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Current Home Loan Interest Rates - May 2024

Bajaj Housing Finance offers attractive Home Loan interest rates starting from 8.50%* p.a. for salaried individuals. Borrowers also have the advantage of availing of a sizeable sanction with minimal documentation, quick processing, and instant loan approval.

The rate of interest offered to you depends on several factors. Two of the key factors are your eligibility and credibility as a borrower.  With the right profile, you can take advantage of a more competitive interest rate and better lending terms. While these are the most essential considerations in availing of a Home Loan, several other aspects hold considerable weightage too.

For instance, disclosure of additional fees and charges, such as the loan processing fee, can impact your borrowing decision and experience. With us, you can be assured of complete transparency in terms of how much you pay, when, and why.

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Home Loan Interest Rates for Salaried and Self-Employed Individuals

The interest rates on housing loans are different for salaried and self-employed borrowers. Your credit score, income, and employment history are evaluated among other factors to calculate your ​Home Loan Eligibility. By fulfilling the eligibility requirements, applicants can obtain a favourable Home Loan interest rate from Bajaj Housing Finance. The following tables show the current Home Loan interest rates for salaried and self-employed applicants:

Interest Rates for Salaried Applicants

Salaried Floating Reference Rate: 15.40%*

Home Loan Interest Rate (Floating)

Loan Type Effective ROI (p.a.)
Home Loan 8.50%* to 15.00%*
Home Loan (Balance Transfer) 8.70%* to 15.00%*
Top-up 9.80%* to 18.00%*

Interest Rates for Self-Employed Applicants

Self-Employed Floating Reference Rate: 16.00%*

Home Loan Interest Rate (Floating)

Loan Type Effective ROI (p.a.)
Home Loan 9.10%* to 15.00%*
Home Loan (Balance Transfer) 9.50%* to 15.00%*
Top-up 10.00%* to 18.00%*

Salaried individuals and self-employed professionals can also avail of Repo Rate linked Home Loans.

For a complete list of interest rates, please  click here.

  • Bajaj Housing Finance charges an additional rate, called ‘spread,’ over the benchmark rate to arrive at the final lending rate. The spread varies on the basis of various parameters, including the bureau score, profile, segments, and approval from competent authorities, among others.
  • BHFL may grant loans below or above the documented rate of interest (up to 100 basis points) in deserving cases on exceptional basis under the powers of the competent authority, vested with them.
  • The above benchmark rates are subject to change. Bajaj Housing Finance will update the current benchmark rates on this website in the event of a change.

Other Fees and Charges

TYPE OF FEE CHARGES APPLICABLE
Processing Fee Up to 4% of the loan amount + GST as applicable
EMI Bounce Charges Refer to the table provided below for the full break-up
Penal Charges Click here to know about the penal charges

EMI Bounce Charges

Loan Amount Charges
Up to Rs.15 Lakh Rs.500
Rs.15 Lakh – Rs.30 Lakh Rs.500
Rs.30 Lakh – Rs.50 Lakh Rs.1,000
Rs.50 Lakh – Rs.1 Crore Rs.1,000
Rs.1 Crore – Rs.5 Crore Rs.3,000
Rs.5 Crore – Rs.10 Crore Rs.3,000
More than Rs.10 Crore Rs.10,000

Prepayment and Foreclosure Charges

Individual borrowers with Home Loans linked to floating interest rates pay no additional charges on the prepayment or foreclosure of the housing loan amount. However, this may change for individual borrowers and non-borrowers who have loans for business purposes.

For individual and non-individual borrowers with floating interest rate loans for non-business purposes:

Particulars Term Loan Flexi Term Loan Flexi Hybrid Loan
Part-prepayment Charges Nil Nil Nil
Full Prepayment Charges Nil Nil Nil

For individual and non-individual borrowers with floating interest rate loans for business purposes and all borrowers with fixed interest rate loans:

Particulars Term Loan Flexi Term Loan Flexi Hybrid Loan
Part-prepayment Charges 2%* on Part-prepayment Nil Nil
Full Prepayment Charges 4%* on Principal Outstanding 4%* on the available Flexi Loan Limit 4%* on the Sanctioned Amount during Flexi Interest Only Loan Repayment Tenor; and 4%* on the available Flexi Loan Limit during Flexi Term Loan Tenor

*GST as applicable will be payable by the borrower in addition to the Prepayment Charges.

