Rural Home Loans- Features, Eligibility and Documentation

Rural home Loan

Rural home Loan

Rural home loans are offered to achieve the objective of ‘’Affordable Housing for All’’ proposed by the Government of India. These loans have zero to very less processing fees, flexible eligibility criteria, and minimal documentation. The Interest rates start from 8.05% p.a. to 13.75% p.a. with a maximum repayment tenure of up to 30 years for your loan. And the loan amounts range from Rs.2 lakh to Rs.75 lakh.

Rural Housing Loan Scheme Interest Rate 2022

Rural Housing Finance Interest Rate Processing Fee on Loan Amount
HDFC Rural Housing 7.35% p.a. Up to 6%
Bajaj Housing Finance 9.25% p.a. onwards Up to 6%
Indiabulls Rural Home Loans 8.99% p.a. onwards Up to 2%
Bank of Baroda Rural Finance Scheme 6.25% p.a 0.125%
IIFL Rural Housing Scheme 8.70% p.a. Up to 1.25%
Axis Asha Home Loan 10.05% p.a. Up to 1%

Eligibility Criteria For Rural Home Loan

The following are the eligibility criteria for rural home loans:

  • You must be an Indian resident.
  • The minimum age is 21 years and a maximum of 59 years.
  • You must have a steady and regular income
  • Individual applicants or joint applicants with other family members such as a parent, spouse, or children are eligible.
  • Agriculturalists, entrepreneurs, self-employed, salaried, and professionals are eligible

Also Read: The Ultimate Home Loan Calculator-Check How Much Can You Afford?

Documentation For Rural Home Loan

The following documents are required to be submitted at the time of loan application:

  • Proof of income and proof of identity such as: Valid passport, Voter ID, Aadhar card, PAN Card and Other KYC documents as required by the bank
  • Agriculturalists must submit income proof such as: Last 6 months’ bank statements, Copy of the documents of agricultural land as a proof of land holding and copies of the documents of agricultural land as a proof of crops being cultivated.
  • Salaried applicants must submit income proof such as: PAN card, Last 6 months bank statement, Last 3 months’ salary slips, Latest IT returns and Form 16
  • Self-employed applicants must submit income proof such as: PAN Card, IT assessment for the last 3 years, Profit & Loss statement for the business and Account statements for business and self. Note that the documents required may vary depending on the bank’s rules and regulations.

Features And Benefits of A Rural Home Loan:

  • Zero to very less processing fee
  • You can get concession on interest rate
  • You can get complimentary insurance cover offered by some banks
  • Low margin requirements for loan, varying from 10% to 20%
  • Longer repayment tenures for loan
  • More flexibility to choose the best repayment tenure as per your requirement.
  • You can get personalized documentation assistance
  • Door-to-door servicing of loans is available.
  • No prepayment penalty is charged
  • Banks offer a moratorium period of up to 18 months

Loan Tenure And Quantum For Rural Home Loan:

  • The loan repayment tenure is flexible and ranges between 3 years to 20 years
  • Quantum of loan ranges from Rs.5 lakh to Rs.15 lakh depending on your income, repayment capacity, and the project cost.
  • You will get options to customize your loan settlement that suits your requirements.

HDFC Rural Home Loan:

HDFC bank offers rural housing loans at interest rates starting from 8.10% p.a. And the loan repayment tenure goes up to 30 years. agriculturists, planters, horticulturists and dairy farmers are eligible for this loan with customised repayment options. So you can avail HDFC Rural Housing Loans without mortgaging your agricultural land or submitting IT Returns.

Who Can Apply?

You can apply on your own or jointly with one or more close family members such as your spouse, children, or relative for a HDFC Rural House Loan. And there is no requirement for all co-applicants to be co-owners.

Housing Loan Tenure:

HDFC offers a maximum tenure for loan repayment of up to 30 years for housing loans.

There is the “Telescopic Repayment Option”, which is eligible for applicants who are either salaried and self-employed category under the Adjustable Rate Home Loan. For all other Home Loan products, the maximum tenure is no more than 20 years.

Moreover, the loan tenure is also based on the applicant’s profile, age at the time of loan maturity and other such norms listed by the bank.

