Union Bank of India Home Loan Review: Interest Rate, Eligibility

Union Bank of India Home Loan Review: Interest Rate, Eligibility

Union Bank of India offers a range of home loans with some of the lowest interest rates in the market.

Good for

  • Borrowers seeking the lowest home loan interest rates
  • Borrowers with CIBIL score above 600
  • Women seeking home loan benefits

Bad for

  • Self-employed borrowers without ITRs
  • Borrowers with a very low CIBIL score
  • Borrowers seeking fixed rates on their home loan

Editor's Rating

4.5/5.0

Union Bank of India (UBI) offers one of the cheapest home loans in India for all ages and backgrounds. While the bank prefers borrowers with high CIBIL scores, UBI offers a range of home loan products that fit the needs of a variety of borrowers. With the lowest interest rates in the market, generous eligibility criteria, and flexible EMI repayment plans, Union Bank is considered one of the best home loan providers in the country.

Summary of Union Bank Home Loans
Lowest interest rates starting at 6.80%
Generous eligibility criteria
Multiple EMI Repayment Methods
No limit on home loan amount

Table of Contents

What Makes Union Bank Home Loans Stand Out to Borrowers

Union Bank of India offers one of the cheapest home loans in India, particularly for women and borrowers with high CIBIL scores. Between offering the lowest interest rates in the market — starting at 6.80% — and generous home loan eligibility, the Union Bank Home Loan stands out as one of the best options for eligible applicants.

A big advantage of the Union Bank Home Loan is the flexibility of home loan repayment methods. Below, you can find the multiple loan repayment options available to eligible borrowers.

Repayment Method

Description

Equated Monthly Instalment (EMI)

This is the most basic repayment option available at UBI. Borrowers pay 12 EMIs per year.

Equated Quarterly Instalment (EQI)

Borrowers who work in agriculture or allied activities can pay off their UBI home loan on a quarterly basis, instead of a monthly basis. This means a farmer, for instance, will contribute a larger loan payment 4 times a year, instead of smaller EMI payments 12 times a year.

Step-Up Repayment Method

EMI amounts will be reduced for the initial months of loan tenure, which results in higher EMI amounts for the remainder of the UBI loan term.

Balloon Repayment Method

EMI amounts will be reduced throughout your loan term, but you must pay the remainder all at once at the end of your UBI home loan tenure.

Flexible Loan Instalment Plan (FLIP)

Eligible borrowers can pay a large lump sum amount in the middle of their UBI home loan tenure, which will result in lower EMI amounts for the remainder of the loan term.

Bullet Payment

Borrowers can pay multiple large lump sum amounts throughout their loan tenure, resulting in lower EMIs for the remainder of their UBI home loan term.

In addition to multiple home loan repayment methods, Union Bank of India provides a moratorium period of 36 months for home purchases and construction loans, and 12 months for home repair and renovation loans. This is important for borrowers who may face financial difficulties during their home loan process, and would need to pause their EMI payments.

Union Bank Home Loan Interest Rates

Union Bank has home loan interest rates lower than popular competitors like HDFC and SBI.
Union Bank has home loan interest rates lower than popular competitors like HDFC and SBI.

Union Bank home loan interest rates are one of the lowest in India, even lower than popular lenders like SBI and HDFC. Housing rates range between 6.80% and 7.65%, but your final interest rate will be determined by your gender, CIBIL score, and type of home loan, amongst other factors.

Women with CIBIL scores above 700 can avail the lowest interest rate at 6.80% p.a. Other borrowers can avail interest rates beginning at 6.85%, which is still well below the average rate of 9.60%.

Borrowers with lower CIBIL scores can also avail competitive rates between 6.95% and 7.35%. Though, your final interest rate will depend on the margin you wish to fund. For example, 75% funding of your property value will result in a lower interest rate than a 90% margin. As a note, there is no limit on your home loan eligibility as long as your home financing needs justify the amount you seek from Union Bank.

Read More: SBI Home Loan Review

Union Bank Home Loan Fixed Rates

Though Union Bank has the lowest floating rates in the market, the lender's fixed rates are relatively high. Below, you will find Union fixed rates on home loans per loan amount bracket. It's also important to note that UBI fixed rates are held for up to 5 years, in which it is then subject to change.

