A puzzled woman with a laptop, struggling with home loans questions and challenges of tricky interest rate that Finansh's Home Loans FAQs aim to address.

Home Loan FAQs

Welcome to Finansh’s Home Loan FAQs, where we address your burning questions about securing a home loan. Whether you’re a first-time homebuyer or someone looking to refinance, our expert advice has got you covered.

What's Inside?


Qualifying for a home loan in India involves several criteria:

Age: The applicant must be at least 18 years old at the start of the loan and generally be up to 70 years of age at loan closure.

Income: A steady source of income, whether you’re salaried, self-employed, or a business owner, is essential.

Credit Score: A good credit score (usually 700 or above) is favorable, although most banks consider scores starting from 550 based on other merits.

Employment Stability: Salaried individuals need minimum 1 year of work experience, while the self-employed and business owners normally require a minimum of 2 years in their field.

Existing Liabilities: If you have other loans or EMI commitments, they will be factored into your loan eligibility to ensure you can manage repayments properly.

Property Value and Type: The property’s value and type also influences loan eligibility, especially if it’s seen as a good investment by the bank.

Down Payment: You’re typically required to make a down payment, often around 10-25% of the property’s value.

Don’t forget, our smart assistant, FinBo, can help you determine your precise loan eligibility with the most accurate interest rate and helps you find the perfect bank for your home loan.

We suggest the following guidelines:

Monthly EMI Budget: Your combined EMIs, inclusive of the proposed home loan, ideally should NOT exceed:

70% of your income if you earn above ₹10 lakhs annually.

50% if your income is less than ₹5 lakhs.

30% for incomes below ₹3 lakhs.

Emergency Buffer: Always try to maintain a buffer of 3-6 months of your EMIs. This provides a safety net in case of unforeseen financial challenges.

Budgeting & Financial Planning: Just like planning a weekend getaway, a bit of structured budgeting and forward-thinking can make all the difference. By doing so, you ensure that your monthly Home Loan EMI doesn’t sneak up on your day-to-day finances affecting your lifestyle adversely. Plus, it keeps your other money dreams safe and sound.

Account for the Extras: Buying a home isn’t just about the big price tag; it’s also about the little tags that follow. Think of it like buying a gadget and then realizing you need a case, screen guard, and perhaps some fancy headphones. In the housing world, these translate to costs like maintenance, property taxes, furnishing and insurance. Plan for these to ensure you’re not caught off-guard.

The Loan-to-Value (LTV) ratio represents the amount of a home loan compared to the value of the property being purchased or refinanced. It is calculated by dividing the loan amount by the property value as per the bank’s valuation report (or the purchase price, whichever is lower) of the property. The resulting figure is then expressed as a percentage.

Banks see a lower LTV as lower risk, often leading to better interest rates. Simply, a lower LTV can offer better terms and long-term savings.

The amount you can borrow as a home loan is mainly determined by your and any co-applicants’ incomes. It is a measure of how much monthly EMI you can afford to pay back.

Further, RBI has set the following guidelines on maximum permissible Loan-to-Value (LTV) ratios which determines the amount of money you need to bring in as a down payment:

  1. For properties costing up to ₹33.33 Lakhs: You can get a home loan up to 90% of the property’s value (Max. 30 Lakhs).
  2. For properties above 33.33 Lakhs and upto ₹93.75 Lakhs: The home loan can cover up to 80% (Max. 75 Lakhs).
  3. For properties costing above ₹93.75 Lakhs: You can borrow up to 75% of the property’s value.

However, the “property value” here is the lower of the price you paid or agreed to pay the seller and the value the bank determines from its own valuation report.

Let’s understand this better with a few examples:

Example 1:
If you’re buying a property worth ₹30 Lakhs, the maximum loan amount based on LTV would be ₹27 lakhs (90% of ₹30 lakhs).

But, let’s say your income allows you to repay a loan of only ₹25 lakhs comfortably. In this case, the bank will approve a loan of ₹25 lakhs despite the LTV allowing for ₹27 lakhs.

Example 2:
For a property worth ₹75 lakhs, the LTV-based loan amount would be ₹60 lakhs (80% of ₹75 lakhs).

Now, even if your income suggests you can only comfortably handle a loan of ₹80 lakhs, the bank can still approve a loan of Rs ₹60 lakhs only.

Example 3:
On a property worth ₹1 Crore, an LTV-based loan would amount to ₹75 lakhs (75% of ₹1 Crore). But, if your income profile allows you a loan of only ₹70 lakhs, then ₹70 lakhs is what the bank will sanction.

Key Takeaways:

Valuation Fluctuations: The value of your property can change, often influenced by market demand. Especially in builder projects, short-term significant appreciation is often seen due to high demand.

LTV vs. Income: While LTV sets the maximum amount you can borrow based on the property’s value, your income dictates how much you can actually repay. The bank considers both before approving a loan.

Striking a Balance: Always choose a home loan amount that balances between the down payment you can make and the EMI your current income can comfortably support. This ensures you won’t struggle with repayments in the future.

If you’re scratching your head over numbers, our smart assistant FinBo is here to help. Have a quick chat and find your true eligibility and the most suitable bank for your needs.

The interest rate on your home loan is influenced by a combination of factors. To shed some light:

Credit Score: A higher credit score fetches a better interest rate because you are seen as less risky by Banks.

Loan-to-Value (LTV) Ratio: Opting for a higher down payment, leading to a lower LTV, often helps to secure a better rate.

Type of Interest Rate: Your choice between fixed and floating rates have a notable impact on the final interest rate you get.

Employment Status: Home Loan interest rates vary based on whether you’re a salaried individual, a business owner, or a self-employed professional.

Bank’s Evaluation: Each bank and financial institution employs its unique scoring system and risk evaluation method to determine the interest rate they provide based on your financial profile.

Before finalizing your home loan, it’s wise to review rates across different Banks. Our free digital assistant, FinBo, simplifies this for you. Give it a try!

Costs associated with a Home Loan in India differ among lenders but usually consist of:

Processing Fee: A one-time charge levied by the lender to manage your home loan application. It generally ranges from 0.25% to 2% of the home loan amount (with maximum and minimum limits). Keep an eye out for special festive campaigns by banks that offer concessions in this fee.

