Home loan guide

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Home Loan for buying, building or refinancing your home

Understand how home loans work, the documents usually needed and how a balance transfer can work, then submit an enquiry.

  • For buying, constructing or refinancing a residential property.
  • Lenders review both your profile and the property documents.
  • Plan your repayment with the EMI calculator.
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Home loan basics

What is a home loan?

A home loan is a long-term loan used to buy a ready or under-construction house or flat, build a house on a plot you own, or refinance an existing home loan. The property is mortgaged to the lender as security until the loan is repaid.

Lenders usually finance only part of the property value. You pay the rest as your own contribution (down payment), along with costs such as stamp duty and registration. Because the tenure is long, even a small difference in interest rate or fees can change the total amount you repay.

Home loan at a glance

Purpose
Buying, building, extending or refinancing a home
Security
The property, mortgaged to the lender until the loan is repaid
Repayment
EMIs over a long tenure agreed with the lender
Your contribution
A down payment plus stamp duty and registration costs
Interest rate & fees
Fixed or floating, set by the lender — check the sanction letter and KFS
Eligibility

Home loan eligibility

A lender checks two things: you and the property. Criteria differ by lender, but the factors most commonly reviewed are:

  • Age, residence and the number of working years left, which can limit the tenure.
  • Stable income from salary, business or profession.
  • A healthy credit score and on-time repayment history.
  • Existing EMIs, so that the new EMI fits within your income.
  • A clear title, approved building plan and other legal approvals for the property.
  • Adding an earning family member as co-applicant, which many lenders allow and which can raise the amount you qualify for.

If the property is jointly owned, lenders usually require all co-owners to join the loan as co-applicants.

Documents required for a home loan

Lenders ask for your KYC and income documents, plus the property papers. The exact list depends on the lender, the property and your profile, so treat this as a starting checklist.

For salaried applicants

  • KYC: PAN card, Aadhaar or other identity and address proof, and photographs.
  • Recent salary slips and bank statements showing salary credits.
  • Form 16 or income tax returns.
  • Proof of employment, such as an appointment letter or employee ID, if asked.
How it works

Home loan process: step by step

A home loan involves checks on the property as well as on you, so it has more steps than a personal loan. The usual sequence is:

  1. Application and documents

    You apply with your KYC, income documents and details of the property you plan to buy or build.

  2. Credit and income check

    The lender checks your credit report, income and existing EMIs to work out how much you can borrow and over what tenure.

  3. Sanction letter and Key Fact Statement

    If approved, you receive the sanctioned amount, rate, tenure and charges, with a Key Fact Statement (KFS) showing the APR. Compare it with other offers before you accept.

  4. Legal and technical check

    The lender verifies the property title and approvals, and values the property. The loan amount depends on this valuation.

  5. Agreement and mortgage

    You sign the loan agreement and create the mortgage on the property as the lender requires, after checking that the terms match the sanction letter.

  6. Disbursal

    The lender pays the seller or builder. For an under-construction home, money is usually released in stages as construction progresses.

Banks and NBFCs regulated by the RBI must give you a Key Fact Statement, including the annual percentage rate (APR) and repayment schedule, before you sign a retail or MSME term loan agreement. Source: RBI circular on Key Facts Statement, 15 April 2024.

For home loans and other loans the RBI classes as personal loans, regulated banks and NBFCs must return your original property documents and remove any charge registered on the property within 30 days of full repayment or settlement, and compensate you for delays caused by them. Source: RBI circular on release of property documents, 13 September 2023.

Plan your EMI

Know your home loan EMI before you apply

Enter a loan amount, the interest rate from your offer and a tenure to see the monthly EMI and the total interest over the life of the loan.

  • Over a long tenure, the total interest can be large compared with the loan amount, so check it alongside the EMI.
  • Prepaying part of the loan early reduces the outstanding balance on which interest is charged.
  • Use the APR in your Key Fact Statement to compare offers on their full cost.

Example only, not an offer

Estimated monthly EMI  
Total interest
 
Total repayment
 

Reducing-balance calculation. It excludes fees and charges. Open the full EMI calculator

Interest rate

Fixed or floating interest rate on a home loan

A home loan can have a fixed rate, a floating rate, or a mix where the rate is fixed for an initial period and floating after that. On a floating-rate loan, the rate moves with the external benchmark or other reference rate named in your agreement, so your EMI or tenure can change.

