Get a 25 Lakh Home Loan at Low Interest & Better EMI Options

Every person dreams of building or purchasing a home in a prime location. Obtaining a home loan can be beneficial to turn this dream into reality. Home loans provide financial support to borrowers and enable them to repay the loaned amount in EMIs (Equated Monthly Instalments) over a predetermined period.

Most individuals prefer purchasing flats in reputed housing societies by making a considerable down payment and financing the remaining amount. Usually, salaried individuals consider borrowing a 25 lakh home loan with affordable EMIs.

Read on to explore all you need to know to get a home loan of up to 25 lakhs at affordable interest rates.

Understanding Home Loans

A home loan is a secured loan where the lender’s collateral is your home. The borrower must repay the loan along with the applicable interest over a tenure agreed upon while applying.


The loan amount is often a percentage of the property’s worth. The borrower’s income, credit score, property worth, and the current state of the market are only a few of the variables that affect the loan amount and interest rate.

Factors Affecting Home Loan Interest Rates

Home loan interest rates play a crucial role in determining the overall cost of borrowing. Several factors influence these rates, including:

  1. Credit Score: A higher credit score indicates a lower credit risk for the lender, leading to a more favourable interest rate for the borrower.
  2. Income and Employment Stability: Lenders may provide reduced interest rates to borrowers with a stable employment and income history.
  3. Loan-to-Value Ratio (LTV): The loan-to-value ratio (LTV) is the percentage of the property’s value that a lender is willing to finance. Applicants can get lower interest rates with a lower LTV ratio.
  4. Loan Tenure: Longer loan terms could result in higher interest rates, while shorter tenures could result in lower rates but larger EMIs.
  5. Market Conditions: Economic fluctuations and RBI’s policies can impact home loan rates.
  6. Principal or Loan Amount: The amount you borrow from the lender is the principal or loan amount. Usually, a predetermined portion of the property’s worth is used to determine the loan amount. This can affect the interest rates applied to your loan.

The EMI of a 25 Lakh Home Loan: How to Calculate?

Consider the property value, the required loan amount, the payback term or duration, and the interest rate when calculating a 25 lakh home loan EMI.

To calculate the EMI of a 25 lakh home loan, you need to use this formula:

EMI = [P x R x (1+R)^N] / [(1+R)^N-1]


P = Principal amount

R = Monthly interest rate

N = Loan tenure in months

You can also use an online EMI calculator to calculate your EMIs without hassle. With the help of a calculator, you can also compare different loans to determine which loan would be the best deal for you.

Eligibility Criteria to Check Out

There are some common parameters considered by financial institutions and Non-Banking Financial Companies (NBFCs) to determine the eligibility of candidates applying for home loans.

However, specific criteria could also be applicable to each lender according to their requirements. Understanding the criteria required to be eligible for a home loan helps ensure the application process becomes smoother and easier for you. Let’s look at the list of terms you should be aware of.

Age Applicants should be between 21 and 65 years old.
Employment Status Self-employed/ Salaried
Income Minimum Rs 10,000 per month
CIBIL Score Above 700
Citizenship Indian
Work Experience/ Business Continuity (in years) Self-employed: 2-3 years

Salaried: 1 year

Loan-to-value (LTV) Ratio Up to 90% of the market price of the property
Property Type Completed/under construction project, land/plot, build on own land, buy land, and build a home

Tips to Get a 25 Lakh Home Loan at Low Interest

If you’re looking to secure a 25 lakh home loan at a low-interest rate, consider the following strategies:

Improve Credit Score

Checking and raising your credit score before applying for a home loan is essential. This can increase your eligibility for lower interest rates.

Compare Various Lenders

Different lenders may offer different interest rates, processing fees, and terms. Comparing various lenders can help you identify the best loan offers available.

Negotiate With the Lender

Don’t hesitate to discuss the loan terms with the lender. Negotiating can lead to a lower interest rate or better loan conditions.

Greater Down Payment

A larger down payment can lower the loan balance and, subsequently, the interest rate.

Choose Between a Fixed and Floating Rate

Choose between variable and fixed interest rates. While floating rates change based on the state of the market, fixed rates are stable over the term.

Maintain a Low Debt-to-Income Ratio

When evaluating your loan application, lenders take your debt-to-income ratio into account. Ensure it’s on the lower side.

Add a Co-Borrower or Guarantor

Adding a co-borrower or guarantor with a solid credit history will boost loan approval prospects and likely reduce interest rates.

Look for Offers

Some lenders provide unique home loan offers that offer more favourable terms for certain borrower groups, such as women, senior citizens, or government employees. These offers may come with lower interest rates, reduced processing fees, or extended repayment tenures. If you fall under these categories, you can get a better deal for your 25 lakh home loan.

Better EMI Options to Check Out for 25 Lakh Home Loan

It is essential to make the appropriate EMI choice since it affects your monthly spending plan and financial planning. Here are some EMI options to consider:

  1. Step-up EMI is appropriate for people with rising earning potential. The EMI is lower in the first few years and steadily increases over time.
  2. Step-down EMIs are the best choice for borrowers anticipating an income drop over time. The EMI starts higher and gradually gets lower.
  3. Tranche-based EMIs are an option if you’re purchasing a property still under development. Here, the loan disbursal and EMI payments are coordinated with the stages of building.
  4. Some lenders offer an EMI moratorium, allowing borrowers to postpone making their monthly interest payments for a set time, usually at the beginning of the loan term.


With careful planning, sound money management, and research, you can get a 25 lakh house loan at a low-interest rate with better EMI options. Before applying, ensure you improve your credit score, evaluate loan offers, bargain with lenders, and choose an EMI that fits your budget. The decision to purchase a home is serious, so carefully consider your ability to repay the loan before agreeing to it.

Page Contents