Prepayment Charges: For Fixed Rate Home Loans, several lenders impose a fee for early repayment. However, RBI guidelines mandate that banks cannot levy prepayment charges on floating rate home loans for individual borrowers.

Late Payment Charges: Delaying your monthly EMI could lead banks to penalize you, typically around 2% of the overdue amount.

Legal and Technical Evaluation Fee: This one-time charge is for the legal verification of property documents and a technical assessment of the property’s value. Some banks waive this fee while buying new properties from approved builders and also when you transfer your existing home loan to them.

Stamp Duty and Registration Charges: Governed by state regulations, these charges are for property registration.

Other Charges: These nominal charges include Document Retrieval Charges (at the time of loan closure), Loan Conversion Fee (for switching between fixed to floating rates), Cheque bounce charges, and CERSAI registration fee, etc.

It’s vital to carefully review all charges and fees with your lender before signing the loan agreement. While these charges may seem nominal individually, once combined, they can add a significant amount to the cost of your home loan. Always be clear about these upfront to avoid surprises later.

Here’s a reason to smile. For Finansh fulfilled Home Loans, we negotiate with the bank of your choice for the best deal for FREE.

Interest rates for home loans vary due to several factors such as the Reserve Bank of India’s policy rates, market conditions, and individual lender policies. Rather than navigating complex rate comparison charts that provide only a rough estimate, turn to our smart assistant, FinBo. It offers personalized recommendations based on current rates, available offers, and your unique financial profile. It’s one of a kind—give it a try.

Remember, while interest rates are a significant factor, it’s equally important to choose the right product and consider fees and other terms and conditions when making a decision.

This is where our experts step in. Finansh Home Loan Experts are highly qualified ex-bankers who offer unbiased guidance to help you better understand your home loan options and optimize your application for maximum savings. The best part? Our premium advisory service is completely free for you.

Choosing the right home loan lender for your needs involves a combination of research, understanding your priorities, and evaluating available offers. Here are some steps to guide you:

Determine Your Priorities: Understand what’s important to you. Is it the interest rate, customer service, processing speed, or the flexibility of terms?

Research Lenders: Don’t jump to the first lender you find or the one you already have a banking relationship with. Explore Public Sector Banks (Government Banks), Private Banks, and good Non-Bank lenders (Housing Finance Companies).

Compare Interest Rates and Terms: While the interest rate is a significant factor, also consider other terms like prepayment penalties, maximum permitted loan tenure, processing fees, Interest rate benchmark and reset frequency, quality of online banking facility etc.

Check Reviews and Testimonials: Look for reviews online and seek recommendations from friends or family. This can give you insights into the lender’s customer service and reliability.

Ask Questions: Once you shortlist a few lenders, reach out to them. Ask questions to understand their offerings better and to gauge their responsiveness.

Evaluate the Fine Print: Before finalizing, ensure you’re aware of all charges, terms, and conditions. The lowest interest rate might come with hidden fees or unfavorable terms.

Leverage Tools: Use our exclusive free tool FinBo to understand which lenders best match your financial profile and requirements. FinBo understands your needs and matches you with the best lenders in real-time.

Lastly, remember that the right lender for you might not be the right one for someone else. It’s a personal decision based on your specific needs, comfort level, and financial situation.

At Finansh, we simplify this process for you, saving you both time and money. We ensure that you find the perfect home loan lender without the hassle and have your home loan delivered right to your doorstep at no extra cost.

Here a few quick tips to improve your home loan approval chances:

Boost Your Credit Score: A higher credit score improves your loan eligibility. Regularly check your credit report, clear any overdue EMIs, and ensure timely payments of bills to maintain a healthy score.

Stable Income: Lenders favor applicants with a steady income. If you’re salaried, a longer employment history can be advantageous, while self-employed individuals should show consistent income over the past few years.

Manage Loans: Your EMI-to-Income ratio plays a significant role. Keep your ongoing loans in check and avoid taking on new loans right before your home loan application.

Co-applicant: Consider adding a co-applicant with a stable income. This improves your loan eligibility.

Prefer Properties approved by Banks: Properties already vetted by banks or those built by reputed developers tend to receive quicker loan approvals.

Keep Your Documents Ready: Ensure all required documentation, like proof of income, property papers, and identity proof, are up-to-date and ready for submission.

Lastly, don’t hesitate to Book a Free Call with Finansh Experts to find a lender that best fits your profile. Our goal at Finansh is to make your home loan journey as smooth as possible!

Pre-Approval refers to the process where a Bank reviews your basic financial background to determine your loan eligibility and how much it would be willing to lend you before you select a property. Here’s why it can sometimes be beneficial:

Clear Budgeting: With pre-approval, you know the maximum amount you can borrow, helping you focus on properties within your budget.

Increased Negotiation Power: A few sellers specially incase of resale properties prioritize buyers with pre-approval since it indicates serious intent and a Bank’s backing.

Faster Loan Processing: Once you select a property, the loan process can move quicker since the Bank has already reviewed your finances and a part of the job is complete.

Assurance: It provides peace of mind, knowing that unless there’s a significant change in your financial situation or the property’s valuation is way off, you’re likely to get the home loan.

While pre-approval isn’t a necessity, it certainly gives home buyers an advantage in the competitive real estate market by showcasing their financial preparedness. However, remember that just because a bank gives you a pre-approved offer doesn’t necessarily mean it’s the best fit for your home loan.

Quick Tip: Use FinBo to find your exact home loan eligibility and interest rate with the most suitable home loan products. With Finansh Fulfilled service you choose the best bank for you and get your home loan delivered directly at your doorstep. Experience our premium advisory services for Free!!

When applying for a home loan in India, several documents are needed to verify your identity, income, and property details. Here’s a detailed list of documents required for a home loan in India.


Your credit score?

Think of it like a report card for your financial behavior. It’s a number that tells lenders how good you’ve been with your previous loans. The score normally goes from 300 to 900 – the higher, the better.

In India, most lenders price their Home Loans based on your credit score. A higher credit score leads to a lower interest rate. On the flip side, a low credit score, typically below 550 often leads to outright loan rejection by major banks.

Further, having a high credit score can expedite your Home Loan application process, making your home buying journey smoother. With a good credit score, you also stand a chance to negotiate better terms with the bank.

