Here is everything you need to know if you apply for a home loan of Rs. 30 lakhs.
Depending on how much capital you have saved to buy a home, you will decide your home loan amount. This decision must be made after carefully understanding the monthly monetary expense you will shoulder as a home loan equated to monthly instalment (EMI).
In its Home Loan EMI series, Housing News is trying to assist new home buyers to understand the implications of home loans of specific values. In this article, we would discuss the EMI implications of an Rs. 30 lakhs home loan.
Rs. 30 lakhs home loan eligibility
Banks follow a definite set of regulations before approving home loan applications of any amount. The major factors considered include:
Age: Home loans are offered to people over 18 years of age. Certain banks have increased the minimum age limit to 21 years.
Residency: All banks in India offer home loans to resident Indians. A large number of banks also offer housing finance to non-resident Indians.
Income: Since home loans are all about money, the bank considers your income generation history to ensure it is not investing in a probable defaulter. Whether or not the bank will offer you an Rs. 30 lakhs loan will depend on whether or not you would be able to pay the EMIs for the Rs. 30 lakhs loan.
Loan-to-value ratio: Banks offer up to 80% of the property value as a home loan. This means that Rs. 30 lakh loan will be sanctioned on a property value of Rs. 37 lakhs 50 thousand. It is important to note that even if you can comfortably pay the monthly EMI because of a high income, the bank would still not grant more than 80% of the property value because of the loan-to-vale-ratio norms.
Credit score: Your credit score plays a major role in the sanction of the Rs. 30 lakhs home loan. Your credit score will also determine the interest you will have to pay on your home loan. All leading banks in India offer their best rate to customers with a credit score of over 800.
Rs. 30 lakh home loan EMI
On approval of your home loan application, banks will give you the choice to select the loan repayment period or loan tenure. For home loans, the oft-used loan tenure is 15, 20 and 30 years. Some borrowers also choose a 10-year home loan repayment tenure. During this period, a specific EMI amount is deducted from your salary account into your home loan account. Those opting for a long tenure, pay a lower EMI amount for their Rs. 30 lakhs home loan while those selecting a shorter tenure pay higher monthly EMIs.
Suppose the bank is offering home loans at 6.5% annual interest. You will have to pay the following monthly EMI, based on your loan tenure:
EMI on an Rs. 30 lakhs home loan for 30 years
|Rs. 30 lakhs||30 years||6.5%||Rs. 18,962|
EMI on an Rs. 30 lakhs home loan for 20 years
|Rs. 30 lakhs||20 years||6.5%||Rs. 22,367|
EMI on an Rs. 30 lakh home loan for 15 years
|Rs. 30 lakhs||15 years||6.5%||Rs. 26, 133|
EMI on an Rs. 30 lakhs home loan for 10 years
|Rs. 30 lakhs||10 years||6.5%||Rs. 34, 064|
Choose your loan tenure for an Rs. 30 lakhs home loan, depending on your monthly income. Be advised not to use more than 40% of your monthly income as your home loan EMI payment. Also, note that the home loan EMI amount might change with a change in interest rates.
Rs. 30 lakhs home loan documents
Banks ask you to submit several documents along with your home loan application. These include:
Identity proof: Driving licence, passport, Aadhaar card or voter ID
Address proof: Driving licence, passport, Aadhaar card, utility bills
Income proof: Last 3 months’ salary slips, last 6 months’ bank statements, latest Form-16 and IT returns
Property documents: Copy of allotment letter/buyer agreement, sale deed
This list is not all-inclusive since banks might demand a different set of documents, depending on the personal profile of the applicant.
Tips to get Rs. 30 lakhs home loan
- Make sure your monthly income is sufficient to repay the EMI comfortably
- Keep all the paperwork ready
- Be ready with your contribution to the property purchase. The more money you are contributing to the sale, the more confident the bank is in lending credit to you