts when applying for a 20 lakh home loan
Do's:
- Review your credit report
- Research interest rates
Don'ts:
- Don't apply with multiple lenders
- Don't borrow beyond your means
FAQ's
- Age
- Employment status
- Income
- Credit score
- Debt-Income ratio
- Identity and residence proof
- Income proof
- Property documents
- Other documents
- Long-Term loans
- Type of EMI plan
- Existing bank
- Negotiate for lower rate
Do's:
- Review your credit report
- Research interest rates
- Consider additional costs
- Maintain financial stability
- Factor in future contingencies
Don'ts:
- Don't apply with multiple lenders
- Don't borrow beyond your means
- Don't forget to read the fine print
- Don't neglect your credit history
- Don't underestimate hidden costs