In India, if your credit score is below 550, it’s tough to get a home loan from big banks. However, some housing finance companies might still give you a loan if your score is low. If they do, you have to pay higher interest rates and comply with tougher loan sanction conditions.

To improve your chances, consider a joint loan application with someone who has a better score, or aim to make a larger down payment. In any case, work on improving your credit score by paying off overdue debts and maintaining a clean repayment history.

Regularly reviewing your credit report is essential; it helps catch any discrepancies and gives you a clearer picture before applying for a home loan.

The duration to pay off a home loan depends on the tenure you choose and the terms set by the bank. In India, typical home loan tenures range from 2 to 30 years. Let’s dive deeper into the crucial decision between a 15-year and a 30-year home loan term:

15-year Home Loan Term


Faster Equity Build-Up: You’ll own your home outright in a shorter timeframe.

Lower Total Interest: The shorter term means less interest is paid by you over the home loan’s life.


Higher Monthly EMIs: The shorter term means bigger EMIs, which could strain your monthly budget and standard of living.

Reduced Affordability: The higher monthly EMIs limits the price of the home you can afford.

30-year Mortgage Term


Lower Monthly EMIs: The home loan spread over 30 years results in smaller and more manageable EMIs.

Increased Affordability: A longer term Home Loan allows you to purchase a pricier home as your home loan eligibility increases.

Flexibility: You can always choose to make extra payments and reduce the loan term if your financial situation improves.


Higher Total Interest: You’ll pay more interest over the life of the loan.

Slower Equity Build-Up: It takes longer time to build equity in your home.

Decision Making Insight

Choosing between the two largely depends on your financial health and long-term goals. If you’re looking for a lower monthly EMI and expect your income to grow in the future, a 30-year term is suitable. However, if you can comfortably afford higher monthly EMIs and wish to save on total interest costs, a 15-year term is also a solid choice.

At Finansh, we generally recommend opting for a longer home loan tenure and making prepayments as often as possible. There is no prepayment penalty on most home loans in India, thanks to an RBI mandate. This strategy not only provides flexibility in managing your monthly finances but also allows you to reduce the total interest outgo if you pay more than your regular EMI. Choosing a longer term and consistently paying extra each month can help you repay the loan faster and reduce total interest costs.

Always ensure that you assess your financial health, job stability, and future plans. Consulting with Finansh Ex-bankers and leveraging our smart assistant FinBo can provide clarity in making the right decision.

No, certain charges, like Stamp Duty, Registration Charges, and other documentation costs, would not be counted in the property’s value when determining your home loan eligibility. These charges are not realizable, meaning they can’t be recovered later through a sale or other means.

However, one-time costs such as amenities expenses, Township Deposit and maintenance funds, Development charges, Insurance premiums for the property, expenses on electrical fittings, Generator fees, Club membership deposits, Electricity/Water Board deposits, Rooftop Solar Systems, and GST, which are permanent and increase the property’s realizable value, are considered when determining the eligible loan amount.

Yes, when applying for a home loan, you can indeed include certain additional costs.

For the cost of furnishings, interiors, modular kitchens, fixtures, etc., that enhance the realizable value of the property, you can normally add up to 15% of the house/flat’s cost with lender specific upper caps. It’s important to note that while these costs can be added to the agreement value, the final loan amount you’re eligible for will still adhere to the stipulated Loan-to-Value (LTV) ratio we as discussed earlier.

When considering loans specifically for repairs or renovations, the maximum amount varies from lender to lender, but is typically capped at around ₹ 10 lacs.

To calculate your monthly mortgage payments, the traditional way involves complex formulas considering the loan amount, interest rate, and loan tenure. While there are basic calculators available, they often provide only a far guesstimate.

But here’s an easier way: Use FinBo. Simply feed in your loan details, and FinBo offers you a near perfect estimate of your monthly home loan EMI figure.

Loan-to-Income often referred to as EMI/NMI (Total Equated Monthly Installments/Net Monthly Income) or Debt-to-Income ratio is a crucial metric banks use to evaluate your ability to repay a loan. It measures the percentage of your monthly income that goes towards paying existing EMIs (EMIs of all loans you have). A lower EMI/NMI ratio indicates that you have a healthy balance between loans and income.

The acceptable EMI/NMI ratio depends on your income. The ceiling for this ratio varies based on annual earnings, ranging from 20% to 80%. The rationale? While income levels rise, basic living costs often remain relatively static. Thus, individuals with more substantial incomes can comfortably manage higher EMIs.

If your EMI/NMI ratio is high, consider paying off some existing debt or look for additional income sources before applying for a home loan. To increase your eligibility, you can also consider adding an income earning co-applicant to your home loan application.

The age and condition of a property play a crucial role in determining its eligibility for a home loan. Here’s how:

Age of the Property: Older properties normally have a shorter remaining lifespan. Bank’s prefer properties with a longer residual life to ensure they remain a viable security during the home loan’s tenure. Typically, lenders want the property to outlive the home loan’s maturity date by atleast 5 years. Some banks also need to take special internal approvals for sanctioning longer tenure home loans for properties that are older than 15 years.

Property Condition: A well-maintained property stands a higher chance of loan approval. Lenders conduct thorough technical evaluations to gauge the quality, construction standards, and upkeep of the property. If the property seems run-down, it’s perceived as a high risk and can lead to rejection of the home loan application.

Future Value: Banks consider the potential appreciation value of the property. Properties in well-maintained societies or in areas with good development potential are viewed more favorably.

Legal Clearances: For older properties, especially, it’s essential to have clear legal titles without disputes. Any legal entanglements can significantly reduce a property’s eligibility to qualify for a home loan.

Renovations and Improvements: If the property has undergone significant renovations or improvements, it can positively impact its eligibility, especially if these enhancements extend the property’s lifespan or increase its market value.

In summary, while the property’s age and condition are essential, they are part of a more extensive evaluation process. If you’re considering purchasing an older property, it might be wise to first assess its condition and any renovation needs.

With Finansh fulfilled Home Loans, we handle the Builder and Property Due Diligence for you, at no extra cost. Our aim? To make your home buying journey Simpler, Smarter and Stress-free.

Securing a home loan approval largely depends on the lender’s criteria and property specifics.

