• India CSR Awards 2025
  • Guest Posts
Saturday, June 14, 2025
  • Login
India CSR
  • Home
  • Corporate Social Responsibility
    • Art & Culture
    • CSR Leaders
    • Child Rights
    • Culture
    • Education
    • Gender Equality
    • Around the World
    • Skill Development
    • Safety
    • Covid-19
    • Safe Food For All
  • Sustainability
    • Sustainability Dialogues
    • Sustainability Knowledge Series
    • Plastics
    • Sustainable Development Goals
    • ESG
    • Circular Economy
    • BRSR
  • Corporate Governance
    • Diversity & Inclusion
  • Interviews
  • SDGs
    • No Poverty
    • Zero Hunger
    • Good Health & Well-Being
    • Quality Education
    • Gender Equality
    • Clean Water & Sanitation – SDG 6
    • Affordable & Clean Energy
    • Decent Work & Economic Growth
    • Industry, Innovation & Infrastructure
    • Reduced Inequalities
    • Sustainable Cities & Communities
    • Responsible Consumption & Production
    • Climate Action
    • Life Below Water
    • Life on Land
    • Peace, Justice & Strong Institutions
    • Partnerships for the Goals
  • Articles
  • Events
  • हिंदी
  • More
    • Business
    • Finance
    • Environment
    • Economy
    • Health
    • Around the World
    • Social Sector Leaders
    • Social Entrepreneurship
    • Trending News
      • Important Days
        • Festivals
      • Great People
      • Product Review
      • International
      • Sports
      • Entertainment
    • Case Studies
    • Philanthropy
    • Biography
    • Technology
    • Lifestyle
    • Sports
    • Gaming
    • Knowledge
    • Home Improvement
    • Words Power
    • Chief Ministers
No Result
View All Result
  • Home
  • Corporate Social Responsibility
    • Art & Culture
    • CSR Leaders
    • Child Rights
    • Culture
    • Education
    • Gender Equality
    • Around the World
    • Skill Development
    • Safety
    • Covid-19
    • Safe Food For All
  • Sustainability
    • Sustainability Dialogues
    • Sustainability Knowledge Series
    • Plastics
    • Sustainable Development Goals
    • ESG
    • Circular Economy
    • BRSR
  • Corporate Governance
    • Diversity & Inclusion
  • Interviews
  • SDGs
    • No Poverty
    • Zero Hunger
    • Good Health & Well-Being
    • Quality Education
    • Gender Equality
    • Clean Water & Sanitation – SDG 6
    • Affordable & Clean Energy
    • Decent Work & Economic Growth
    • Industry, Innovation & Infrastructure
    • Reduced Inequalities
    • Sustainable Cities & Communities
    • Responsible Consumption & Production
    • Climate Action
    • Life Below Water
    • Life on Land
    • Peace, Justice & Strong Institutions
    • Partnerships for the Goals
  • Articles
  • Events
  • हिंदी
  • More
    • Business
    • Finance
    • Environment
    • Economy
    • Health
    • Around the World
    • Social Sector Leaders
    • Social Entrepreneurship
    • Trending News
      • Important Days
        • Festivals
      • Great People
      • Product Review
      • International
      • Sports
      • Entertainment
    • Case Studies
    • Philanthropy
    • Biography
    • Technology
    • Lifestyle
    • Sports
    • Gaming
    • Knowledge
    • Home Improvement
    • Words Power
    • Chief Ministers
No Result
View All Result
India CSR
No Result
View All Result
Home News

Should we take Home Loans from Bank or NBFC

India CSR by India CSR
in News
Reading Time: 6 mins read
Dr. H. Chaturvedi on Stem Education in India at STEM – CSR Roundtable
Share Share Share Share

The amount signifies only those home loans that are being serviced and part payments have already been made by borrowers. It does not reflect the actual volume of home loans, which would be much higher.


­­­­Owning a home is a cherished dream of every Indian. However, burgeoning real-estate prices in India, especially in metro cities render it almost impossible for any salaried person to buy a home by paying immediately, unless they have acquired funds from sale of property or other assets or inherited considerable money.

In such scenario, a majority of people opt for housing loans, also called home loans or house mortgage. Consequently, most major banks and NBFC in India offer home loans that can be taken either singly or jointly with spouse, parent or any other eligible entity.

Most real-estate purchases in India are driven by home loans. This is evident from the fact that by December 2017, total outstanding home loans in India were estimated at whopping Rs. 1.7 trillion. The amount signifies only those home loans that are being serviced and part payments have already been made by borrowers. It does not reflect the actual volume of home loans, which would be much higher.