When the benchmark rises on a floating-rate EMI loan, RBI rules require regulated lenders to offer you a choice: a higher EMI, a longer tenure or a mix of both, a switch to a fixed rate as per the lender's policy, or prepayment. Switching may carry a charge, which must be disclosed.

Under RBI directions, regulated lenders cannot levy prepayment charges on floating-rate loans to individuals for non-business purposes, such as a home loan for your own house, where the loan is sanctioned or renewed on or after 1 January 2026.

Compare EMIs at different rates Loan against property

Fixed vs floating rate

Floating rateFixed rate
How the rate works Floating rateMoves with the benchmark named in your agreement Fixed rateStays the same for the period agreed with the lender
Effect on EMI Floating rateEMI or tenure can go up or down Fixed rateEMI stays the same during the fixed period
Prepayment Floating rateNo prepayment charge for individuals on non-business loans sanctioned from 1 Jan 2026 Fixed rateCharges, if any, are as disclosed in the sanction letter and agreement
Suits you if Floating rateYou can handle EMI changes and may prepay Fixed rateYou want a predictable EMI

Sources: RBI circular on reset of floating interest rates, 18 August 2023; RBI (Pre-payment Charges on Loans) Directions, 2 July 2025.

Options

Types of home loan

Lenders offer home finance for different stages of owning a home. Availability and terms depend on the lender and the property.

Home purchase loan

To buy a ready-to-move or under-construction house or flat, new or resale.

Home construction loan

To build a house on a plot you own. Money is usually released in stages as construction progresses.

Plot loan

To buy a residential plot. Lenders may set conditions on when construction must start, and terms often differ from a regular home loan.

Home improvement or extension loan

To renovate, repair or add space to a home you already own, usually against an estimate and the required approvals.

Balance transfer

Moving your outstanding home loan to another lender for a different rate or terms. Count the new lender's fees and the legal and valuation costs before you switch.

Top-up loan

Additional funds over your existing home loan, usually offered after a record of regular repayments, depending on the property value and outstanding balance.

Know the full cost

How to compare home loan offers

Over a long tenure, small differences add up. When you compare offers:

  • Compare the APR in each Key Fact Statement. It includes the lender's charges, so it is a fairer comparison than the interest rate alone.
  • Check the rate type and benchmark: fixed, floating or a mix, and how often a floating rate is reset.
  • Look at the total interest over the tenure, not just the EMI.
  • Ask how much the lender will finance against your property, and plan your down payment and other costs accordingly.
  • Check the prepayment terms and what happens to your EMI or tenure when rates change.

Estimate your EMI and total interest with the EMI calculator

Charges to check in your sanction letter and KFS

The interest rate is only part of the cost of a home loan. Charges differ by lender, so check each of these in writing:

Processing fee

Charged for assessing and processing your application.

Legal and technical (valuation) charges

For verifying the property title and valuing the property.

Prepayment and foreclosure charges

What you pay to repay part of the loan early or to close it, if the lender is allowed to charge.

Late payment charges

Penalties if an EMI is missed or paid late.

Stamp duty and registration

On the property purchase and, where applicable, on the mortgage documents, as per your state.

Conversion fee

If you ask to switch between fixed and floating rates, where the lender allows it.

For floating-rate loans to individuals for non-business purposes, sanctioned or renewed on or after 1 January 2026, regulated lenders cannot charge for prepayment. Source: RBI (Pre-payment Charges on Loans) Directions, 2 July 2025.

What affects your home loan offer?

  • Your credit score, income and existing obligations.
  • The property's value, location, approvals and legal status.
  • Your down payment, and whether an earning co-applicant joins the loan.
  • The tenure you choose — a longer tenure lowers the EMI but increases the total interest.
Compare

Home loan vs top-up loan vs loan against property

Home loan Home loan top-up Loan against property
Purpose Buying, building or extending a home Additional funds over an existing home loan Funds for business or personal needs against a property you own
Security The home being financed The same property as your home loan A residential or commercial property you own
Who can apply Buyers or owners of a residential property Existing home loan borrowers, usually after regular repayments Owners of an eligible property
End use Restricted to the home As allowed by the lender Broad, but speculative uses are usually not allowed
Repayment EMIs over a long tenure EMIs, usually alongside the home loan EMIs over an agreed tenure

Swipe the table sideways to see all three options.