However, for Finansh-fulfilled loans, we guarantee to save you time and money. You can expect disbursement within 7-10 working days for bank-approved builder projects and 10-21 days for new construction and balance transfer of your existing home loan.

Applying for a home loan online is not only possible but is increasingly becoming the preferred method due to its simplicity and efficiency. Here’s a quick overview:

Online Application: Many banks have an online platform where you can fill out a preliminary application and request for a callback. It will typically require personal, employment, and property details.

Initial Review: After submitting your application, the bank will review your details, check your credit score, and assess your repayment capacity.

Property Verification: The lender will carry out an evaluation of the property in question to assess its value and ensure it’s legally clear.

Loan Approval: Post verification, if everything is in order, you’ll receive an approval or sanction letter detailing the loan terms.

Final Steps: Once you accept the offer, you’ll complete the formalities, sign the agreement, and the loan amount will be disbursed.

While the online route offers convenience, navigating the world of home loans can be intricate. This is where opting for a Finansh fulfilled Home Loan comes into play. We not only simplify the online process but also ensure you get the best terms suitable for your needs and get your home loan home delivered in a spam-free experience. Our expertise is yours, for FREE!


Balance transfer, commonly known as home loan refinancing or home loan takeover in industry lingo, allows you to switch your existing home loan from one bank to another to benefit from better interest rates or other terms. It’s basically like switching to a bank that treats you (and your wallet) better. Here’s how it works and when it might be a good idea.

How It Works?

Look Around: Research and Compare. Don’t settle. Find a bank offering sweeter deals. Our smart assistant, FinBo, simplifies this process, making it even easier than your usual online shopping.

Apply: Found one? Great. They’ll do a quick check on you just like with a fresh loan application.

No Objection: The new Bank will request an NOC (No Objection Certificate) and a loan statement from your current lender showing all the details of your loan.

Sign Off: Just a new agreement with better terms.

The Breakup: Your new Bank pays off your old one. You start paying the new bank.

When to Consider a Home Loan Balance Transfer?

Save Money: Who doesn’t love to save money? If another Bank offers a substantially lower interest rate, transferring can result in significant savings over the loan tenure.

Better Features: More benefits, like top-up loans, higher loan amount, increased tenure etc.

Improved Credit Score: If your credit score has improved since you took out your original loan, you might qualify for better rates.

Feeling less valued?: If you’re not happy with the services, transparency, or responsiveness of your current lender, make the switch.

However, before making the jump, it’s crucial to consider any associated charges, like processing fees or penalties, with both the current and new lender. It’s also advisable to make this decision in the early or middle stages of the loan tenure to maximize benefits.

With Finansh fulfilled home loans, we simplify home loan balance transfer, helping you get the best deal without the fuss.

When refinancing your home loan to a new bank, it’s possible to obtain a higher loan amount for renovations or furnishings, based on eligibility. Additionally, the repayment period can also be extended based on the Bank’s criteria.

Yes, Houses/Flats that are under construction are eligible for balance transfers. However, it’s important to ensure that the construction is progressing without significant delays and the project is on track for completion.

When you refinance a home loan, expect some costs like processing fees, prepayment penalties (if applicable), and legal and property valuation fees. Oh, and don’t forget the mortgage transfer charges! (although minimal, when compared to savings).

Navigating this can feel like a maze, but at Finansh, we’re here to guide you through, making it much easier.

For transferring your home loan to another Bank in India, various documents are essential to authenticate your identity, confirm your income, and validate property details. For a comprehensive list of necessary documents, Click here.


Paying off a home loan faster can save you a significant money in interest over time. Here are some strategies to help you achieve this:

Increase EMI Amount: If your income increases, consider paying a higher EMI than what was originally set. This directly reduces the principal amount and, in turn, the future interest.

Make Prepayments: Whenever you have surplus money, like a bonus or any windfall gains, use it to make a prepayment on your home loan. Most banks allow prepayments without any penalty.

Switch to a Lower Interest Rate: Refinance your loan if you find a bank offering a lower interest rate. Over time, even a slight reduction in interest can result in substantial savings.

Check the health of your existing Home Loan Now. Our intelligent assistant, FinBo, evaluates your current loan terms and identifies the best available offers to help save you lakhs – all in under 3 minutes.”

If you unintentionally miss a single EMI, two primary outcomes arise:

  1. Penalty Fees: Banks often charge a late fee, usually around 2% of the overdue amount.
  2. Credit Score Dip: Your credit score takes a hit. However, if you promptly settle the missed payment, it recovers in due time.
If you miss 3 EMIs consecutively, banks categorize the loan as an NPA (Non-Performing Asset). This acts as a red flag, indicating you are having trouble. This situation, being quite serious, leads to:
  1. Heavier Interest: Unpaid EMI amounts accumulate in your outstanding loan balance, meaning you’ll bear both the interest and penalties on these amounts until settled.
  2. Legal Proceedings: Persistent defaults can compel the bank to initiate legal actions to recover the owed amounts.
  3. Property Risk: Given that home loans are secured against the property, defaults may lead the bank to either seize or auction the property to recover their funds.

Apart from the daunting stress, missing Loan EMIs can have severe repercussions. It’s always recommended to reach out to your bank proactively if you foresee difficulty in paying an upcoming EMI. In certain situations, the bank might be willing to renegotiate the loan terms, such as extending the tenure or restructuring the loan, especially if you are facing genuine financial hardships.

If you’re struggling to make payments on a home loan you got through Finansh, don’t wait. Talk to your Finansh Expert before it becomes a bigger issue. We’ll work closely with you and your bank to sort things out.

When floating interest rates move up or down, it has a direct impact on your loan EMI. Here’s how banks typically respond:

In case of Upward movement in interest rate, you have three options:

EMI Increase: One option is to increase your EMI to adjust for the higher interest.

Extend Repayment Tenure: Banks offer to increase your loan tenure while keeping the EMI unchanged. Generally, if the interest rate increases, banks automatically adjust the loan tenure to accommodate this change, keeping EMIs unchanged.

Lump-Sum Payment: An alternative is to allow you to make a lump-sum payment, which keeps the EMI the same but reduces the principal.

In case of Downward Movement in Interest Rates, instead of reducing the EMI, banks normally keep your EMI unchanged and shorten the repayment tenure, helping you pay off the loan faster.

