A home loan, also known as a mortgage or housing loan, is a financial product that enables individuals to purchase or construct their own homes.
It is a long-term loan provided by banks, housing finance companies, and other financial institutions. The loan is secured by the property being financed, which serves as collateral.
These loans are offered by various financial institutions such as banks, housing finance companies, and non-banking financial companies (NBFCs).
The loan amount is generally determined based on factors such as the applicant's income, repayment capacity, and the property's value.
Home loan interest rates can be fixed or floating. These rates vary among lenders and depend on market conditions and the borrower's credit profile.
The repayment period for home loans can range from 5 years to 30 years, depending on the lender and the borrower's preference.
Borrowers are usually required to make a down payment, which is a percentage of the property's value. The remaining amount is financed through the home loan.
Lenders charge a processing fee, which is a percentage of the loan amount, for processing the home loan application.
Borrowers can avail of tax benefits on the principal and interest components of the home loan under the Income Tax Act, subject to specific conditions.
