Here is what happens from the moment you apply to the day you fully repay the loan.
What is a Home Loan and How Does It Work in India
Buying a home is probably the largest financial decision most Indians will ever make. And for the vast majority of us, it will not happen without a home loan. Yet remarkably few people actually understand how a home loan works — beyond the basic idea that the bank lends you money and you pay it back in monthly instalments. How exactly does the bank decide how much to lend you? What determines your interest rate? Why do the first few years of EMIs feel like you are barely reducing the principal? And what are the genuine mistakes that cost people lakhs of rupees over a 20-year loan? This guide answers all of that — plainly, without the jargon. What Is a Home Loan? A home loan — also called a housing loan or mortgage — is a secured loan that a bank or financial institution gives you specifically to buy, construct, or renovate a property. The property itself acts as collateral for the loan. This means that if you stop repaying the loan, the lender has the legal right to take possession of the…