Yes, you can adjust your EMI in some situations. By making an extra payment, you can reduce the outstanding home loan amount and ask the Bank to step-down the remaining EMIs.

Many banks also offer Step-up EMIs products, such as SBI Flexi Pay, PNB GenNEXT etc., where your EMI starts low and gradually increases, helping those who expect their income to grow over time.

If you’re struggling with current EMIs, you can opt for a home loan restructuring to adjust the amount. However, it’s ideal to always keep 3-6 Months EMIs in a contingency fund for unexpected events and talk to your bank about the best options.

If your Home Loan is Finansh Fulfilled, reach out to your dedicated Finansh Expert for practical and actionable solutions.

Yes, in India, most banks allow borrowers to switch from a fixed-rate home loan to a floating-rate mortgage once during the loan tenure. However, the reverse switch, from floating rate to fixed rate, is usually not permitted. Notably, many major banks now only offer floating rates due to their flexibility and alignment with market trends.

Considering a switch? Chat with FinBo for tailored expert advice.

If you wish to sell your home before clearing the home loan, here’s what typically happens:

Loan Clearance: Before property ownership can be transferred, the outstanding loan amount must be cleared. Usually, the sale proceeds directly help in repaying the loan. Some banks facilitate this process through an escrow account, where the buyer’s payment is held until the loan is paid off. Once cleared, the bank issues a No Objection Certificate (NOC) and returns the original property documents. Once the NOC is obtained, you can complete the property ownership transfer to the buyer.

Taxation on Sale of Property: Selling your house can result in capital gains. If you’ve owned the property for 2 years or less, it’s treated as short-term capital gains (STCG). If held for more than 2 years, it’s considered as long-term capital gains (LTCG). For LTCG, you can claim exemptions under Section 54 of the Indian Income Tax Act if you reinvest the sale proceeds to buy another house either 1 year before the sale or 2 years after or construct another house within 3 years of sale.


Home Loan Insurance is an optional coverage that settles the outstanding Home Loan in case of unforeseen events like death. While it is not mandatory, it’s advisable to have one for peace of mind.

However, our Finansh experts recommend that instead of a specific home loan insurance, you can also consider buying a term insurance cover of your choice, as it offers broader coverage and flexibility.

Yes, when you secure a home loan, it is mandatory to get the property insured. Here’s why and what you need to know:

Coverage Scope: Your property should be insured against risks like fire, riots, earthquakes, lightning, floods, and more.

Choice of Provider: While you need comprehensive coverage, you’re free to pick any insurance company of your choice and not only the one the Bank is offering.

Insurance Premium: To ease your financial load, the one-time insurance premium can be part of your loan amount. This way, you can pay for the insurance in EMIs.

When to Get Insurance: For flats or villas built by developers, get the insurance once the property is complete and you have taken possession. If it is an independent house under construction, consider insurance when you receive your first home loan installment.

Remember, property insurance isn’t just a bank requirement; it’s peace of mind ensuring your home and investment are protected against unforeseen events.

The property insurance premium can vary based on several factors. Here’s a breakdown of what majorly influences your property insurance premium:

Value of the Property: The higher the value of your property (in terms of its construction cost), the higher the insurance premium, as the potential payout in the event of a claim would be larger.

Location: Properties in areas prone to natural disasters (e.g., flood zones, earthquake-prone regions) have higher premiums. Conversely, properties in gated communities with security and fire safety systems enjoy lower premiums.

Type and Age of the Construction: Older buildings or those made with less durable materials normally attract higher premiums due to a perceived higher risk. Modern buildings with state-of-the-art design and quality often have lower premiums.

Coverage Type: Comprehensive policies covering a wide range of risks (fire, theft, natural disasters, etc.) will have higher premiums compared to basic policies covering only specific risks.

Deductibles: A deductible is an amount you agree to pay out-of-pocket before the insurance kicks in. Choosing a higher deductible can lower your premium, but it means you’ll bear a larger portion of the loss should something unfortunate happen.

Policy Add-ons and Endorsements: Additional coverages or endorsements, like coverage for valuable items inside the property or liability protection, will increase the premium.

Duration of the Policy: Some insurers offer discounts for policies taken for longer durations or if the premium is paid in a lump sum upfront.

Insurer’s Underwriting Criteria: Each insurance company has its own method for calculating risk and determining premiums. Thus, rates can vary widely among providers for the same property.

It’s always wise to shop around, get multiple quotes, and consult with reliable insurance agents to understand the best coverage for your property and how premiums are determined.

For your present peace of mind and your family’s future security, planning for unforeseen events affecting your home loan repayments is vital. Here’s your preparation guide:

Term Life Insurance with Critical Illness Rider: Life’s twists and turns are unpredictable. Term Insurance is your protective net. Opt for a policy covering beyond just your loan, ensuring your loved ones are always secure. Adding a rider for critical illnesses or permanent disability offers them a buffer to manage EMIs during trying periods.

Home Loan Insurance: When Term Insurance seems burdensome (especially as premiums climb with age), Home Loan Insurance becomes a beneficial alternative. This acts as a safeguard from the weight of EMIs during unforeseen challenges, providing your family with a breather.

Health Insurance: In the face of escalating medical expenses, comprehensive health insurance becomes indispensable. It shields you from abrupt, hefty bills. It’s prudent to secure this early on, as premiums notably escalate with age.

Emergency Fund: Picture this as your financial umbrella for rainy days. Stock away atleast 3-6 months of expenses, inclusive of EMIs. It’s a cushion against sudden financial turbulence.

Opt for a Longer Loan Tenure: This means lower EMIs from the start, giving you breathing room during tough financial periods. As conditions improve, prepayments can help cut down the loan term.

Regularly Review & Update Insurance: It’s essential to adjust your insurance as loan terms evolve and your income grows. Equally important? Ensuring your family is well-informed about these policies.

Will & Estate Planning: Create a lucid blueprint. A well-structured Will ensures your wishes are honored, offering your family a path free from disputes.

Wrapping up, our sincerest advice is simple: Prioritize your family’s comfort and security. Continually assess your financial plans, and tweak as life unfolds, ensuring those you love are properly cared for.

