What Is a Home Loan?
A Home Loan is a secured loan provided by banks and housing finance companies to purchase, construct, or renovate a residential property. In 2026, home loans remain one of the most affordable borrowing options due to lower interest rates and long repayment tenures.
The property purchased using the loan acts as collateral. Because of this security, home loans offer significantly lower interest rates compared to personal or unsecured loans.
Key Features of Home Loans in 2026
- Lower interest rates compared to unsecured loans
- Loan tenure up to 30 years
- High loan amount eligibility
- Tax benefits under applicable laws
- Available for salaried and self-employed borrowers
- Balance transfer facility available
Home Loan Interest Rates in 2026
Home loan interest rates depend on factors such as credit score, income profile, employment type, and lender policies.
| Lender Type |
Interest Rate Range (p.a.) |
Processing Fee |
Maximum Tenure |
| Public Sector Banks |
8.25% – 9.50% |
Up to 0.50% |
30 years |
| Private Banks |
8.50% – 10.00% |
0.50% – 1% |
30 years |
| Housing Finance Companies |
8.75% – 11.00% |
Up to 1% |
25 – 30 years |
Home Loan Eligibility Criteria
- Age between 21 and 65 years
- Stable income source
- Credit score of 700 or above
- Indian resident or eligible NRI
- Property must meet lender valuation norms
Documents Required for Home Loan
- Identity and address proof
- Income proof (salary slips or ITR)
- Bank statements of last 6 months
- Property documents
- Sale agreement and approved building plan
Home Loan EMI Example
If you take a home loan of ₹50,00,000 for 20 years at an interest rate of 8.75%:
- Monthly EMI: ₹44,300 (approx.)
- Total interest payable: ₹56,32,000 (approx.)
- Total repayment amount: ₹1,06,32,000 (approx.)
Advantages and Disadvantages of Home Loans
Advantages
- Affordable EMIs due to long tenure
- Tax-saving opportunities
- Helps build long-term assets
Disadvantages
- Long-term financial commitment
- Property acts as collateral
- Interest cost is high over long tenure
How to Choose the Best Home Loan in 2026
- Compare interest rates and total loan cost
- Check floating vs fixed rate options
- Evaluate prepayment and foreclosure charges
- Choose optimal tenure to reduce interest burden
- Maintain a strong credit score
Frequently Asked Questions (FAQs)
What is the maximum tenure for a home loan?
Most lenders offer a maximum tenure of up to 30 years.
Can NRIs apply for a home loan?
Yes, many Indian banks provide home loans to eligible NRIs.
Is prepayment allowed on home loans?
Most floating-rate home loans allow prepayment without penalty.
Does credit score affect home loan approval?
Yes, a higher credit score improves approval chances and interest rates.
Can I transfer my home loan to another bank?
Yes, balance transfer is allowed if better terms are available.
Author: All Finance Store Research Team
Expertise: Home Loans, Banking & Housing Finance
Last Updated: January 2026
Disclaimer: This page is for informational purposes only. Home loan terms, interest rates, and eligibility criteria vary by lender and borrower profile. Always verify details from official lender sources before applying.