HDFC Rural Housing Loan Highlights
Interest Rate 8.10% p.a. onwards
Loan Amount 75% – 90% of the property cost
Loan Tenure Up to 30 years
Processing Fee Up to 1.50% of the loan amount or Rs. 4,500 + GST

 

Maximum Loan Amount Under HDFC Rural Housing Loan Schemes:

Loan Amount Maximum Finance
Up to and including Rs.30 lakh 90% of the property cost
Above Rs.30.01 lakh and up to Rs.75 lakh 80% of the property cost
Above Rs.75 lakh 75% of the property cost

Note: The above estimates may vary depending on the repayment capacity of the applicant/co-applicant, as assessed by HDFC.

Features & Benefits of HDFC Rural Home Loan:

  • HDFC Rural Housing Loans have loans that are designed for Farmers, Planters, Horticulturists, and Dairy Farmers.
  • With HDFC Rural Housing Loans, you can buy an under construction, new or a used residential property in the rural and city areas.
  • You can avail Rural Home Loan from HDFC for building your house on a freehold or leasehold plot in the rural and urban regions.
  • You can also use this loan to renovate or enhance your old home in many ways such as tiling and flooring, internal and external plaster or painting etc.
  • Farmers need not submit Income Tax Returns when applying for the HDFC Rural Home Loan.
  • You can use this loan to extend your current living space such as adding rooms etc.
  • If you are a salaried individual or self-employed, you can also apply for home loan.
  • Agriculturists can get longer tenure for loan repayment up to 20 years.
  • Attractive and competitive interest rates.

Also Read: Quick ways to know if you are eligible to get a home loan .

HDFC Rural Housing Loan Interest Rate

Here is the list of interest rates for Home Loan Interest Rates

Loan Slab Interest Rates (p.a.)
For Women (up to 30 lakhs) 8.10%-9.50%
For Others (up to 30 lakhs) 8.15%-9.50%
For Women (30.01 lakhs to 75 lakhs) 8.35%-9.75%
For Others (30.01 lakhs to 75 lakhs) 8.40%-9.75%
For Women (75.01 lakhs & above) 8.45%-9.85%
For Others*(75.01 lakhs & above) 8.50%-9.85%

Loan to Value (LTV) Ratio:

Loan Amount LTV Ratio
Up to and including Rs 30 lakh Up to 90% of property cost
Rs 30.01 lakh-Rs 75 lakh Up to 80% of property cost
Above Rs 75 lakh Up to 75% of property cost

HDFC Rural Housing Loan Processing Fees & Charges

Particulars Charges (excluding GST)
Processing fees (for Salaried/ Self-Employed Professionals)

 

Up to 0.50% of the loan amount or Rs. 3,000 whichever is higher
Minimum Retention Amount: 50% of applicable fees or Rs. 3,000 whichever is higher
Processing fees (for Agriculturists/ Self-Employed Non-Professionals) Up to 1.50% of the loan amount or ₹4,500 whichever is higher.
Minimum Retention Amount: 50% of applicable fees or Rs 4,500, whichever is higher.
Prepayment Charges Adjustable Rate Loans (ARHL) and Combination Rate Home Loan (“CRHL”) during the period of applicability of the Variable Rate of interest – NIL
Fixed Rate Loans (“FRHL”) and Combination Rate Home Loan (“CRHL”) during the period of applicability of the Fixed Rate of interest- NIL when prepaid through own sources of funds;

2% of the prepaid amount when paid through other sources of funds

Late payment fee 24% p.a.
Check dishonour charges Rs. 300
List of Documents Up to Rs 500
Photocopy of Documents Up to Rs 500
PDC Swap Up to Rs. 500
Disbursement Cheque Cancellation Charge Post Disbursement Up to Rs. 500
Re-Appraisal Of Loan After 6 Months From Sanction Up to Rs 2,000