If your property suffers damage due to natural calamities, here’s how it can affect your home loan:

EMI Obligation: Your responsibility to pay EMIs remains unchanged, regardless of property condition.

Insurance Payout: If you have property insurance, it should cover damage repairs or reconstruction. Any surplus after settling the loan might be used for further repairs or refunded. If the insurance doesn’t cover all costs, you’ll need to cover the remaining loan amount.

Government Aid: For large-scale disasters, the government often offers financial support or relief measures. Stay updated on such initiatives.

Almost all Indian Banks mandate property insurance when sanctioning home loans. If you haven’t got it yet, it’s a good idea to do so. It protects against unexpected damages.


The financial health of a builder is crucial when buying a home as it assures the project’s timely completion. Here’s why it matters:

Project Completion: A financially strong builder is less likely to face delays or abandon projects, ensuring you don’t face unexpected hassles.

Financial Stability: Such builders can better manage unexpected time and cost overruns or funding delays, ensuring the project’s quality and safeguarding your investment.

Legal Clearance: Builders in good financial standing usually secure all necessary legal clearances, ensuring clear and undisputed property titles – a vital aspect while buying a home.

Quality and Resale Value: Financially stable builders maintain high construction standards, enhancing your property’s value and resale potential.

Trust and Confidence: These builders inspire confidence among banks and buyers. They’re more likely to honor commitments even in unforeseen situations.

Reputation: Their reputation, built on financial stability and positive feedback, can influence a bank’s decision to approve home loans for their projects faster.

To sum it up, for peace of mind and a smooth home-buying process, it’s better to choose a builder with robust financial health and a good market reputation.

With Finansh-fulfilled Home Loans, we handle property and builder due diligence for you, at no extra cost.

If your builder delays the handover of your property, among other troubles, your home loan becomes more expensive due to added interest.

If there’s a very long delay, think about changing your loan terms with the bank or considering a different property.

RERA (Real Estate Regulation and Development Act) protects homebuyers against such delays. If the builder is late, they must either pay you for the delay or give your money back with interest. Builders also need to give regular updates and get buyer consent for any expected delays.

Always talk to your bank if there is a delay. They may offer certain concessions or solutions based on their policies and the delay duration.

If your home loan is Finansh fulfilled, we handle the builder due diligence for you and provide expert support from our ex-bankers during any builder related delays or defaults.

Let’s break down the differences and explore the pros and cons of both types of loans offered in India:

Fixed-Rate Home Loan

In a Fixed Rate Home Loan, the interest rate remains consistent throughout the loan’s tenure.


Consistency: Your Monthly EMIs remain consistent, making it easier for you to budget and plan your finances.

Protection from Interest Rate Hikes: Even if market interest rates rise, your loan interest remains unaffected.

Peace of Mind: You’re protected from the volatility of changing market rates, providing a sense of financial security.


Higher Rates: Fixed-rate home loans often have higher interest rates compared to prevailing floating rate home loans.

Loss of Potential Savings: If market interest rates drop, you miss out on the decreased interest benefit.

Note: For a fixed rate loan, the interest rate may be locked in for the whole loan duration or just a part of it. If it’s entirely fixed, your EMI remains unchanged. However, if fixed for a specific period (usually 3 years), ensure to ask the bank about potential scenarios leading to an interest rate hike post this phase (known as the ‘reset clause’ in banking terms).

Floating-Rate Home Loan (or Adjustable-Rate Home Loan)

This rate is linked to the bank’s internal benchmarks, like the MCLR, or external ones such as RBI Repo Rate, leading to periodic adjustments based on economic conditions. This rate typically reflects any RBI-driven interest rate changes but can also vary due to change in a bank’s operational costs.


Potential for Lower Initial Rates: Floating rate Home Loans interest rates are normally set lower than present fixed rate Home Loans.

Opportunity for Savings: When market interest rates decrease, so does your home loan interest rate, resulting into potential long-term savings.

Beneficial in a Falling Interest Rate Scenario: Beneficial in a Falling Rate Scenario: Floating Rate Home Loans are especially preferable when the economy is growing, and interest rates are decreasing.


Vulnerability to Rate Hikes: If market rates surge, your interest rate, and in turn your EMIs, will increase.

Potential for Higher Long-Term Cost: In an economic scenario where interest rate are consistently rising, you might end up paying more over the loan’s tenure.

Decision Making Insight

Choosing between a fixed and a floating rate home loan comes down to your financial strategy and risk tolerance. If you prefer stability and are risk-averse, a fixed-rate might be more appealing. But if you are open to navigating market changes for potential savings, a floating rate might be more suitable.

One key thing to remember: Your choices might be restricted if you’re leaning towards a fixed-rate loan. Many Indian banks now only provide floating-rate home loans. Hence, while fixed rates might sound appealing, their limited availability can be a deciding factor.

Lastly, always keep an eye on your home loan’s health. Periodic checks can help you decide if you should continue with the current rate type or consider switching to capture potential benefits.

Use our intelligent assistant, FinBo, to assess your existing Home Loan’s health. It’s Free. Try it out!

In India, the method of calculating the interest on loans can be based on the daily reducing balance or the monthly reducing balance. Let’s break down the difference and what it means for you:

Daily Reducing Balance

With this method, the principal amount on which interest is calculated is updated every day. If you make a prepayment on your loan, the principal reduces from the very next day, and interest is calculated on this reduced amount.

Example: If you have a ₹10 lakh loan and you repay ₹1 lakh on the 10th of the month, from the 11th day onward, interest is calculated on the reduced principal of ₹9 lakhs.

Monthly Reducing Balance

In this system, the principal amount is updated at the end of the month. This means if you repay a part of your loan during the month, the benefit of the reduced interest will only apply from the next month.

Example: Using the same ₹10 lakh loan, if you repay ₹1 lakh on the 10th, interest for the entire month is still calculated on ₹10 lakhs. Only in the 1st day of the next month will the interest be based on the reduced ₹9 lakhs.

Which is better?

If you are someone who is likely to make frequent prepayments, the daily reducing balance is always more beneficial as it reduces your interest outgo immediately after the prepayment. However, always be sure to check the actual interest rates and other terms and conditions because even with a daily reducing balance, if the interest rate offered by a Bank is much higher, it might not be as beneficial.

