Home loan

Looking for a home loan? Check out the lowest interest rates based on credit score

Buying a house is one of the biggest financial decisions, and the first thing we ask ourselves is how to finance it. Home loans are one of the best options to fund your home purchase, and a low-interest home loan is what all applicants look for while applying. There are many factors affecting home loan interest rates, and credit score is one of the most important factors that can impact the interest rate. Certain banks offer home loans based on credit scores.  

Impact of Credit Scores on Home Loan Interest Rates

Many lenders consider credit score as an important factor while deciding the interest rate for the applicant. They consider it as a benchmark for the future repayment capability of the applicant. Let’s look at the impact of credit scores on home loan interest rates.

Higher credit scores can get a low rate of interest however there are other factors that affect the calculation of home loan interest rates. One should always try to maintain a higher credit score to get an attractive interest rate.

 

Top Banks and Home Loan Interest Rates Based on Credit Scores

Below is a diagram that explains the interest rates offered by different banks in a nutshell. We will then look at the offerings by each bank in detail based on credit scores. 

 

HDFC Bank Home Loan Interest Rates

HDFC Bank Special Home Loan Rates
Adjustable home loan rates
Loan slab Interest rate
Credit score 800+ 8.20%
Rest 8.40%-8.90%
HDFC Bank Standard Home Loan Rates
Adjustable home loan rates
Loan slab Interest rate
Women (up to 30 lakhs) 8.60%-9.10%
Rest (up to 30 lakhs) 8.65%-9.15%
Women (up to 30.01 lakhs to 75 lakhs) 8.85%-9.35%
Rest (up to 30.01 lakhs to 75 lakhs) 8.90%-9.40%
Women (75.01 lakhs and above) 8.95%-9.45%
Rest (75.01 lakhs and above) 9.00%-9.50%

 

ICICI Bank Home Loan Interest Rates

ICICI Bank Festive Home Loan Rates
Adjustable home loan rates
Loan slab Interest rate for Salaried Interest rate for Self-employed
Credit score 800+ 8.75% 8.75%
Credit score 750-800 8.75% 8.85%
ICICI Bank Standard Home Loan Rates
Adjustable home loan rates
Loan slab Interest rate for Salaried Interest rate for Self-employed
Up to 35 lakhs 9.70% 9.85%
35 lakhs to 75 lakhs 9.70% 9.85%
Above 75 lakhs 9.70% 9.85%

 

SBI Home Loan Interest Rates

SBI Standard Home Loan Rates
Adjustable home loan rates
Credit Score Interest rate
800+ 8.55%
750-799 8.65%
700-749 8.75%
650-699 8.85%
550-649 9.05%
No CIBIL Score 8.75%

 

LIC Housing Finance Home Loan Interest Rates

LIC Housing Finance Home Loan Rates
Adjustable home loan rates
Credit score Interest rate
800+ (Up to 15 crores) 8.30%
750-799 (Up to 15 crores) 8.40%-8.60%
700-749 (Up to 15 crores) 8.70%-8.90%
600-699 (Up to 15 crores) 8.95%-9.30%
Less than 600 9.40%-9.80%

 

PNB Housing Finance Home Loan Interest Rates

PNB Housing Finance Home Loan Rates
Adjustable loan rates
Credit Score Interest rate for Salaried Interest rate for Self-employed
800+ 8.75%-9.25% 8.99%-9.49%
775-799 8.80%-9.30% 9.25%-9.75%
750-775 8.95%-9.45% 9.40%-9.90%
725-750 9.25%-9.75% 9.85%-10.35%
700-725 9.55%-10.05% 10.15%-10.65%
650-700 10.65%-11.15% 11.25%-11.75%
up to 650 10.85%-11.35% 11.45%-11.95%
CIBILTM > 170 10.90%-11.40% 11.45%-11.95%
CIBILTM <=170 10.20%-10.70% 10.80%-11.30%

 