India CSR
ADVERTISEMENT

Major Considerations for Home Loan

While taking a home loan, there are several considerations that come into play. Prime amongst these is cost of the property followed by personal or joint annual income. Next come interest rates payable on the home loan and repayment terms and conditions.

In India, you can avail home loans from Public Sector Undertaking (PSU) banks as well as some private and cooperative banks. Additionally, dozens of NBFCs also offer home loans. Some of these NBFCs are also operated by banks specially to cater to the home loan segment.

Therefore, it is essential to know the difference in taking a housing loan from a bank or NBFC.

Interest Rate Options

You have two options for interest rates when taking a home loan.

  • Fixed Interest Rate: This means you will pay a fixed Equated Monthly Installment (EMI) per month during the entire tenure of the year. Fixed Interest allows you to know in advance how much money you need to earmark every month to service the loan.
  • Floating Interest Rate: Reserve Bank of India fixes the Marginal Cost Lending Rate (MCLR) quarterly or every three months during a financial year. Hence, banks and NBFCs can increase or decrease the interest they are charging on a home loan. Floating Interest home loan means you may pay lower for a home loan and suddenly find the EMI has increased due to latest MCLR. Or your EMI may drop and you will pay lesser. Here, the interest rate fluctuates and you are obliged to pay the revised EMI to the bank or NBFC.

Some banks and NBFCs allow you to select an interest rate at the time of availing the loan and adjust the final installments according to the average MCLR.

Fixed interest loans are generally offered only for a fixed tenure. After this period, you are automatically obliged to pay EMIs based on floating interest rates.

Interest Rates: Banks v/s NBFCs

In March 2018, the lowest floating interest rates for housing loans were available from banks. The country’s largest PSU lender, State Bank of India (SBI) was offering housing finance at 8.30 floating interest rate. Another major PSU lender, Bank of Baroda was also charging the same floating interest rate of 8.30 percent per annum. These interest rates were applicable for loans with maximum 30-year tenure.

In contrast, major NBFCs were charging slightly higher floating interest rates for loans of 30-year duration. PNB Housing Finance, an NBFC owned by state-owned lender Punjab National Bank was charging as high as 8.60 percent per annum as floating interest. India’s largest and most reputed NBFC for home finance, HDFC was charging lower at 8.35 percent per annum while India bulls also offered home loans at 8.35 percent per annum.

In the private banking sector, DBS Bank was charging annual floating interest at 8.60 percent followed by ICICI Bank at 8.45 percent. Axis Bank was charging rates comparable with major NBFCs and the two PSU banks, at 8.35 percent per annum for loans with 30 year tenure.

Home Loan Protection Plan

This is a highly debatable and sometimes controversial issue as many financial experts will point out. Home Loan Protection Plan (HLPP) is an insurance that covers the amount of an outstanding loan, in the event of your death. This means, your spouse or legal heirs need not worry about EMIs since the insurer will pay the outstanding amount to the bank or NBFC. The house ownership is transferred to your legal heirs, in compliance with Indian laws.

Some banks and NBFCs insist that you take an HLPP and weave in the premium into your monthly EMI. Hence, you do not feel the pinch of the single-premium insurance that you would otherwise pay as lump sum. Other banks and NBFCs allow you to opt for an HLPP and do not enforce it as mandatory requirement.

Some financial and legal experts aver, HLPPs are usually of limited period such as five years. Hence, you will spend an additional amount as premium to cover remaining tenure of the home loan. HLPPs are also highly ambiguous about coverage on certain types of death such as suicide, act of terrorism, crime and others.

Instead, they aver it is better to take a life or term insurance policy to cover your home loan. A good term policy that exceeds the home loan amount will ensure wellbeing of your family and enable them to own the house.

Therefore, look for home loans from banks and NBFCs that come without the mandatory requirement of an HLPP. Instead, buy a good term insurance policy from a good NBFC.

Premature Loan Settlement

Generally, home loan borrowers step up their EMI payments due to increasing income. Hence, you may be able to fully settle a 10-year tenure home loan within seven years only. Here to need to look for the trap when availing a home loan from bank or NBFC.

Enquire about early loan settlement benefits since some banks and NBFCs charge a penal interest. This means, you will not pay the entire interest on the 10 year loan. Neither will you pay a lower interest for settling the outstanding amount earlier. Instead, you will end up paying an interest rate that is higher than the rate that would otherwise be charged for a short-term loan.

Before availing a home loan, ensure the bank or NBFC has well defined policies on premature repayment of loan that works to your advantage. Ensure the earlier repayment clauses are clearly mentioned on your agreement. If in doubt, consult a financial and legal expert for clarifications, before signing on the dotted line.