The disbursement of a home loan aligns with a property’s construction stage:

Initial Disbursement: After loan approval, the bank releases a sum based on the current construction phase.

Phase-wise Payments: As construction progresses, the bank disburses funds to the builder or contractor upon completion of specific milestones such as completion of the foundation, walls, roofing, etc.

Final Disbursement: Upon nearing completion and after necessary verifications, the bank releases the remaining amount.

The location of your property can significantly influence your home loan approval. Banks often have a list of preferred projects and localities, making loans for properties in these areas smoother to process.

If you’re eyeing a spot in a well-known area or a prime location with good facilities around, you might find it easier to get a home loan. But if your chosen place has some legal tangles or is in an area the bank’s wary about (maybe due to environmental concerns or other reasons), it might be a bit of a challenge.

Also, areas with upcoming development projects can positively impact a lender’s decision. Always ensure your chosen location aligns with both your needs and the Bank’s criteria for a seamless loan approval process.

Just so you know, with Finansh-fulfilled Home Loans, we handle property and builder due diligence for you, at no extra cost.

In India, if you’re facing challenges securing a home loan from traditional banks due to cash salary, irregular income, or a low credit score, there are still a few alternatives you might consider:

  1. Housing Finance Companies (HFCs): HFCs like LIC Housing Finance, PNB Housing Finance etc. have more flexible home loan approval criteria compared to traditional banks. They cater especially to individuals with non-traditional income sources and offer home loans based on the overall profile of the applicant, considering factors beyond just income and credit score.
  2. Peer-to-Peer (P2P) Lending: There are several P2P lending platforms in India where individuals can borrow from other individuals. Now under RBI’s purview, they provide more lenient lending criteria compared to traditional banks, though at higher interest rates.
  3. Cooperative Societies/Sahakari Banks: Prominent in many Indian states, these member-driven institutions typically have flexible loan criteria, catering especially to needs of the local communities.
  4. Microfinance Institutions: Especially designed for low-income individuals, these institutions offer loans which you can use to build your home.

Always remember, while these avenues might offer you a home loan, the interest rates are usually higher due to the perceived risk. It is essential to read and understand all terms and conditions and ensure that you are getting a fair deal.

Don’t hesitate to Book a Free Consultation with a Finansh Home Loan Expert to get unbiased advice that’s really on your side.

Employment consistency matters to lenders. Typically, short job breaks, up to 3 months, won’t raise eyebrows. Being on a renewable contract is also seen positively. But, if you’ve had longer gaps in employment, lenders may seek justification.

In the Indian context, Home Loan Agents, Counsellors, and Direct Selling Agents (DSA) play similar roles. They serve as intermediaries, helping borrowers navigate the process of securing home loans from banks and other financial institutions. While their titles vary, their primary objective is consistent: simplifying the loan application journey for aspiring homeowners.

However, it’s essential to note that these agents often operate under varied commission structures with different banks and often face sales target pressures. As a result, their recommendations might be influenced by the commission they receive or the urgency to meet certain sales quotas, rather than what’s truly in your best interest.

Due to this commission-driven mindset, coupled with limited understanding of banking intricacies and personal financial planning, it becomes extremely important to select the right bank first before settling on an agent or DSA.

Decision Making Insight

At Finansh, we pride ourselves on our team of experienced ex-bankers who are genuine experts in the field. We don’t hold Direct Selling Agent licenses ourselves, ensuring we remain unbiased. The selection criteria for both our ex-bankers and field agents (DSA Partners) are rigorous, ethical, and always with a customer-first approach.

Our commitment is to guide you with unwavering integrity and deep expertise on your Home Loan journey.


Yes, you can use gift funds for your down payment, provided they come from a close relative or a defined source as per the bank’s criteria. It’s essential, however, to have proper documentation for these gifts to ensure transparency and adherence to regulations.

Apart from gift funds, there are a few other ways to manage your down payment:

Savings and Investments: Regular savings, planned investments like fixed deposits, or selling off existing investments can help generate funds for down payment.

Loan against Assets: Taking a loan against assets like gold, fixed deposits, mutual funds or insurance policies can be a way to manage your down payment.

Down Payment Assistance Programs: Although new, a few platforms offer down payment assistance to homebuyers in India. This is something similar to taking a personal loan in exchange for your home equity. However, we recommend thoroughly reviewing the terms and conditions before proceeding.

Employer Loan or Advance: Some employers provide interest-free loans or advances, which can be used for housing purposes.

Loan from Friends and Family: Borrowing from trusted friends or family helps when buying a home, though we advise to have clear terms and proper repayment plans to maintain healthy relationships.

Certainly! Banks and NBFCs do provide home loans to self-employed individuals. They focus on the stability of your income, not just its regularity.

Need Help! Connect with a Finansh Home Loan Expert Now.

Obtaining a home loan on a modest income is not out of reach. While many banks typically require a minimum net monthly income (NMI) of about ₹8000, your actual eligibility might differ based on various factors. If your income is on the lower side, you may qualify for a smaller loan amount.

However, you can boost your eligibility by adding an earning family member as a co-applicant. Additionally, several government schemes in India cater specifically to low-income individuals or first-time homebuyers.

But remember, while it’s tempting to aim high, it’s crucial to set realistic expectations and choose homes within your budget. This not only increases your chances of loan approval but also ensures financial comfort in the long run.

For a clear understanding of your eligibility and options, use our smart assistant FinBo. And always keep in mind: it’s not just about how much you earn, but how smartly you plan.

A moratorium period in home loans is like hitting the “pause” button on your principal EMI repayments. You won’t pay off the main chunk of your loan during this time, but you will cover the interest part, often termed as Pre-EMI. Think of it as a breather from your full EMI.

Building a home isn’t done overnight. If you’re getting a place constructed or buying an under-construction property, a moratorium can be your financial cushion. It gives you a break on EMIs while you still pay rent. Once you move into your new house and stop paying rent, you can use that money for your full EMIs.

Let’s understand How moratoriums are offered by banks:

New Home Loans: For under-construction township projects and residential complexes, moratorium is provided between 18 to 48 months, based on number of floors in the building.

Ready Properties: For a ready-to-live-in place, the regular repayments usually begin within two months post loan disbursement.

