A home of one’s own’ remains one of the few aspirations of every Indian customer and very often than not, a home Loan offers them an easy way to finance this aspirational purchase.
When it comes to home loans, there are many banks and housing finance companies that offer loans on easy interest rates and repayment tenures.
HDFC home loans
HDFC, being an early entrant to the area of home finance is by far the largest housing finance company, having helped finance 4.9 million homes over the last three and half decades. They have 366 offices servicing about 2400 cities and towns of India.
HDFC offers a range of housing loan ranging from purchase/construction of new/resale homes, plot loans, home extension to premises for working professionals. They also offer loans to non-resident Indians.
Being a company dedicated exclusively to housing finance, HDFC scores by charging a reasonable rate of interest and a flat processing fee. They also offer a faster processing time for their home loans.
HDFC offers the facility of pre-approved loans which lets the customer knows his eligibility prior to selecting a property to purchase.
ICICI home loans
ICICI Bank is India's largest private sector bank with total assets of Rs. 5,946.42 billion at March 31, 2014 and profit after tax Rs 98.10 billion for the year ended March 31, 2014. ICICI Bank currently has a pan-India network of 3,845 Branches and 12,012 ATMs.
Entering the home loan segment in early-2000s, the bank has made tremendous strides in advancing home loans. This year, the bank’s home loan grew by 25%over last year.
ICICI bank offers preferential rates of 10.10% to its women borrowers whereas for men it is 10.15%. The bank also doesn’t charge any legal verification fees from its customer if the project is pre-approved.
ICICI Bank also provides insurance cover on its home loans.
In addition to home loans, both the lenders also provide loan against property which allows customers to unlock the value of their immovable assets like houses, plots and buildings.
Both the lenders provide the option of fixed and floating interest rates to their customers and the option to switch from one to another against payment of some fees.
Both lenders also offer the facility to customers to pre-pay the home loans.
Tax savings on home loans
Indian home loan customers can save tax under various provisions of the Income Tax Act by availing home loans. If both spouses are working and are co-applicants, they may gain from such tax deductions.
A customer can save up to Rs 1 lakh on the principal and Rs 150,000 on the interest of the home loan by way of taxes.
Both HDFC and ICICI facilitate such tax savings by readily issuing home loan statements to their customers and building tax calculators on home loan components in their marketing materials/websites.
Though both banks offer reasonable interest rates, easy documentation and faster processing time for home loans, ICICI bank may be slightly advantageous for women customers with its preferential interest rate offer of 10.10%right now.
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