Housing Finance Companies (HFCs) are a part of Non-Banking Financial Companies (NBFCs) that offer home loans. You can use the home loan to buy a new property or to renovate and repair your house. However, with so many HFCs offering home loans, it is wise to compare the interest rates, tenure, approved loan amount and other charges.
Here’s a list of 8 Housing Finance Companies offering home loans. Check and compare before you decide on one. Keep reading!
|SL. No.||Name of the HFC||Minimum Interest Rate||Processing Fees||Eligibility|
|1.||Navi||8.39%||*Check the app||Age: 21-65|
Income criteria: Salaried or self-employed
|2.||HDFC||8.60%||0.50% of the loan amount or Rs. 3,000 (whichever higher)||Age- 21 to 65|
Minimum income- Rs 10,000 p.m or Rs. 2 lakhs p.a.
|3.||LIC Housing Finance||8.30%||0.5% of the loan amount subject to a minimum of Rs. 5000 plus GST||The loan term can be up to 10 years post-retirement|
Salaried, self-employed or applicants wanting extended loan terms can apply
|4.||PNB Housing Finance||8.40%||1% of the loan amount (min- Rs.10,000)||Age must not be above 70 years|
Minimum salary- Rs. 15,000
|5.||Union Bank of India||8.80%||0.5% of the loan amount||Minimum entry age is 18 years and maximum exit age is up to 75 years.|
Individuals may apply singly or jointly with other eligible individuals.
Rate of Interest (P.a)
Loan Tenure (Years)
Your credit score is a primary factor that reflects the chances of you repaying your home loan. A credit score below 600 can result in higher interest rates, while a higher score (750 and above) provides you with the best loan terms. Hence, you should always try to know your credit score and improve it before applying for a loan.
If you buy a house in a prominent location, you can get lower interest rates due to reduced risks for the lender. These properties are often pre-sanctioned, making it even easier for you to get loans.
The loan to value ratio is a proportion of the value of a given property sanctioned for a home loan. Taking a loan with a lower LTV ratio and higher down payment will get you better rates.
Floating rates are generally 1-2% lower than fixed-rate but fluctuate with changing base rates. When base rates are lower, you can enjoy lower interest charges with a floating rate.
Housing finance companies are non-banking financial institutions involved in aiding the construction or refurbishing of residential or commercial properties. These loans can be availed by businessmen or employed professionals.
Apart from providing home loans, Housing Finance Companies also provide loans against property. The tenure may vary from anywhere between 15 to 30 years based on the repayment capacity of the borrower.
Navi offers digital personal loans, home loans, mutual funds and health insurance. Currently, Navi is the best NBFC for home loan and offers the best interest rates on home loans starting at 8.39% p.a. of up to Rs. 10 crore for both independent houses and apartments as well. Download the Navi app and get a home loan with minimal documentation.
HDFC is the largest housing finance provider in India, with a total sales of Rs. 109,052 crores and a market cap of Rs. 422,652 crores. Founded in 1977, this HFC has developed an extensive network of 546 offices reaching all towns and cities. It also has offices in London, Dubai and Singapore, providing home loans to NRIs (Non-Resident Indians) and Persons of Indian Origin.
Established in 1989, LIC Housing Finance Ltd was a pioneer of housing finance in India. Today, it boasts of a network of 273 marketing offices and around 13,343 intermediaries. It provides home loans for purchase, construction, extensions, repairs and plot purchases, as well as financing for existing properties.
PNB Housing Finance Ltd. is a housing finance company promoted by Punjab National Bank. Launched in 1988, it has a presence across the country, providing options for both loans and deposits. Its total sales are around Rs. 8,623 crores, while its market cap is around Rs. 7,298 crores.
Founded in 2000 by Sameer Gehlaut’s Indiabulls group, this is India’s second-largest private HFL. It has disbursed more than Rs. 2.47 lakh crores worth of loans and served more than a million customers. The company has over 220 branches in 110 towns and cities in India and also has offices in London and Dubai.
AAVAS Financiers Ltd. is a retail finance provider based in Rajasthan. Founded in 2011, it has expanded to 166 branches across 11 states in India. It focuses on the underserved niche of low and middle-income populations living in semi-urban and rural areas.
Housing and Urban Development Corporation Ltd (HUDCO) is a premier public sector enterprise (PSU) in the field of housing and infrastructure development. The company provides housing finance, funds infrastructure projects and promotes sustainable habitat development.
Set up by Canara Bank in 1987, this is India’s first HCF to be floated by a nationalised bank. The company’s main objective is to promote homeownership via 163 branches all over the country. It has generated total sales of Rs. 1,890 crores and has a market cap of Rs. 5,304 crores.
There are two types of interests provided by the HFCs. They are as follows:
Depending on the capabilities of the borrower, the loan repayment tenure can be long-term or short-term. The following are the prime factors when deciding the repayment tenure:
You can choose to repay your loan sooner than the decided tenure. Here are the ways in which you can be debt-free as soon as possible:
You may want to carefully evaluate your loan requirements before choosing the best housing finance companies for your financial needs. HFCs and NBFCs are ideal for those who fall short of the strict eligibility criteria of banks. These are also good for those who want quicker access to funds.
Ans: HFCs are NBFCs that primarily provide home loans and allied financial products. They often offer less stringent eligibility criteria and quicker processing time than banks.
Ans: Currently, Navi offers the best interest rates starting at 7.39% per annum. You can apply for a loan through both online and offline channels.
Ans: Taking a loan from HFC has its pros and cons. Their interest rates are pegged to prime lending rates, which are sometimes higher than that of banks. Moreover, they may carry more processing fees and penalties.
Ans: Yes. Any financial institution will check your income stability to make sure that you can repay the loan without any hassles.
Ans: Floating interest rates are best when the interest rates fall. Fixed rates work well when home loan interest rates in the market increase.
Ans: Earlier, the National Housing Bank used to regulate the housing finance companies in India. In 2019, due to some discrepancies in debt payments, the Reserve Bank of India took over the regulation of housing finance companies.
Ans: Housing finance companies are registered under the Companies Act, 2013.
Are you looking to buy that house you’ve been eyeing 🏠 and you need a loan of up to ₹5 crore. Install the Navi app now and get instant in-principle approval right away! Interest rates starting at 8.74% p.a.
Disclaimer: This article has been prepared on the basis of internal data, publicly available information and other sources believed to be reliable. The information contained in this article is for general purposes only and not a complete disclosure of every material fact. It should not be construed as investment advice to any party. The article does not warrant the completeness or accuracy of the information, and disclaims all liabilities, losses and damages arising out of the use of this information. Readers shall be fully liable/responsible for any decision taken on the basis of this article.
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