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Top Home Loan Best Bank in India 2023

Home Loan Best Bank in India

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Top Home Loan Best Bank in India 2023 comparison on the basis of ease of services

Home Loan Best Bank in India
Home Loan Best Bank in India

Top Home Loan Best Bank in India 2023

Taking a home loan is one of the most important financial decisions for many people in India. With numerous banks and housing finance companies offering home loans, it can be confusing to decide which one offers the best home loan deal. This article looks at the top banks for availing a home loan in 2023 based on interest rates, processing fees, flexi options and other benefits.

Interest Rates Offered

Interest rate is perhaps the most important factor while availing a home loan. Here are some of the banks offering the lowest interest rates on home loans currently:

  • SBI: Offers interest rates starting from 8.15% for loans up to Rs. 30 lakhs and 8.25% for loans above Rs. 30 lakhs. SBI also offers special discounted rates for women borrowers.
  • HDFC: Interest rates start from 8.25% onwards for loans up to Rs. 30 lakhs. For women borrowers, rates start from 8.15%.
  • ICICI Bank: Rates start from 8.25% for loans up to Rs. 75 lakhs. For loans above Rs. 75 lakhs, rates are 8.30% onwards.
  • Bank of Baroda: Offers rates beginning 8.25% for loans up to Rs. 30 lakhs. For higher loan amounts, rates start from 8.35%.
  • Kotak Mahindra Bank: Home loan interest rates begin from 8.25% p.a. onwards. Lowest rates for women borrowers.

Processing Fees and Other Charges

Apart from interest rates, processing fees and other charges also impact the overall cost of your home loan. Here are some banks with low fees:

  • PNB Housing: Has a processing fee of only 0.25% of the loan amount + taxes. Lowest among major housing finance companies.
  • LIC Housing Finance: Charges a processing fee of just 0.25% of the loan amount + GST for home loans.
  • Tata Capital: Offers highly competitive processing fees of 0.25% of the loan amount plus applicable taxes.
  • ICICI Bank: Has a moderate processing fee of upto 1% of the loan amount plus applicable taxes.
  • Axis Bank: Charges a processing fee of 1% of the loan amount plus GST.

Flexible Repayment Options

Some banks offer flexibility in home loan repayment which can help ease your financial burden. These include:

  • HDFC Bank: Offers flexible repayment options like Step Up Repayment Facility to help ease your monthly installments.
  • ICICI Bank: Provides the Flexi Edge facility enabling you to underpay EMIs by 25% to 100% once in 6 months.
  • Kotak Mahindra Bank: Offers the Flexi Pay Option to increase or decrease EMI by 25% twice during the loan tenure.
  • HSBC Bank: Provides Flexi Loan facility allowing you to make lower EMI payments initially and higher payments later.
  • IndusInd Bank: Has the Flexi Link facility allowing you to pay only interest component in the initial years.

Prepayment Charges

Many people foreclose their home loans earlier than the full tenure. Some banks have zero or minimal prepayment charges which can save you money in such cases.

  • State Bank of India: Zero prepayment charges if you foreclose from own funds. Else, charges 2% of loan foreclosed.
  • Bank of Baroda: No prepayment penalties on floating rate home loans. For fixed rates, charges 2% on the prepaid amount.
  • PNB Housing Finance: No prepayment charges if you close from own funds. Else, charges 2% of the outstanding amount.
  • HDFC: Charges prepayment penalty of 2% of principal outstanding for floating rates and 4% for fixed rates.
  • LIC Housing Finance: Charges a low prepayment fee of just 0.5% on the outstanding loan amount.

Special Benefits for Women Borrowers

Some leading banks provide special concessions for women borrowers such as lower interest rates and processing fees.

  • SBI: Offers 5 bps lower interest rates for women borrowers compared to regular rates.
  • HDFC: Provides 10 bps discount on home loan interest rates for women borrowers.
  • ICICI Bank: Zero processing fees for women applicants irrespective of loan amount.
  • Axis Bank: Waives 50% of the applicable processing fee for women borrowers.
  • Kotak Mahindra Bank: Offers 10 bps lower rates to women borrowers on home loans up to Rs 3 crores.

Doorstep Services

Many banks now offer doorstep services for home loan processing and documentation to provide convenience to customers.

  • HDFC: Provides doorstep document pickup and assistance with eKYC-based loan applications.
  • ICICI Bank: Offers home loan processing and disbursal at your doorstep through mobile branches.
  • Axis Bank: Provides doorstep service for document verification, pickup and assistance with eKYC-based applications.
  • Tata Capital: Offers to send an executive to your home for loan application formalities and document collection.
  • IndusInd Bank: Has doorstep document pickup and assistance for paperless applications using Aadhaar-based eKYC.

Digital Application Process

Several banks now provide a quick and paperless digital home loan application process for added convenience.

  • HDFC Bank: Offers an end-to-end digital home loan application journey with minimal documents.
  • Kotak Mahindra Bank: Provides online home loan application with upload of digital copies of KYC documents.
  • ICICI Bank: Lets you apply online by uploading soft copies of income documents and fill details in a digital application form.
  • Yes Bank: Offers a seamless digital home loan application through website/app along with tracking of application status.
  • IDFC First Bank: Provides an entirely paperless home loan application using Aadhaar-based eKYC.

FAQs on Best Banks for Home Loans in 2023

Q1. Which bank offers the lowest interest rate on home loans currently?

Currently, SBI offers the lowest interest rates starting from 8.15% onwards for home loans up to Rs. 30 lakhs.

Q2. Which bank charges the lowest processing fee on home loans?

Banks like PNB Housing Finance, LIC Housing Finance and Tata Capital currently charge a processing fee of only 0.25% of the loan amount plus taxes – the lowest among major housing finance companies.

Q3. Which banks offer prepayment friendly home loans?

Banks like SBI, Bank of Baroda, PNB Housing and LIC Housing have minimal prepayment and foreclosure charges, making them prepayment friendly.

Q4. Which banks offer special benefits for women home loan borrowers?

Banks like SBI, HDFC Bank, ICICI Bank, Axis Bank and Kotak Mahindra Bank offer special concessions for women like discounted interest rates, lower processing fees etc.

Q5. Which banks offer doorstep services for home loan processing?

HDFC Bank, ICICI Bank, Axis Bank, Tata Capital and IndusInd Bank are some banks providing doorstep services for home loan processing and documentation.

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