Rates, amounts and charges differ by lender and by your profile and property, so compare actual offers rather than product types alone.

If you were declined

Why home loan applications are declined

A home loan can be declined because of your profile or because of the property. Common reasons include:

  • A low credit score, or missed payments, defaults or settled accounts in your credit history.
  • A high existing EMI burden compared with your income.
  • Income that is irregular or hard to verify from your documents.
  • Property issues: an unclear title, missing approvals, or a project the lender does not finance.
  • A property valuation lower than expected, which reduces the amount the lender will finance.
  • Details that do not match across your documents.

Before you reapply, check your credit report and correct any errors, reduce existing dues where you can, consider adding an earning co-applicant, and get the property papers checked. A larger down payment or a longer tenure can also bring the EMI within your repayment capacity.

Borrow safely

A home loan is a large, long commitment. Protect yourself:

Borrow only from RBI-regulated banks and NBFCs. If you are unsure about a lender, check that it is a bank or an NBFC registered with the RBI.

Check that the lender's name on the sanction letter and agreement matches the lender you applied to, including when you apply through an app or an agent.

Never pay an upfront fee to "get a loan approved". Genuine fees are disclosed in writing by the lender.

Do not share OTPs, PINs, passwords or card details with anyone who calls or messages you about a loan.

Read the loan agreement fully before you sign, and keep a copy of every document you sign.

Get the property title verified independently if you have any doubt, and keep copies of every document you hand over to the lender.

FAQs

Home Loan – frequently asked questions

Can a home loan be used only for buying a ready property?

No. Depending on the lender, home loans can also be used to buy an under-construction property, build a house on a plot you own, extend or renovate a home, or refinance an existing home loan.

How much home loan can I get?

It depends on your income, existing EMIs, credit profile, age and the value of the property. Lenders finance only part of the property value, and you pay the rest as a down payment. The lender confirms the amount in the sanction letter.

Why does a home loan need more documents than other loans?

Lenders assess both your profile and the property. Along with your KYC and income documents, they check the property title, approvals and valuation before sanction and disbursal.

Should I add a co-applicant to my home loan?

Adding an earning family member as co-applicant can increase the amount you qualify for, because the lender considers both incomes. If the property is jointly owned, lenders usually require all co-owners to be co-applicants.

What is the difference between a fixed and a floating rate home loan?

A fixed rate stays the same for the period agreed with the lender, so the EMI does not change during that period. A floating rate moves with the benchmark named in your agreement, so your EMI or tenure can change.

Can I prepay my home loan?

Yes, lenders generally allow part-prepayment and foreclosure. Under RBI directions, regulated lenders cannot levy prepayment charges on floating-rate loans to individuals for non-business purposes that are sanctioned or renewed on or after 1 January 2026. For other loans, check the terms in your sanction letter and agreement.

Can I transfer my existing home loan to another lender?

Yes, through a balance transfer, if the new lender approves your profile and the property. Compare the possible savings with the new lender's processing, legal and valuation charges, and any charge on closing the old loan, before you switch.

What is a home loan top-up?

A top-up is an additional loan over your existing home loan, usually offered after a record of regular repayments. The amount depends on the property value and your outstanding balance, and the lender decides the permitted end uses.

How is money released for an under-construction property?

Usually in stages, linked to construction progress, and paid to the builder or seller. You may pay only interest on the amount released until the full loan is disbursed, depending on the lender's terms.

When do I get my property documents back?

After you repay the loan in full. Banks and NBFCs regulated by the RBI must return the original property documents and remove any charge registered on the property within 30 days of full repayment or settlement.

Why was my home loan application rejected?

Common reasons include a low credit score, a high existing EMI burden, income that could not be verified, a property with title or approval issues, or a valuation lower than expected. Check your credit report and the property papers before you reapply.

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About CredBazar. CredBazar helps you connect with lenders for your loan requirement. CredBazar is not the lender: whether your loan is approved, and the interest rate and terms you are offered, are decided by the lender.

The information on this page is general guidance and is not an offer of credit. Loan approval, interest rates, fees, tenure and other terms are decided by the lender and depend on your profile. Please read the lender's terms before you proceed.

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