Buying a home is one of the biggest financial steps most of us take and let’s be honest, the interest rate on your loan can make or break that decision. While banks are often the first place people look, NBFCs (Non-Banking Financial Companies) and HFCs (Housing Finance Companies) have quietly been changing the game.
With flexible options, quicker approvals and competitive rates, NBFCs are giving banks a run for their money. But which ones are actually offering the lowest home loan rates right now and why should you care?
Let’s dig in.
Why Borrowers Are Choosing NBFCs
NBFCs and HFCs have carved a strong space in India’s home loan market and for good reason. While banks come with stricter eligibility filters, NBFCs have built a reputation for being more flexible, faster and borrower-friendly. Here’s why many homebuyers are making the switch:
- Flexible Eligibility: Unlike traditional banks, NBFCs are open to borrowers with moderate credit scores or non-traditional income sources. Freelancers, self-employed professionals and even those with slightly irregular income patterns often find it easier to get approvals here.
- Specialized Housing Finance Products: Many NBFCs focus exclusively on housing finance, which means their products are designed with homebuyers’ needs in mind, from construction loans to top-up loans.
- Quicker Approvals & Lighter Documentation: One of the biggest advantages? Speed. Homebuyers who can’t afford long waiting periods often prefer NBFCs for their streamlined paperwork and faster turnaround times.
- Competitive Rates & Festive Offers: NBFCs are known to match or even beat bank interest rates during festive seasons or special campaigns, making them attractive for cost-conscious borrowers.
Top NBFCs With Attractive Home Loan Rates (2025)
Here’s a quick look at some of the leading NBFCs/HFCs in India that are making home loans more accessible with lower interest rates and flexible terms:
| NBFC / HFC | Starting Interest Rate (p.a.) | Processing Fee | Max Tenure |
| Bajaj Housing Finance | 7.35% | Up to 4% + GST | Up to 32 years |
| LIC Housing Finance | 7.50% | 0.50% + GST | Up to 30 years |
| SMFG India Home Finance | 7.99% | 0.25% + GST | Up to 30 years |
| L&T Housing Finance | 8.10% | Up to 3% + taxes | Up to 30 years |
| Tata Capital Housing Finance | 7.75% | Up to 2% + GST | Up to 30 years |
| PNB Housing Finance | 8.25% | 0.35% – 1% | Up to 30 years |
| Godrej Housing Finance | 8.55% | Up to 3% | Up to 30 years |
| Aditya Birla Housing Finance | 8.60% | Up to 1% | Up to 30 years |
| Sammaan Capital (Indiabulls) | 8.75% | 0.50% onwards | Up to 15 years |
Note: Rates depend on factors like your credit profile, loan amount and the lender’s internal policies. Always check the latest rates on the NBFC’s official website before applying.
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Factors That Influence Your Home Loan Rate
Even though NBFCs advertise attractive “starting” rates, the actual interest rate you get depends on your personal profile. Here are the key factors that determine how much you’ll end up paying:
- Your Credit Score
- A CIBIL score of 750+ is considered excellent and can help you grab the lowest advertised rates.
- If your score is lower, NBFCs may still lend, but you’ll likely pay a slightly higher rate.
- Employment Type & Income
- Salaried employees with stable incomes are often offered better rates.
- Self-employed professionals or business owners may face higher rates due to income variability, but NBFCs are generally more flexible than banks here.
- Loan Amount & Loan-to-Value (LTV) Ratio
- The higher the loan amount, the lower the rate you may get, since NBFCs prefer bigger ticket sizes.
- A higher LTV (smaller down payment) could mean a slightly higher interest rate because of the added risk.
- Fixed vs. Floating Rate Choice
- Floating rates are usually lower initially, but they fluctuate with market conditions.
- Fixed rates give stability but might cost slightly more.
- Repayment Tenure
- Longer tenure = lower EMIs, but it increases the total interest paid over time.
- Shorter tenure = higher EMIs, but saves you money on interest.
Conclusion
NBFCs and HFCs have transformed the home loan market in India by offering competitive rates, faster approvals and borrower-friendly terms. For many homebuyers, especially those who may not fit into the rigid criteria of banks, NBFCs provide a strong and reliable alternative.
That said, the “lowest rate” isn’t the only thing to look at. Factors like processing fees, loan tenure, prepayment flexibility and your credit profile can make a big difference in how affordable your loan really is.
The smart move? Compare different NBFCs, check your eligibility and read the fine print before signing on. With the right lender, you can secure a home loan that’s not just cheaper but also better suited to your needs.
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