Not only the banks but even the housing finance companies (HFCs) are vying against each other in the home loan segment of India. The market is changing every second with a constant variation in the interest rates ever since 2015.
To start with, there was a deluge of rate reduction from HFCs besides banks. However, since 2018, the trend has reversed completely with rates getting raised every month or so. And looks like the pattern is likely to continue further.
Since the focus remains mostly on the banks and customers lose on the opportunity to get a loan from HFCs, we have worked out an article putting the top three housing finance companies – LIC Housing Finance, Indiabulls and DHFL – for a discussion to find which gives you a better chance to buy your dream i.e. a home.
What is the Home Loan Interest Rate Charged by the Trio?
The setting of home loan interest rates depend on the income, credit score, the loan amount applied, as well as the repayment potential one would have. LIC Housing Finance, Indiabulls and DHFL charge an interest rate of 8.60%-8.95%, 8.70%-9.45% and 9.05%-9.95%, respectively. On the interest rate front, LIC Home Loan remains the most affordable of the three.
Which Wins on Loan Amount?
The loan amount from LIC would depend on the cost of the property. While a loan of up to ₹20 lakhs can be granted at about 85% of the property cost, the loan amount between ₹20-75 lakhs would most likely be financed at 80% of the property cost. On the other hand, loans above ₹75 lakhs would be offered at 75% of the property cost. In contrast, Indiabulls and DHFL can grant a finance equivalent to 75%-90% of the property value. These two offer slightly more than what LIC does.
What About the Processing Fee?
The fee, which is generally levied at about 0.25%-1% of the loan amount with the applicable GST over it, must be a top consideration for you. As this is the case of a home loan, which is most likely to be big in number, the processing fee that you pay upfront can be on the higher side. And so, a concession on it can be a true dream enabler.
DHFL charges a fee of ₹2,500 plus GST, while LIC Housing Finance takes out a sum of ₹5,000 for loans of up to ₹1 crore and ₹10,000 for loans more than ₹1 crore. The fee charged by Indiabulls is not stated by the lender. Considering the information, DHFL is found to be offering loans at less fee compared to the other two.
Shall You Use Home Loan EMI Calculator?
The Home Loan EMI Calculator is a mathematical tool that you should use and supervise its function carefully. Particularly, in the case of a home loan that runs for 20-30 years invariably, a clear picture of the repayment in advance lets you plan better and pay on time.
The calculator, true to its name, computes the Equated Monthly Installment (EMI). Besides, it helps to compute the interest that would go through the EMIs. All that you need to do is to enter the values of the loan amount, tenure and the rate of interest at prescribed spaces in the calculator to draw a repayment summary. So, start putting the loan variables of the three HFCs discussed today to find which actually can turn out to be affordable for you.