Wrap Up

As we have seen, there are no major differences involved in availing a home loan from bank and NBFC. You can safely take housing finance from any lender, provided the terms are attractive and interest rates are low.

Before we conclude, you may also consider a home loan under the Pradhan Mantri Awas Yojana (PMAY) a scheme sponsored by the Indian government. Under PMAY, home loans taken from banks attract subsidy from the government. You can avail a home loan from a PMAY participant bank or NBFC if you come under these categories:

  • Economically Weaker Section: Households earning less than Rs.300,000 per annum
  • Light Income Group: Households whose income ranges between Rs.300,000 and Rs.600,000 per annum.
  • Middle Income Group-I: Households with annual income up to Rs.1.2 million.
  • Middle Income Group-II: Households with annual income ranging between Rs.1.2 million and Rs.1.8 million.
  • Minorities: People who come under Scheduled Caste/ Scheduled Tribe and Other Backward Class categories.
  • Women: Females from the EWS and LIG category.

PMAY scheme offer a subsidy on the interest. This means, your loan or its part, up to a fixed amount taken under the scheme, is available at a lower interest rate.

Tags: Bank or NBFC: Which is Better for Loans?Home Loans from Bank or NBFCInterest Rate OptionsMajor Considerations for Home LoanNBFCs offer home loansPremature Loan SettlementShould We Take Home Loans from Bank or NBFC

India CSR offers strategic corporate outreach opportunities to amplify your brand’s CSR, Sustainability, and ESG success stories.

📩 Contact us at: biz@indiacsr.in

Let’s collaborate to amplify your brand’s impact in the CSR and ESG ecosystem.

ADVERTISEMENT
India CSR

India CSR

India CSR is the largest media on CSR and sustainability offering diverse content across multisectoral issues on business responsibility. It covers Sustainable Development, Corporate Social Responsibility (CSR), Sustainability, and related issues in India. Founded in 2009, the organisation aspires to become a globally admired media that offers valuable information to its readers through responsible reporting.

Related Posts

Father’s Day: Dettol Highlights Role of Dads with #DadsCanToo Initiative
News

Father’s Day: Dettol Highlights Role of Dads with #DadsCanToo Initiative

12 hours ago
0
Air India Ahmedabad Plane Crash
News

Air India Ahmedabad Plane Crash: 15 Shocking Facts and Official Statements You Need to Know

15 hours ago
0
India CSR
News

Sunjay Kapur – Jindal’s Independent Director Passes Away at 53

19 hours ago
0
Marriott Aravali Resort
News

Courtyard by Marriott Aravali Goes Green with 368 KWp Solar Installation

2 days ago
0
Calderys
News

Calderys Sets Sustainability Milestone at Odisha Greenfield Project

2 days ago
0
Blue Dart, DHL Unveil 2025 Report on AI-Led E-Commerce Shift in India
News

Blue Dart, DHL Unveil 2025 Report on AI-Led E-Commerce Shift in India

3 days ago
0
India csr news
News

15,000+ Nonprofits Face Digital Gaps; 80% Not Tech-Ready

4 days ago
0
National Seminar in Patna to Explore Bihar’s Role in Eastern India's Development
News

National Seminar in Patna to Explore Bihar’s Role in Eastern India’s Development

4 days ago
0
HCLTech
News

HCLTech Grant Americas Awards $1 Million to 3 NGOs for Climate Solutions

4 days ago
0
Load More
Next Post

CSR : Bata empowers the girl child with the launch of special Ballerinas

CSR Interview : Corporate success and social welfare are interdependent, says Shaifalika Panda

India CSR Awards India CSR Awards India CSR Awards
ADVERTISEMENT

LATEST NEWS

Father’s Day: Dettol Highlights Role of Dads with #DadsCanToo Initiative

Little Pepe (LILPEPE) Presale Goes Viral Fast, Raising $200,000 Before Day One Ends

CSR: Foxhog Ventures to Invest $3.5M in IIT Kanpur Startups

CSR: Ambuja Cements Honours Emerging Sports Stars at ITI Darlaghat

Air India Ahmedabad Plane Crash: 15 Shocking Facts and Official Statements You Need to Know

Sunjay Kapur – Jindal’s Independent Director Passes Away at 53

HZL HZL HZL
ADVERTISEMENT

TOP NEWS

CSR: India Yamaha Motor Supports School Education in Tamil Nadu

Tata Steel CSR Spending Report of Rs 584.61 Cr for FY25

CSR: Foxhog Ventures to Invest $3.5M in IIT Kanpur Startups

भारतीय एमेच्योर बॉक्सिंग महासंघ की आम सभा में उमेश सिंह को बड़ी ज़िम्मेदारी, मुक्केबाज़ी के बुनियादी ढांचे को सशक्त बनाने का वादा

