Home Loan Guide for India: Eligibility, Documents, Costs, Process and How to Choose a Lender

For most families, a home loan is the largest financial commitment of their lives. A good deal can save lakhs, while a rushed one can strain the budget for twenty years. This guide takes you through eligibility, documents, the real costs and the steps from application to disbursement.

How much loan can you get?

Lenders look at your income, existing EMIs, age, credit score, job stability and the property's value. A common approach limits total EMIs to about 40% to 50% of your net monthly income. As an example, with a take-home income of ₹1,00,000 and no other EMIs, a lender may allow an EMI of up to ₹40,000 to ₹50,000, which at 9% over 20 years supports a loan of roughly ₹4,445,798 to ₹5,557,248. Check your own figure with the loan eligibility calculator and the loan affordability calculator.

Loan to value and down payment

Under RBI rules, the maximum loan as a share of the property value (LTV) depends on the loan size. Smaller loans can finance up to 90% of the value, mid-sized loans up to 80% and larger ones up to 75%. You must fund the rest as a down payment, plus costs such as stamp duty, registration and brokerage, which are not covered by the loan. Check the current limits with your lender.

What it really costs

Documents you will need

• Identity and address proof: Aadhaar, PAN, passport or voter ID.
• Income proof: salary slips for 3 to 6 months, Form 16, bank statements and ITRs for the last 2 to 3 years for self-employed applicants.
• Property documents: sale agreement, title deed, approved plan, builder's allotment letter and no-objection certificates.
• Photographs, application form and processing fee cheque.

The process, step by step

1. Check your credit report and fix issues. See our credit score guide.
2. Get a pre-approval from two or three lenders to know your budget.
3. Select the property and verify the title, approvals and builder's track record, including RERA registration for new projects. See the RERA guide.
4. Apply and submit documents. The lender verifies you and the property.
5. Receive the sanction letter and read the terms carefully.
6. Sign the agreement, pay your share and register the property.
7. Disbursement: for a property under construction, money is released in stages linked to construction progress, and you pay pre-EMI interest on the amount disbursed.

Choosing a lender

• Compare the interest rate and what it is linked to, and how often it can change.
• Compare all fees, not only the rate. Use the loan comparison calculator.
• Check customer service and the ease of prepayment.
• Ask about women co-borrower benefits, which some lenders offer along with some states' stamp duty concessions.

Joint loans and tax

A co-borrower who is also a co-owner can share the repayment and the tax deductions under the old regime. Deductions apply to the principal and interest you actually repay, within limits. See our home loan tax benefits guide.

Mistakes to avoid

• Stretching to the maximum eligible loan.
• Ignoring the cost of furnishing, maintenance and moving.
• Skipping a legal check of the property title.
• Not keeping an emergency fund after the down payment. Read about building one.
• Not comparing renting with buying. Use the rent vs buy calculator.

Rules, rates and fees change regularly. Verify them with the lender and official sources before committing.

Pre-EMI, floating rates and what changes over time

If you buy an under-construction flat, you may pay only interest on the amount disbursed until possession; this is called pre-EMI. Full EMIs start after the final disbursement, so budget for paying both rent and pre-EMI during construction. Floating-rate loans are linked to an external benchmark, and when it moves your lender must reset your rate, typically every three months. Ask whether a reset changes your EMI or your tenure, because a rate rise silently adding years to the loan is a common surprise. Keep a small buffer so that a one-percentage-point rate rise does not strain your budget.

Finally, remember the non-loan costs of owning: maintenance charges, property tax, insurance and repairs often add up to a meaningful share of annual running costs. Include them when comparing buying with renting.

Frequently asked questions

How much home loan can I get?

It depends on income, existing EMIs, credit score and property value. Lenders often cap total EMIs at 40% to 50% of net income.

What is LTV?

Loan to value is the share of the property price the lender will finance. RBI sets maximum limits based on loan size.

Can I get a loan for an under-construction property?

Yes, with disbursement in stages and pre-EMI interest in the meantime.

Is there a prepayment charge?

Generally not for floating-rate loans to individuals, but check your terms.

Which documents are needed?

Identity, address, income and property documents.

Should I choose a longer tenure?

A longer tenure lowers the EMI but raises the total interest, so pick the shortest you can afford.

Last reviewed 8 November 2026. Rates, limits and rules change, so confirm figures with the official source before you act.