For Construction: From the time the first loan installment is handed out, you could get a moratorium of up to 48 months or up till 2 months post-construction completion, whichever comes first.

Opting for a moratorium should be a well-thought-out decision. While they offer short-term relief (especially if you’re sandwiched between rent and waiting for your home to be ready), the accumulating interest can stretch your loan period and up the total amount you pay. Embrace it if it suits your immediate financial strategy, but keep an eye on its long-term effects.

Moratorium’s Relationship with Credit Score

Taking a moratorium doesn’t affect your credit score as it’s not considered a missed payment or a default. However, failing to pay the Pre-EMI during moratorium period will dent your credit history.

Pre-EMI is when you pay only the interest on the part of the home loan that the bank gives out during your property’s construction. It’s like a mini-payment before the regular full payments (EMIs) kick in.

Here’s a quick guide:

Stage-wise Disbursements: For under construction homes, banks release the loan in bits, not all at once.

Only Interest: During Pre-EMI, you pay interest on what the bank has given out, not the whole loan.

Principal Paused: The main loan amount, called the principal, stays the same in this phase. You’ll start reducing it when full EMIs begin.

Full EMIs Start: Once your home is built and the bank gives out the entire loan, your regular EMIs (including interest and principal) begin.

Example: If the bank gives out 40% of your loan during construction, your Pre-EMI is interest on just that 40%.

In short, pre-EMIs lighten your load as your new home takes shape. But remember, during this time, the main loan amount does not decrease. It’s a way to ease you into the full payments.

Yes, in India, you can avail of a special kind of loan known as a “land loan” or “plot loan” to finance the purchase of a residential plot or land on which you intend to construct a house.

Loan Purpose: It is only for buying a plot with intention to build a house.

LTV (Loan-to-Value): You can typically borrow 60%-75% of the plot’s value.

Construction Time: You’re required to complete the construction within 5 years of the first loan disbursement.

Conversion to Home Loan: The plot loan can be converted to a regular home loan provided that the construction completes within the stipulated 5 years and a completion certificate is provided.

Loan for Construction of House: You can also apply for a Home Loan for construction of house in the plot financed by the Bank, subject to fulfilling certain criteria.

Absolutely, you can use a home loan to finance the purchase of a second home or an investment property. However, if you already own two houses, either singly or jointly, and wish to buy a third, the loan for the third house is generally categorized as a Commercial Real Estate (CRE) Home Loan. Interest rates for CRE Home Loans are typically slightly higher than those for regular home loans.

Quick Tip: If your third house purchase is an upgrade (say, moving from a smaller to a larger house, or relocating to a more favorable location), and you intend to sell one of your existing houses within six months of acquiring the third, it won’t be treated as a Commercial Real Estate (CRE) Home Loan.

When it comes to taxation, the interest on the loan for your first home can be claimed as an income tax deduction. But for the second home, while you can still claim a deduction on the interest, the house will be considered as ‘let out’, and the rental income will be added to your taxable income.

A ‘top-up’ home loan is an additional amount you can borrow on your existing home loan. While a regular home loan funds the purchase or construction of a property, a top-up loan is used for purposes like home renovation or meeting other personal needs. Given that home loans generally have lower interest rates when compared with personal loans, a top-up can be especially beneficial during pressing financial needs. Essentially, it’s like increasing your current loan based on the home’s present value and your home loan repayment history.

Yes, in India, several banks offer discounted interest rates for women borrowers. Additionally, some Indian states provide discounts on stamp duty and registration charges to promote home ownership among women.

Use our smart tool FinBO, to instantly discover these exclusive discounts.

What is a home loan overdraft facility?

A home loan overdraft facility is a special feature that some banks offer. It allows you more freedom with how you manage your home loan payments, by combining the flexibility of a savings account with your home loan. This type of account lets you put extra money into your home loan account when you can, and take some out the extra when you need to.

How it Works?

EMI stays the same: You still have to pay your monthly EMIs, just like with a normal home loan. That part doesn’t change.

Special Features: The best part about this account is that you can add extra money whenever you want, even if it’s just for a day. Doing this cuts down the amount of interest you’ll have to pay later on.

There might come a time when you need some money for other purposes (or an unexpected expense). With this unique account, you can take the extra amount you previously added. However, always remember, your regular monthly amount still needs to be added and cannot be taken out.

Difference from Prepayment: When you make a prepayment in a regular Home Loan, you are adding extra money to the home loan account and reducing your loan amount, but you can’t take this money back out. With the overdraft facility, you have the option to withdraw the extra money as and when needed. So, prepayment is a one-way action, while overdraft offers two-way flexibility.

A Real-world Scenario: Let’s say your EMI is Rs. 10,000 a month. One month, you get some extra money and put in an extra Rs. 50,000. This helps you because now you owe the bank less money, and they’ll charge you less interest. But what if next month you need Rs. 40,000 for an emergency? No worries. You can take out the extra Rs. 40,000 you put in and still keep paying your Rs. 10,000 EMI.

Things to keep in mind

A Bit More Expensive: This interest rate in this special account is slightly higher (normally 0.25% to 0.5%) than a regular home loan. While the flexibility is great, it’s essential to factor in this cost when making your decision. Over the long term, even a slight rate difference can add up.

Perfect for Varied Incomes: It’s particularly beneficial for those who receive frequent bonuses, or for businesspeople and the self-employed who might have variable income. Even for those with stable salaries, directing your paycheck into this account could offer benefits. Your money would essentially be ‘working’ for you until you need it for expenses, reducing your home loan interest more effectively than letting it sit in a low-interest salary account.

The home loan overdraft facility offers you both flexibility and control. While it may come with a slightly higher interest rate, the benefits often outweigh the costs.

For more insights or if this feels like the right choice for you, our team at Finansh can help guide the way.

Yes, most banks and financial institutions in India offer specialized home loan schemes tailored for NRIs (Non-Resident Indians). While these loans are fundamentally similar to regular home loans available to Indian residents, the documentation required and processing timelines differ slightly to cater to the unique needs of NRIs.

If you’re an NRI considering a property investment in India, at Finansh, we’re well-equipped to guide you through this process, ensuring a hassle-free experience tailored to your needs.

Got unanswered questions? Shoot us an email at support[at]finansh[dot]in. We’ll get back with an answer within 24 hours.