Home Loan
A home loan is a type of financing provided by banks and financial institutions to help individuals purchase, construct, or renovate residential properties. In India, home loans are a popular financial product, and they come with various benefits and features.
Key Features of Home Loans in India
Loan Amount: Based on the applicant’s repayment capacity and the property’s value (Loan-to-Value ratio, or LTV, is typically 75%-90%).
Interest Rates:
Two types:
Fixed Interest Rate: Remains constant throughout the loan tenure.
Floating Interest Rate: Varies based on market conditions (linked to external benchmarks like the Repo Rate).
Current interest rates (2024): ~8.5% – 10.5% annually.
Tenure: Ranges from 5 to 30 years, depending on the applicant’s preference and age.
Eligibility Criteria:
Age: 21-60 years (salaried), 21-65 years (self-employed).
Income: Minimum monthly income requirements vary by lender.
Employment stability: At least 2-3 years of work experience.
CIBIL Score: Preferably 750+ for better rates.
Down Payment: Borrowers need to pay ~10%-25% of the property’s cost upfront.
What is LAP?
A Loan Against Property is a secured loan where you pledge residential, commercial, or industrial property as collateral to meet personal or business financial needs.
Key Features
Loan Amount: 50%-90% of the property’s market value (depends on property type and lender).
Interest Rates: Lower than personal loans, ~8.8%-12% (floating or fixed).
Tenure: Up to 15-20 years, depending on the loan amount and borrower profile.
Eligibility: Salaried/self-employed individuals with a stable income and ownership of property.
Property Types Accepted: Residential, commercial, or industrial property.
What is a Business Loan?
A Business Loan is an unsecured or secured loan offered by banks, NBFCs, or financial institutions to fund business expenses such as expansion, working capital, equipment purchase, or operational costs.
Key Features
Loan Amount: Varies by business profile; can range from ₹50,00,000 to several crores.
Interest Rates: 14%-18% (depends on credit profile and lender).
Tenure: Typically 1-5 years for unsecured loans; up to 15 years for secured loans.
Eligibility: Established business with a proven track record (usually 2+ years).
Minimum turnover as required by the lender.