HDFC Home Loan Review: Should You Apply?

HDFC Home Loan Review: Should You Apply?

HDFC offers a range of home loan products with low interest rates and long loan tenures.

Good for

  • Individuals seeking lowest interest rates on home loans
  • Borrowers who are low income earners

Bad for

  • Borrowers older than 65 years old

Editor's Rating

4.5/5.0

HDFC offers a wide range of affordable housing finance products in India. The bank's fixed rate home loans, top up home loans and loans against property are particularly cheap compared to other Indian banks and home loan lenders. For this reason, HDFC is worth considering if you seek to avail a home loan with the lowest interest rates.

Summary of HDFC's Home Loans
Low interest rates across most home loan products
Low processing fee for salaried borrowers: 0.50% of loan amount (minimum Rs 3,000)
Concessional interest rates for women

Table of Contents

What Makes HDFC Home Loans Stand Out to Borrowers

HDFC housing loans are among the cheapest options available in India. The bank's fixed rate home loans are especially competitively priced. Due to these better than average rates, borrowers can save a significant amount of money both in their equated monthly payments (EMI) and in the total amount of interest paid over the course of their home loan.

HDFC Home Loan Interest Rates

Based on our research of over 30 banks, HDFC charges lower interest rates than the average home loan lender in India. Below, you will find HDFC rates based on home loan amount for both salaried individuals and self-employed professionals.

Loan AmountFloating Rate2-Year Fixed Rate
Up to Rs. 30 lakh7.00% - 7.50%7.45% - 7.95%
Rs. 30 lakh - Rs. 75 lakh7.25% - 7.75%7.60% - 8.10%
More than Rs. 75 lakh7.35% - 7.85%7.70% - 8.20%
Average Rate in India7.54% - 8.41%
Floating interest rates are 0.05% lower for women borrowers, 0.15% higher for self-employed non-professionals
Loan AmountFloating Rate2-Year Fixed Rate
Up to Rs. 30 lakh7.00% - 7.50%7.45% - 7.95%
Rs. 30 lakh - Rs. 75 lakh7.25% - 7.75%7.60% - 8.10%
More than Rs. 75 lakh7.35% - 7.85%7.70% - 8.20%
Average Rate in India7.54% - 8.41%
Floating interest rates are 0.05% lower for women borrowers, 0.15% higher for self-employed non-professionals

If you are a woman, you can avail an HDFC home loan with interest rates starting at 6.95% p.a. You will have to have good CIBIL credit history to be eligible for the lowest interest rate. Self-employed non-professionals, on the other hand, can avail a home loan with interest rates starting at 7.15% p.a.

Read more: 2020 Home Loan Interest Rates of All Banks

HDFC Home Loan Top Up Interest Rates

Below, you can find interest rates for HDFC Home Loan Top Up Loans. For new customers, the interest rates are the same as a home purchase loan.

Borrower TypeFloating Interest Rate
Existing borrowers8.30% - 8.80%
New Borrowers7.00% - 7.85%
Floating interest rates are 0.05% lower for women borrowers, 0.15% higher for self-employed non-professionals
Borrower TypeFloating Rate
Existing borrowers8.30% - 8.80%
New Borrowers7.00% - 7.85%
Floating interest rates are 0.05% lower for women borrowers, 0.15% higher for self-employed non-professionals

In addition to its home loans to purchase new or existing homes, HDFC offers competitive home loan top ups. These loans can be taken out on top of your current home loan and used for personal expenses, such as a wedding or a medical procedure. The bank offers top up loans of up to Rs. 50 lakhs, which is close to the market average.

HDFC Loan Against Property Interest Rates

HDFC also offers competitive interest rates for its loans against property. These loans can be taken out based on the value of your home and used for other personal or business use.

Loan AmountFloating RangeFixed Rate
Less than Rs. 100 lakh8.75% - 10.40%9.30% - 10.60%
Rates are higher for non-self occupied residences (floating +0.25%, fixed +0.50%)
Loan AmountFloating RateFixed Range
Less than Rs. 100 lakh8.75% - 10.40%9.30% - 10.60%

Once again, due to HDFC's competitive interest rates and relatively low processing fees, the total cost of its loans against property tend to be less expensive than other banks and home loan lenders.