APM Terminals Pipavav Marks World Environment Day with Week of Green Action

CSR: Ambuja Cements Honours Emerging Sports Stars at ITI Darlaghat

Load More

Advertisement

Image Slider
content writing services Guest Post Top 5 Reasons to have Sponsored Posts at India CSR – India’s Largest CSR Media stem learning R2V2 Technologies Private Limited

Interviews

Himanshu Nivsarkar, Senior Executive Vice President and Head of CSR & ESG at Kotak Mahindra Bank
Interviews

Driving Sustainable Impact: An Interview with Himanshu Nivsarkar, Kotak Mahindra Bank

by India CSR
May 22, 2025
0

By Rusen Kumar NEW DELHI (India CSR): Himanshu Nivsarkar, Senior Executive Vice President and Head of CSR & ESG at Kotak...

Read moreDetails
Balamurugan Thevar, CSR Head at Shriram Finance

Empowering Women Drivers: An Interview with Balamurugan Thevar, CSR Head at Shriram Finance

May 20, 2025
0
N E Sridhar, the Chief Sustainability Officer at Titan Company Ltd.

Empowering Rural Craft Entrepreneurs: An Interview with N E Sridhar, Titan Company

May 15, 2025
0
Geetaj Channana, the Head of Corporate Strategy at Vivo India

Empowering Young Innovators Across India: An Interview with Geetaj Channana, the Head of Corporate Strategy at Vivo India

April 25, 2025
0
Load More
Facebook Twitter Youtube LinkedIn Instagram
India CSR Logo

India CSR is the largest tech-led platform for information on CSR and sustainability in India offering diverse content across multisectoral issues. It covers Sustainable Development, Corporate Social Responsibility (CSR), Sustainability, and related issues in India. Founded in 2009, the organisation aspires to become a globally admired media that offers valuable information to its readers through responsible reporting. To enjoy the premium services, we invite you to partner with us.

Follow us on social media:


Dear Valued Reader

India CSR is a free media platform that provides up-to-date information on CSR, Sustainability, ESG, and SDGs. They need reader support to continue delivering honest news. Donations of any amount are appreciated.

Help save India CSR.

Donate Now

donate at indiacsr

  • About India CSR
  • Team
  • India CSR Awards 2025
  • Partnership
  • Guest Posts
  • Services
  • Content Writing Services
  • Business Information
  • Contact
  • Privacy Policy
  • Terms of Use
  • Donate

Copyright © 2025 - India CSR | All Rights Reserved

Welcome Back!

Login to your account below

Forgotten Password?

Retrieve your password

Please enter your username or email address to reset your password.

Log In
No Result
View All Result
  • Home
  • Corporate Social Responsibility
    • Art & Culture
    • CSR Leaders
    • Child Rights
    • Culture
    • Education
    • Gender Equality
    • Around the World
    • Skill Development
    • Safety
    • Covid-19
    • Safe Food For All
  • Sustainability
    • Sustainability Dialogues
    • Sustainability Knowledge Series
    • Plastics
    • Sustainable Development Goals
    • ESG
    • Circular Economy
    • BRSR
  • Corporate Governance
    • Diversity & Inclusion
  • Interviews
  • SDGs
    • No Poverty
    • Zero Hunger
    • Good Health & Well-Being
    • Quality Education
    • Gender Equality
    • Clean Water & Sanitation – SDG 6
    • Affordable & Clean Energy
    • Decent Work & Economic Growth
    • Industry, Innovation & Infrastructure
    • Reduced Inequalities
    • Sustainable Cities & Communities
    • Responsible Consumption & Production
    • Climate Action
    • Life Below Water
    • Life on Land
    • Peace, Justice & Strong Institutions
    • Partnerships for the Goals
  • Articles
  • Events
  • हिंदी
  • More
    • Business
    • Finance
    • Environment
    • Economy
    • Health
    • Around the World
    • Social Sector Leaders
    • Social Entrepreneurship
    • Trending News
      • Important Days
      • Great People
      • Product Review
      • International
      • Sports
      • Entertainment
    • Case Studies
    • Philanthropy
    • Biography
    • Technology
    • Lifestyle
    • Sports
    • Gaming
    • Knowledge
    • Home Improvement
    • Words Power
    • Chief Ministers

Copyright © 2025 - India CSR | All Rights Reserved

This website uses cookies. By continuing to use this website you are giving consent to cookies being used. Visit our Privacy and Cookie Policy.