Bank Of Maharashtra Home Loan Interest Rates

Bank of Maharashtra Home Loan Rates
Adjustable home loan rates
Credit Score Interest rate for Salaried Interest rate for Self-employed
For loans up to 30 lakhs    
800+ 8.00% 8.20%
750-799 8.40%0 8.65%
700-749 8.70% 8.75%
650-699 9.00% 9.10%
600-649 9.05% 9.35%
Below 600 9.50% 9.85%
-1 to 05 8.90% 9.15%
For loans above 30 lakhs    
800+ 8.00% 8.20%
750-799 8.40% 8.65%
700-749 8.70% 8.85%
650-699 9.05% 9.20%
600-649 9.10% 9.50%
Below 600 9.70% 10.20%
-1 to 05 9.05% 9.50%

 

Punjab National Bank Home Loan Interest Rates

Punjab National Bank Home Loan Rates
Adjustable home loan rates
Credit Score Interest rate for Salaried Interest rate for Self-employed
For loans up to 30 lakhs    
800+ 8.70% 8.70%
750-799 8.70% 8.70%
700-749 8.85% 8.85%
600-699 9.20% 9.20%
For loans above 30 lakhs    
800+ 8.55% 8.55%
750-799 8.60% 8.60%
700-749 8.75% 8.75%
650-699 9.10% 9.10%

 

Kotak Bank Home Loan Interest Rates

Kotak Bank Standard Home Loan Rates
Adjustable home loan rates
Loan slab Interest rate for Salaried Interest rate for Self-employed
Up to 5 crores 8.30% – 9.00% 8.41% – 9.10%

 

Citi Bank Home Loan Interest Rates

Citi Bank Standard Home Loan Rates
Adjustable home loan rates
Loan slab Interest rate for Salaried Interest rate for Self-employed
Up to 10 crores 8.00% onwards 8.00% onwards

 

IDFC Bank Home Loan Interest Rates

IDFC Bank Standard Home Loan Rates
Adjustable home loan rates
Loan slab Interest rate for Salaried Interest rate for Self-employed
Up to 5 crores 8.75% onwards 9.00% onwards

 

Home Loan EMI Calculator

Before you take a home loan, know how much EMI you are going to pay. Even though the interest rate is low, the EMIs may be high. You must be able to repay your EMIs on time. Else, your credit score will be impacted negatively. You can use a home loan EMI calculator to compute the EMI with ease. 

Home loan calculation needs three inputs

  • Loan amount
  • Loan tenure
  • interest rate

EMI is: EMI = P × r × (1 + r)n/((1 + r)n – 1) where P= Principal amount, r= rate of interest, n=Tenure (in months)

For e.g., if P = 75,00,000, R = 12%, T = 10 Years, the calculation will be as below:

7500000 × 0.01 × (1 + 0.01)120/ ((1 + 0.01)120 – 1) 

EMI for this example will be Rs. 1,07,603 per month

 

Types of Interest Rates in Home Loans

The bank can charge a Fixed or Floating rate of interest on home loans. 

Fixed Interest Rate – In the fixed interest rate method, the interest rate remains the same throughout the tenure of the loan. The advantage is the interest rate and your outflow of money doesn’t change. You also do not pay more if the rate of interest goes up.

Floating Interest Rate – In the floating interest rate method, the interest rate changes with the current lending rates of the bank. The benefit, in this case, is if the interest rates go down, your outflow of money will also go down.

Factors that Determine the Calculation of Home Loan Interest Rates

  • Credit Score – A higher credit score can get you a low-interest rate. A good credit history also means that your financial discipline is good and you will more likely repay the loan within time.
  • Income A stable and sufficient income definitely gives more confidence to the lender in your repayment ability. Working for a good organization also means that you have job security and hence a steady income.
  • Loan AmountThe higher the loan amount is, the lower the rate of interest should be. Of course, it is affected by other factors as well.
  • Employment Type Banks have different interest rates for salaried and self-employed people.
  • Tenure of the loan – The longer the tenure of the loan is, the lower the interest rate should be. 
  • Geographical location of the property – If the property is located in a prime location, the value of the property ought to be high. In such cases, the rate of interest offered by the bank will be low. 

Conclusion 

The rate of interest for home loans depends on many factors. A good credit score can definitely help get a lower interest rate, all other factors being constant. One should try to maintain a good credit score in order to enjoy a lower interest rate.

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