**Nil for Home Loans closed by borrowers out of their own sources. Own sources refer to any source, other than borrowing from a bank/NBFC/HFC and/or a financial institution.

Purpose of Loan

The following loans shall be classified as loans for a business purpose:

  • Lease Rental Discounting Loans
  • Loans Against any Property availed for a business purpose, i.e., working capital, debt consolidation, repayment of business loan, expansion of business, acquisition of business assets or any similar end usage of funds
  • Loan for purchase of Non-Residential Properties
  • Loan against security of Non-Residential Property
  • Top-up Loans for a business purpose, i.e., working capital, debt consolidation, repayment of business loan, expansion of business, acquisition of business assets or any similar end usage of funds

Types of Interest Rates on Home Loans in India_WC

Types of Home Loan Interest Rates in India

Lenders offer loans at two main types of interest rates. The housing loan interest rate is either fixed or floating.

Fixed Interest Rate

The fixed interest rate remains constant for a specific period and it is not affected by market changes. The major advantage of a fixed interest rate is that it helps borrowers plan their loan repayment in advance and manage finances efficiently. However, lenders, at times, do add a reset date, which allows them to change the rate after a certain period to match market conditions.

It is best to opt for this type of interest rate when current rates are expected to increase. This way, you avail of a housing loan at the lowest possible interest rate. However, it is not suitable to go for a fixed rate Home Loan when there is a possibility of a rate decrease in the future, as this increases your total interest payable. However, lenders usually allow you to change from a fixed rate to a floating rate during the repayment period.

Floating Interest Rate

Of the two types of Home Loan rates in India, floating rates are more popular as they are lower than fixed rates at the onset. Generally, floating interest rates are 1-2.5% lower than fixed interest rates. A floating loan interest rate is variable and changes during the tenor based on market fluctuations and benchmark rates, which means your interest outflow keeps changing. Typically, lenders account for the change in the interest outflow by keeping the EMIs same but changing the tenor to match the difference.

It is better to opt for floating interest rates when the existing interest rates are expected to fall. The main advantage of choosing a Home Loan with a floating rate as an individual borrower is that there are no charges on part-prepayment and foreclosure.

There is also a third option of mixed interest rates, where interest is levied at a fixed rate at the beginning and then converted into a floating rate after a set period.

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Different Methods to Calculate Housing Loan Interest Rates

Looking to calculate Home Loan Interest? When availing of a Home Loan, it's important to understand the Home Loan interest you will be paying over the loan tenor. Here are two methods to calculate your overall interest payable:

Method 1: EMI Calculator

You can simply calculate the interest amount on your Home Loan by using a Home Loan EMI Calculator. Input the following information into the calculator's fields:

  • Home Loan amount
  • Loan repayment tenor
  • Rate of interest

Once you have entered these details, you will get a detailed breakup of your loan, including the amount payable towards interest.

Method 2: EMI Calculation Formula

Alternatively, use this formula to calculate your EMI liability:

EMI = [P x r x (1+r)^n]/[(1+r)^n-1]

Here, P is the principal, r is the rate of interest, and n is the number of instalments or loan tenor in months.

Understanding Effective Interest Rate

The interest rate on a Home Loan has two components: the base rate and markup rate. The combination of these two determines the interest rate you will be paying. Here is a breakdown of these components:

Base Rate: This is the standard lending rate of the bank applicable for all retail loans. It changes frequently based on various factors.

Markup: This component of a small percentage is added to the base rate to arrive at the effective interest rate (EIR) for a specific type of Home Loan. It varies from one type of loan to another.

Effective Interest Rate (EIR) = Base Rate + Markup

Since April 2016, the Reserve Bank of India (RBI) has mandated a new method for computing lending rates called the Marginal Cost of Funds based Lending Rate (MCLR). This method replaces the base rate system and takes into account various factors such as ​Repo Rate and deposits to determine the lending rate. This MCLR-based computation is slightly lower than the base rate.

