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.
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 |
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.
Identity proof establishes your identity, while residence proof verifies your current address. Acceptable documents for both include:
Property documents include:
Other following miscellaneous documents may be also required:
Understanding the implications of different repayment tenures is crucial when considering a significant financial commitment like a home loan.
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 |
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 |
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 |
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 |
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 |
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 |
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.
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.
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.
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.
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/- |
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.
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.
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.
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.
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. |
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
Documents needed for 20 lakh home loan EMI
Guide to 20 lakh home loan EMI
EMI for 20 lakh home Loan: Simplest Way to Calculate
Compare 20 lakh home loan EMI for 15 Years
How to minimise your EMI for a 20 lakh home loan?
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
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