Loan AmountFixed Interest Rate
Up to Rs. 30 lakhs11.40%
Rs. 30 lakhs to Rs. 50 lakhs12.40%
Rs. 50 lakhs to Rs. 200 lakhs12.65%

If you are seeking a fixed rate on your home loan, you can find cheaper rates at lenders like HDFC or LIC Housing Finance.

Read more: HDFC Home Loan Review | LIC HFL Home Loan Review

Union Bank Home Loan Eligibility Criteria

Consider this if you seek the lowest home loan interest rate

Maximum Loan Tenure 30 years
Processing Fee 0.50%, max Rs. 15,000

In addition to low interest rates, Union Bank has generous eligibility criteria. Unlike many banks, the Union Bank Home Loan is open to both resident Indians and non-resident Indians (NRI).

Further, the bank's age requirements allow women from 18 to 75 years old to apply for a home loan. Considering many banks' age cut off is 65 years old, the Union Bank Home Loan stands out as an especially inclusive option for borrowers of all ages and backgrounds.

Like most banks, Union Bank of India offers a loan tenure maximum of 30 years for purchase and construction loans, and a loan term of 15 years for renovation and repair loans. Union Bank also has standard margin offers, where they are able to fund up to 90% of your home or property value.

Read more: Home Loan Eligibility Guide

UBI Processing Fees and Other Charges

Union Bank has a slightly higher processing fee than other top competitors at 0.50% of the total amount, but the bank's fees and charges are still well within the top 3 cheapest amongst the banks we analysed.

For home loans with floating interest rates, there are no prepayment penalty fees. Uniquely, home loans with fixed interest rates will also face no prepayment penalties, whereas most banks charge fees on home loans with fixed rates. That being said, if you are seeking a balance transfer on a fixed rate home loan, you will be charged 2.00% of principal outstanding.

Union Bank Home Loan Application Process: How to Apply

You can apply for a Union Bank home loan online or at any one of the Union Bank of India branches. Additionally, you can visit a UBI special loan lending branch, otherwise called a Union Loan Point. You do not need to hold a salary account with Union Bank to be eligible for a UBI home loan.

UBI Required Documents

Union Bank of India advertises a 5 day loan sanction, provided you have submitted all required documents on time. Below, you can find a list of required documents for both self-employed borrowers and salaried borrowers.

Self-Employed BorrowersSalaried Borrowers
Proof of Identity (any one of the following)Passport, PAN Card, employee identity card, or any other valid proof
Proof of Address (any one of the following)Electricity bill, telephone bill, Aadhar, any other valid proof
Proof of Income
  • Last one year ITR
  • Form-16 or letter from employer
  • Last 6 months salary slip
  • Last 3 years ITR
  • P & L Balance sheet
* Agriculturists should submit income certificate from concerned revenue officer (Tahsildar) and proof of land holding.

UBI Home Loan Co-Applicants

It's important to note that you can apply for a home loan as the sole applicant or with a co-applicant. It's recommended that you apply with a joint applicant, in the case that they have a higher CIBIL score or income.

Union Bank offers a list on their website of eligible co-applicants. Since UBI is one of the best home loan options for women, we recommend that women do their research on UBI eligibility criteria before they apply. With that in mind, we've listed the accepted co-applicants for both married female and unmarried female borrowers below.

Co-applicants for Unmarried WomenCo-applicants for Married Women
  • Mother
  • Father
  • Husband
  • Son or unmarried daughter
  • Daughter-in-Law
  • Father-in-Law
  • Mother-in-Law
Natalia Sanchez-Kumar

Natalia Sanchez-Kumar is a Junior Research Analyst at ValueChampion, specialising in home loans in India. She is a History graduate of New York University and has worked in the area of social impact, Future of Work and socio-technological research in the US and India. She has co-authored policy proposals alongside the International Labour Organisation in Sri Lanka and the Maldives, as well as hosted a data privacy conference with Facebook in New Delhi.