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Factors That Impact Your Home Loan Interest Rate

There are many factors that affect housing loan interest rate​s​, including external market conditions, such as the ​Repo Rate and inflation. Some of the other factors that affect ​​​the interest rate of your Home Loan include:

Interest Rate Type

The type of interest rate you opt for impacts your overall interest rate outflow. Fixed rates are normally higher than floating rates by 1–2.5%.

CIBIL Score and Financial Stability

Your credit score depicts your creditworthiness. A high score of 750+ positions you as a reliable borrower. This can help you get a more competitive interest rate. Other factors such as your job stability, income, and salary also affect the Home Loan interest rate offered to you. They impact your repayment ability, and lenders may offer a more competitive rate to borrowers who have a higher ability to repay on time.

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How to Reduce Your Home Loan Interest Rates?

A lower interest Home Loan decreases the cost of borrowing and makes repayment more stress-free. Getting an attractive Home Loan interest rate in India is simply a matter of improving your eligibility for the loan and showcasing disciplined credit behaviour. Read on for some tips.

Compare Lenders Before Applying

One of the most important things to do before taking a Home Loan is to compare lenders to avail of lower interest rates. While this is not the only criteria you should look for, this can help you get the most competitive rate among all the options if you meet the lender’s eligibility terms. Bajaj Housing Finance offers competitive interest rates starting at just 8.50%* p.a. for salaried applicants.

Maintain a High Credit Score

The easiest way to secure a lower Home Loan interest rate is to have a high CIBIL score. This is because a high score reflects a good credit history with various credit types in terms of your repayment track record and credit utilisation ratio.

Consider a Home Loan Balance Transfer

If you are wondering how to get a lower Home Loan interest rate while repaying your loan, you may consider transferring it to another lender offering a more favourable rate.

This is known as a Home Loan Balance Transfer, which can help maximise your Home Loan savings. However, you should consider the fees and charges associated with switching your loan, and only proceed if you are saving more despite these charges.

*Terms and conditions apply

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Home Loan Interest Rate FAQs

We offer sizeable loans at competitive interest rates with the benefit of flexible repayment over a long tenor. You are also assured of added convenience with the option to apply for a Home Loan online and avail of doorstep service for document collection. Salaried applicants can apply for a fresh Home Loan today and pay EMIs as low as Rs.733/Lakh*.

The current interest rates applicable to Home Loans differ based on the employment of the borrower. Self-employed applicants can avail of a Home Loan with Bajaj Housing Finance with interest rates starting from 9.10%* p.a. On the other hand, salaried individuals can avail of a Home Loan with interest rates starting from 8.50%* p.a.

Which of the two is better depends on market conditions. Typically, a fixed rate of interest benefits you when the interest rates are on an upward trend, and a floating rate of interest benefits you when the interest rates are on a downward trend.

A floating rate of interest refers to a rate that varies over time. It is linked to a lender's internal benchmark or an external benchmark, such as the RBI repo rate. In other words, the interest rate increases or decreases in tandem with the linked benchmark rate. Thus, under favourable market conditions, a reduced benchmark rate may lower the total interest amount payable.

On the other hand, a fixed interest rate remains the same till a reset date. Such a rate can be beneficial when the interest rates are on an upward trend.

When applying for a Home Loan with Bajaj Housing Finance, applicants are required to pay a processing fee of up to 4% of the total loan amount with GST as applicable.

There are three ways to reduce your Home Loan Interest Rates.

Boost your credit score: In India, credit scores range from 300 to 900, with a score of 750 or higher being considered good. The higher your score, the lower your interest rates are likely to be. This can even help you qualify for better Home Loan rates offered by lenders.

Consider a balance transfer: If you are currently paying high interest rates to your lender, you might want to explore the option of transferring your balance to Bajaj Housing Finance with the Home Loan Balance Transfer feature. This can potentially lower your interest rates and offer you better loan terms.

Negotiate with your lenders: If you have a good credit score and a history of making timely EMI payments, you may have more leverage to negotiate with lenders for a better Home Loan interest rate. Lenders may be willing to offer you a more favourable interest rate if you can demonstrate a history of responsible financial behaviour. Feel free to reach out to your lenders for better terms and conditions.

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