Read more: Axis Bank Home Loan Review | SBI Home Loan Review

HDFC Home Loan Eligibility Criteria

Consider this if you seek affordable home lending rates

Maximum Loan Tenure 30 years
Processing Fee 0.50% of the loan amount or Rs. 3,000, whichever is higher

The minimum age to avail an HDFC home loan is 21 years old, while the maximum age is 65. You will have more home loan eligibility if you are younger, so this is good to consider if you are seeking to borrow from HDFC.

HDFC also considers your credit history, income level and financial position when assessing your ability to repay your home loan. To be eligible for an HDFC home loan, you must make at least Rs. 10,000 per month, or Rs. 2 lakhs per year if you are self-employed.

Like most banks, HDFC charges lower interest rates to women and salaried employees. Women can avail a 0.05% concessional interest rate on most HDFC home loans.

Read more: Home Loan Eligibility: Compare Eligibility Criteria by Bank

HDFC Home Loan Processing Fees and Other Charges

HDFC processing fees are slightly lower than its competitors at 0.50% of the total loan amount. Other charges and fees are standard, like no prepayment penalty fees on home loans with floating interest rates, for instance.

Below, you can find a list of HDFC fees you may come across when availing a home loan.

FeeAmount
Processing Fee (Salaried)Greater of 0.50% of loan amount or Rs. 3,000 + tax
Processing Fee (Self-Employed)Greater of 1.50% of loan amount or Rs. 4,500 + tax
Late Payment Interest Rate24.00% p.a.
Check Dishonour ChargesRs. 200
List Of DocumentsUp to Rs. 500
Photo Copy Of DocumentsUp to Rs. 500
PDC SwapUp to Rs. 200
Disbursement Cheque Cancellation Charge Post DisbursementUp to Rs. 200
Re-Appraisal Of Loan After 6 Months From SanctionUp to Rs. 2,000 plus + tax
Increase / Decrease In Loan TermUp to Rs. 500 + applicable tax
Prepayment Fees0.00% - 2.00% + tax
Conversion Fees0.05% - 1.75% of principal outstanding

While interest rates are the most important factor when calculating the cost of various loans, it is also very important to consider fees and plan to minimise the total cost of your loan by avoiding unnecessary charges.

HDFC Home Loan Application Process

You can apply for an HDFC home loan in person or begin your housing loan application online. To start, HDFC provides an eligibility calculator to help you determine the loan amount you can avail from the bank.

HDFC offers a wide range of options for Know Your Customer (KYC) and proof of income requirements. If you are self-employed, HDFC asks you to submit specific required documents for proof of income, which is standard for most banks and home loan lenders.

Below, you can see which required documents are necessary for your HDFC home loan sanction and approval.

Required Documents for HDFC Home Loan Applications

  • Proof of Identity/Residence: Aadhar Card, Passport, Driver’s License or Voter ID card
  • Proof of Income (Salaried): Salary Slips (3 months), Bank Statements (6 months), Form-16 and IT Returns
  • Proof of Income (Self-Employed): Business & Personal IT Returns (3 years), Balance Sheet and Profit & Loss A/c Statements (3 years), Savings Account Statements (6 months)
  • Employment Contract / Appointment Letter in case current employment is less than year old
  • Signed, passport size photograph of all the applicants / co-applicants
  • Cheque for processing fee favouring HDFC Ltd.

HDFC also requires home loan applicants to submit several documents related to the property to be purchased or borrowed against. For a list of these documents, please refer to the table below.

Home TypeRequired Documents
New Homes
  • Copy of the Allotment Letter / Buyer Agreement
  • Receipt of payment made to the developer
Resale Homes
  • Receipt of initial payment made to the seller
  • Copy of the agreement to sell
Construction
  • Proof of no encumbrances on the property
  • Copy of the plans, approved by the Local Authorities
  • Construction estimate by an Architect / Civil engineer
William Hofmann

William is a Product Manager at ValueChampion, focusing on banking and SMEs. He previously was an Economic Consultant at Industrial Economics Inc.