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A home loan is probably the most famous and sought-after loan. Typically in India, it is even more important considering the Indian importance of having one's own house.
Banks are the sole authority of different types of loan and home loan is one of them. In this article, we'll be listing out some banks which are offering the lowest interest rates currently on home loans. We'll also be describing the tax implications and benefits of opting for home loans in India.
Banks with minimum interest rates
The upcoming RBI monetary policy's official statement is making industry observers believe that an interest rate hike is imminent in the near future. This has put home loan interest rates in the spotlight right now.
The home loan is most likely the longest-term loan a person will take in their lifetime, and the home loan interest rate plays a significant role in deciding which lender to borrow from. Because the interest rate on a home loan is determined by a variety of factors such as tenure, whether a person is salaried or not, and so on.
List of Banks with the lowest interest on home loans
| Bank of Maharashtra | 6.4% PA |
| UCO bank | 6.5% PA |
| Indian Bank | 6.5% PA |
| Bank of Baroda | 6.5% PA |
| Bank of India | 6.5% PA |
| Panjab National Bank | 6.5% PA |
| Panjab and Sindh Bank | 6.5% PA |
| IDFC | 6.6% PA |
| Union Bank of India | 6.6% PA |
| ICICI | 6.7% PA |
| Kotak Mahindra | 6.55% PA |
| Union Bank | 6.60% PA |
| Canara Bank | 6.65% PA |
When you take out a home loan, you will be charged a monthly fee for the reimbursement of principal and interest, which is known as the Equated Monthly Installment (EMI).
The EMI, or Equated Monthly Installment, is the amount you will pay to the bank on a regular basis until the loan is paid off completely. It includes both the principal and the interest charged, which is spread out over the specified term.
Tax benefits on loan
Borrowers of home loans are eligible for specific tax benefits on both the principal and interest components of their loans under the Income Tax Act of 1961. Under current laws, you are eligible for an income tax credit for interest repayments up to Rs 1,50,000/- per year. Additionally, you may be eligible for additional tax savings under Section 80 C on principal repayments of up to Rs. 1,00,000 per year.
Thought there are not very big differences all more than 6% PA to less than 7% PA.
According to Bankbazaar.com, the cheapest home loans are offered by the government-owned lender Bank of Maharashtra. Its annual interest rate for a 20-year home loan of Rs 75 lakh is 6.4 percent, with an equated monthly installment of Rs 55,477.
It offers home loans at the lowest possible interest rate. A number of public sector banks, including Punjab & Sind, Punjab National Bank, UCO Bank, Indian Bank, Bank of Baroda, and Bank of India, offer home loan borrowers an interest rate of 6.5 percent. The EMI for home loan borrowers from these banks will be Rs 55,918. This is for a Rs 75 lakh loan with a 20-year repayment period.
On a list of ten cheapest home loan providers, Kotak Mahindra Bank is the only private sector lender. Its lowest home loan interest rate is 6.55 percent, with an EMI of Rs 56,139. Union Bank of India is the next major PSU on the list. Borrowers of the bank's home loans pay an interest rate of 6.60 percent. This equates to an EMI of Rs 56,360 for a Rs 75 lakh loan with a 20-year term. Canara Bank's housing loan interest rate is slightly higher than Union Bank of India's, at 6.65 percent. A monthly loan installment of Rs 56,582 is required.
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