Loans
How to Get a Home Loan in India: Eligibility, Documents, and Rate Negotiation
A step-by-step guide to getting a home loan — understanding eligibility, choosing the right lender, gathering documents, negotiating the best rate, and accounting for all costs beyond EMI.
Read with the publication date in mind. Portal requirements and rates can change. How to report a correction.
Buying a home is the largest financial decision for most Indian families. A home loan makes it accessible — but navigating lenders, documentation, rate negotiation, and hidden costs without guidance is expensive and stressful. This guide covers the complete home loan journey.
Step 1: Know Your Eligibility
Banks use FOIR — 40–50% of net monthly take-home as maximum total EMI. If your net salary is ₹80,000 and you have a ₹10,000 existing EMI, your home loan EMI budget is ₹30,000–40,000. At 8.75% for 20 years, this translates to ₹31–42L in loan.
CIBIL score: 750+ for best rates; 700–750 for standard approval; below 700 often results in rejection. Check your score free once a year at cibil.com.
Use our Home Loan Eligibility Calculator for a precise number before approaching any bank.
Step 2: Compare Lenders and Negotiate
Get quotes from 3 sources: your salary bank, one PSU bank (SBI, Bank of Baroda — typically lowest rates), and one private bank or NBFC (faster processing).
A 0.25% rate reduction on ₹50L over 20 years saves ₹3.1L in total interest. Get competing offers in writing and negotiate with your preferred lender.
Ensure the loan is REPO-linked (EBLR) — when RBI cuts rates, your loan rate reduces automatically.
Step 3: Documentation
Salaried: last 3 months salary slips, 6-month bank statement, Form 16/ITR for 2 years, KYC documents, employment proof.
Self-employed: last 3 years ITR with computation, CA-certified balance sheet and P&L, 6–12 month bank statement.
Property: sale deed/agreement, encumbrance certificate, property tax receipts, approved building plan.
Step 4: Account for All Costs
Stamp duty + registration: 4–8% of property value depending on state (Karnataka 5% + 1%, Maharashtra 5% above ₹10L). Separate from home loan, payable in cash.
Interiors: Budget ₹5–15L for basic fittings, flooring, kitchen, paint for a 2BHK. Not financed by home loan — have personal savings ready.
Total ownership cost: home loan principal + total interest (20-year tenure at 8.75% roughly doubles the principal) + stamp duty + registration + interiors + society deposits.
Use these tools next
Keep working on Konnect2Tools
Open the matching calculator or PDF tool next — no account required.
Search all tools