Conversion Charges

Particulars Charges
Switch to Lower Rate in Variable rate Loans (Housing/Extension/Renovation) Up to 0.50% of the principal outstanding and undisbursed amount (if any) at the time of conversion or a cap of Rs 50,000, whichever is lower
Switch to Variable Rate Loan from Fixed Rate Loans (Housing/Extension/Renovation) Up to 0.50% of the principal outstanding and undisbursed amount (if any) at the time of conversion or a cap of Rs 50,000, whichever is lower
Switch from Combination rate home loan fixed rate to variable rate Up to 1.75% of the principal outstanding and undisbursed amount (if any) at the time of conversion
Switch to Lower rate (Plot Loan) Up to 0.50% of the principal outstanding and undisbursed amount (if any) at the time of conversion

Documents Required for HDFC Rural Housing Loan

Identity & Residence Proof (KYC) for agriculturists, salaried individuals, self-employed individuals

  • PAN Card or Form 60 (if the loan applicant does not have a PAN Card). And this is mandatory to submit for your KYC.
  • Officially Valid Documents (OVD) for identity and address proof of the applicant (you can submit any of the following): Passport, Driving license, Election/Voters identification card, Job card which is issued by NREGA duly signed by the officer of the State Government, Letter issued by the National Population Register that contains the details of your name and address, Aadhaar Card.

Income Proof

  • Agriculturists: Xerox Copies of Title Documents of agricultural land showing the land holding, Copies of Title Documents of agricultural land showing that the crops are being cultivated, Bank statements of last 6 months.
  • Salaried Individuals: Salary Slips of last 3 months, Bank Statements of last 6 months, showing salary credits, Latest Form-16 and IT returns
  • Self-Employed Individuals: Income Tax Returns (ITR) along with income computation for the last 3 Years (attested by a CA), Balance Sheet and Profit & Loss A/c Statements of last 3 years, with Annexures / Schedules (of both the business and individual and attested by a CA), Last 6 months’ Current A/c Statements of the business entity and Savings Account Statements of the applicant.

Other Documents As Per Bank’s Requirement

For Agriculturists

  • Bank Statements of last 6 months
  • Passport size photograph of all the applicants / co-applicants and must be be duly signed
  • Cheque for processing fee favouring ‘HDFC Ltd.’ In Indian Rupees
  • Own contribution proof
  • Loan Statements of last 2 years (if any)

For Salaried Individuals

  • Employment Contract / Appointment Letter / Offer Letter in case current employment which is less than 1 year
  • Last 6 months’ Bank Statements showing repayment of ongoing loans (if any)
  • Memorandum of Association (MOA) and Articles of Association (AOA) of the Company
  • Passport size photograph of the applicants / co-applicants and must be signed across the photo.
  • Own contribution proof
  • Last 2 years statement of loans availed (if any)

For Self-Employed Individuals

  • Business profile
  • Latest Form 26 AS
  • Memorandum of Association (MOA) and Articles of Association (AOA) of the Company
  • List of Directors and Shareholders certified by a CA / CS if the business entity is a company
  • Partnership deed in case of the business entity is a partnership firm
  • Details of current ongoing loans of the applicant and the business entity such as the outstanding amount, instalments, security, purpose, balance loan term, etc.
  • Passport size photograph of all the applicants / co-applicants and must be signed across the photo.
  • Cheque for processing fee favouring ‘HDFC Ltd’
  • Own Contribution Proof

Tax Benefits on Home Loans

You can avail tax benefits for home loans under various sections of the Income Tax Act. These home loan tax deductions help borrowers save a good amount of money every year. So here are sections that offer tax benefits on your home loan during your EMI payments:

Section of Income Tax Act Nature of Home Loan Tax Deduction Max. Tax Deductible Amt.
Section 24(b) Interest paid Rs. 2 lakh
Section 80C Principal (including stamp duty and registration fee) Rs. 1.5 lakh

Also Read: Things You Need To Know Before Taking Out A Home Loan

Final Note

The Government of India has come with an initiative ‘’Affordable Housing for All’ so that anyone can own their dream house in India. And Rural home loans are offered to achieve this objective. These loans have zero to very less processing fees, flexible eligibility criteria, and minimal documentation. The Interest rates start from 8.05% p.a. to 13.75% p.a. with a maximum repayment tenure of up to 30 years for your loan. And the loan amounts range from Rs.2 lakh to Rs.75 lakh. This loan mainly helps farmers, agriculturists, etc to have their own dream home without hassle.