10 Lakh Home Loan EMI & Interest Rate

A home loan of ₹10 lakh is a common financial tool used in India for purchasing or constructing residential property. This loan amount can cater to various needs, such as buying a new home, renovating an existing one, or as a part of a larger financing plan for more expensive properties. The specifics of a ₹10 lakh home loan, including the interest rate, tenure, and EMI, can vary based on the lending institution, the borrower's creditworthiness, and prevailing market conditions. Prospective borrowers should consider their repayment capacity, compare offers from various banks and financial institutions, and use online EMI calculators for an accurate understanding of their financial commitment. Factors like processing fees, loan-to-value ratio, and additional charges should also be considered to understand the full financial implications of the loan.

Features and Benefits of 10 Lakh Home Loan

Following are the features and benefits of  ₹10 lakh home loan:

• Competitive Interest Rates: Interest rates may vary based on the lending institution, the borrower’s credit score, and market conditions. They can be either fixed or floating.
  
• Loan Tenure and Amount: Principal amount and repayment tenure may differ based on the lender’s guidelines and the borrower’s eligibility. The loan amount is set at 10 lakh, while the duration for paying it back can range from 5 to 30 years.
  
• Affordability: A loan of 10 lakh is relatively small, making it more affordable for a wider range of income groups.
  
• Tax Benefits: Under sections like 80C and 24(b) of the Income Tax Act in India, borrowers can avail of tax benefits on the principal and interest components of the loan.
  
• Balance Transfer Facility: Many lenders offer the option to transfer the outstanding loan balance to another lender offering lower interest rates.

10 Lakh Home Loan Eligibility Criteria

Lenders have specific criteria in place to ensure that only deserving individuals apply for home loans of such a significant amount. Both self-employed individuals and those with a regular salary are eligible to apply for home loans, although the requirements differ slightly for each group. Those considering a home loan should review the eligibility criteria provided below:

• The applicant must be an Indian citizen.
• A salaried applicant must be between 23 to 65 years.
• A self-employed applicant must be between 23 to 75 years old.
• A CIBIL Score of 725

Factors Affecting 10 Lakh Home Loan EMI

The EMI for a loan of Rs 10 lakh is influenced by three key factors that are the loan amount, interest rate, and loan duration. It is important to understand how these factors, along with other factors, can affect the amount paid in EMIs.

• Loan-to-Value Ratio: The LTV Ratio is the portion of a property’s worth that lenders finance with their home loans. The remaining value of the property must be covered by the home loan applicants themselves, either through a down payment or margin contribution. Potential home loan applicants need to be aware that the RBI has set a maximum LTV ratio of 90% for home loans up to Rs 10 lakh. However, banks and housing finance companies have the flexibility to determine the LTV ratio for their home loan applicants based on various factors, such as their credit score, ability to repay, credit history, the market value of the property, and loan amount.
• Home Loan Tenure: Most lenders offer home loan repayment tenures of up to 30 years. Loan applicants need to limit their total EMI payment to within 55%-60% of their net monthly income. By using UM’s home loan EMI calculator, applicants can determine the ideal loan repayment tenure and EMIs based on their repayment capability.
• Interest Rate: This is one of the most significant factors. The interest rate can vary depending on the lender and your credit profile. A higher interest rate increases the EMI and vice versa.

Documents Required for 10 Lakh Home Loan

• Identity Proof (e.g., Aadhar, PAN Card)
• Address Proof
• Salary Slips / Business Income Proof
• Bank Statements
• Property Documents
• Credit Score Report

10 Lakh Home Loan Processing Fees & Other Charges

When you decide to take out a home loan, there are additional costs that banks require you to pay during the approval and processing phases. These fees, while not impacting your monthly loan payments of 10 lakh, it is recommended that you become acquainted with them in advance. Some examples of these charges consist of:

• Fee for Application: The application fee is a single payment that is not refundable and is charged when you submit your request for a service. After your request is accepted, this fee is subtracted from the processing fees, leaving you with only the remaining balance to pay.
• Default Charges: If repayment is not made and legal action becomes necessary, a fee for collection or recovery will be added. This fee is usually calculated based on the real expenses incurred, along with an extra penalty percentage.
• Late Payment Facility: Paying your EMIs on time is important to avoid incurring late payment penalties. These fees typically range from 2% to 3% of the remaining loan balance.
• Stamp Duty: This is a government tax levied on the mortgage agreement. The rate varies from state to state in India.
• CERSAI Charges: The Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI) charges a nominal fee for registering the loan agreement.
• GST: Goods and Services Tax (GST) is applicable on various charges like processing fees, legal fees, etc.

10 Lakh Home Loan EMI For 5 Years

The following table includes the EMI for 10 lakh home loan for 5 years at 8.5% p.a interest rate.

10 Lakh Home Loan EMI For 10 Years

The below mentioned table showcases the EMI for 10 lakh home loan for 10 years at 8.5% p.a interest rate.

10 Lakh Home Loan EMI For 15 Years

This below table showcases the EMI for 10 lakh home loan for 15 years at 8.5% p.a interest rate.

10 Lakh Home Loan EMI For 20 Years

The below mentioned table includes the EMI for 10 lakh home loan for 20 years at the interest rate of 8.5% p.a.

10 Lakh Home Loan EMI For 25 Years

The below mentioned table show you the EMI for 10 lakh home loan for 25 years at 8.5% p.a interest rate.

10 Lakh Home Loan EMI For 30 Years

The following table showcasing the EMI for 10 lakh home loan for 30 years at 8.5% p.a interest rate.

Note: The above EMI calculation is for reference only and as per the current housing loan interest rates. This calculation is done using Housing Loan EMI Calculator offered by Urban Money.

Important Key Points to Consider While Taking 10 Lakh Home Loan

When considering a home loan of 10 lakh rupees, it is important to pay attention to several key points to ensure that you make an informed and financially sound decision. Here are some important factors to consider:

• • Loan-to-Value Ratio (LTV): Understand the maximum loan amount you can get against the value of the property. Usually, banks finance around 75-90% of the property’s value.
    
  • Interest Rate: Compare interest rates offered by different lenders. Even a small difference in the interest rate can significantly impact the total amount repaid over the tenure of the loan.
  • Loan Tenure: When deciding on a loan tenure, it is important to consider the trade-off between lower monthly payments and higher total interest paid over time. A longer tenure results in lower EMIs but higher overall interest payments, while a shorter tenure leads to higher EMIs but lower total interest paid. It’s important to choose a tenure that aligns with your financial goals and retirement plan.
  • Tax Benefits: Be aware of the tax benefits available on home loan repayments under various sections of the Income Tax Act, like Section 80C for principal repayment and Section 24 for interest repayment.
  • Repayment Flexibility: Check if the lender allows repayment flexibility, like part-prepayments without charges and EMI holidays. These features can be helpful during financial ups and downs. By using a home loan prepayment calculator, you can better understand how the terms offered by different lenders will affect your monthly EMIs.

Tips to Minimise Your 10 Lakh Home Loan EMI

To secure lower monthly payments for a home loan of 10 lakh, individuals can take control of several factors. By following these recommendations, you can decrease the amount you need to pay each month.

• Floating-rate loans often start with a lower interest rate compared to fixed-rate loans, but they are subject to market fluctuations. This can work in your favour when interest rates are decreasing.
  
• By increasing the duration of your loan, you have the option to spread out the payments over a greater period, resulting in a reduction of the monthly instalments.
  
• By making a larger initial payment, the loan amount is reduced, resulting in a decrease in the monthly instalment. Additionally, this reduces the total amount of interest paid throughout the loan.
  

Each of these strategies comes with its own set of considerations, so it is important to evaluate them in the context of your financial situation and long-term goals.