Best Home Loan Provider India: Comparing Interest Rates, Processing Fees

If you are planning to buy a house in 2025, comparing lenders on facts will save you real money. Two numbers matter most: the home loan interest rate and the processing fee. Public lender pages show that starting rates for leading lenders still cluster in the mid-7% to low-8% range this season (for the best borrowers), while fees typically run as a small percentage of the sanctioned amount or a capped flat charge. For instance, home loans from Bajaj Finserv come with interest rates as low as 7.45% p.a.

Why are rate comparisons tighter in 2025

Since late 2019, banks have linked most new floating-rate retail loans to an external benchmark, commonly the current repo rate set by the RBI. This linkage has tightened transmission: when the benchmark moves, EMIs adjust faster than in the old base-rate era. As a result, you now see narrower spreads between similar borrower profiles across lenders, even though each lender still adds its own risk premium.

What to check beyond the headline rate

A “from” rate is only the starting point. To truly judge a home loan, review these four items on each lender’s official page before you apply:

1.    Effective rate for your profile

Check lenders’ rates for salaried vs. self-employed applicants, loan-to-value (LTV), credit score, and property type. For example, large HFCs list different grids for salaried and self-employed borrowers.

2.    Processing fees (and caps)

Banks and NBFCs typically charge a percentage with minimum and maximum limits, or a flat fee by slab. Check the fee table and not just the promo banner, because caps and waivers vary by campaign. Major lenders publish these fee schedules on their sites.

Benchmark and reset frequency

Most banks benchmark floating home loan rates to the repo-linked EBLR; many HFCs use their own PLR with periodic resets. Knowing the reset date helps you plan prepayments and renegotiations.

Bounce, foreclosure, and conversion charges

Usually, foreclosure/part-prepayment charges are generally waived for individual borrowers on floating-rate loans. But still, read the fine print for exceptions and one-time “rate-conversion” fees that apply if you request a spread reduction mid-tenure. Lenders disclose these in their “fees and charges” sections.

Banks vs. NBFCs/HFCs: What’s different for you?

Functionally, both can offer a smooth home loan process; the difference is in interest rates, documentation flexibility, and speed.

• Banks: Frequently offer repo-linked rates with quick pass-through when benchmarks change. Starting rates at large banks, as noted, are publicly advertised in the 7.5% p.a. region for top profiles, with processing fees typically capped.
• NBFCs/HFCs: They compete on digital journeys, offer doorstep services, and even do tailored underwriting, which is useful if your income mix or property documentation is not standard. Home loans from Bajaj Finserv highlight profile-based pricing and follow a digital-first flow. For specific customer segments (e.g., professionals), its current public interest rate starts in the mid-7% to 8–10% bands depending on eligibility, and it discloses segment-wise processing fees on its website.

Top 4 banks: Home loan snapshot (2025)

1)    State Bank of India (SBI)

• Interest rate: Published as External Benchmark–linked (EBR + spread); live rate varies by profile (starting from 7.5% p.a.).
• Processing fee: 0.35% of the loan amount (minimum of Rs. 3,000 and maximum of Rs. 12,000 + GST).
• Why consider: Scale, branch reach, and salary-account tie-ups for quick sanction.

2)    Bank of Baroda

• Interest rate: Publishes product-wise EBR-linked rates; interest rates start from 7.45% p.a.
• Processing fee: 0.5% of the loan amount up to Rs. 50 lakh loan (minimum of Rs. 8,500 and maximum of Rs. 15,000). 0.25% of the loan amount for loans greater than Rs. 50 lakh (minimum of Rs. 8,500 and maximum of Rs. 25,000).
• Why consider: Bundled products [BT (balance transfer) + Top-up] and frequent festive offers.

3)    Union Bank of India

• Interest rate: Displays card rates and concessions for salaried/PMAY/BT on the home loan page. Interest rates start from 7.45% p.a.
• Processing fee: 0.5% of the sanctioned loan amount (up to Rs. 15,000 + GST).
• Why consider: Public-sector pricing with digital application options.

4)    Central Bank of India

• Interest rate: EBR-linked, with scheme-wise spreads published on product pages. Interest rates for home loans start from 7.65% p.a.
• Processing fee: 0.5% of the loan amount (up to Rs. 20,000).
• Why consider: Government-linked schemes, senior-citizen-friendly servicing.

Top 4 NBFCs/HFCs: Home loan snapshot (2025)

1)    Home Loans from Bajaj Finserv

• Interest rate (starting): 7.45%* p.a..
• Processing fee: Up to 4% of the loan amount plus GST.
• Why consider: Fast sanctions, digital KYC, flexible part-prepayment.

2)    LIC Housing Finance

• Interest rate: Slabs for salaried/self-employed shown on the official rate grid. Interest rates start from 7.5% p.a.
• Processing fee: Slab-based (e.g., fixed fee up to certain ticket sizes), ranging from Rs. 3,000 (home loans up to Rs. 25 lakh) to Rs. 50,000 (home loans above Rs. 15 crore) plus GST.
• Why consider: Deep distribution, reliability for first-time buyers.

3)    PNB Housing Finance

• Interest rate: “Starting from” rate and borrower-segment grids shared on the HFC’s site. Interest rates start from 8.25% p.a. (for salaried applicants).
• Processing fee: 0.35% of the loan amount (minimum of Rs. 2,500 and maximum of Rs. 15,000).
• Why consider: Competitive balance-transfer + top-up combos.

4)    Tata Capital Housing Finance

• Interest rate: Published on product page (starting from 7.75% p.a. for salaried applicants); final ROI depends on LTV, credit, and tenure.
• Processing fee: Up to 3% of the sanctioned amount plus GST.
• Why consider: Strong salaried ecosystem and ready-project tie-ups.

*Terms and conditions apply

Use a home loan calculator before you compare

A home loan calculator helps you test scenarios before you speak to the lender. Let’s see how you can use it:

• Affordability check: Enter the property cost, your planned down payment, and an interest rate that matches your credit profile (not just the lowest advertised rate). This shows you the EMI you can actually afford.
• Tenure-EMI trade-off: Stretching tenure lowers EMI but increases total interest; the calculator shows the exact trade-off month-by-month.
• Prepayment planning: Add annual prepayments (bonus, maturity proceeds) to see how many months you can shave off and how much interest you could save.
• “What-if” stress test: Nudge the rate up by 50-75 bps to see if your budget still holds after a reset.

Run the home loan calculator on at least three lender pages. Many banks/NBFCs host their own tools alongside fee tables; cross-check assumptions and see which EMI structure fits your cash flows best.

A practical, apples-to-apples way to shortlist

Create a one-page view for each lender:

• Rate for your band (salaried/self-employed, LTV bracket, credit score)
• Processing fee (percentage + min/max), and any festival waivers
• Expected EMI (from your home loan calculator runs)
• Conversion fee policy (cost to lower your spread later)
• Turnaround time (publishers often indicate “in-principle” timelines)

Shortlist the two best banks and two best NBFCs/HFCs that meet your documentation comfort and timeline. If you value digital speed and doorstep support, add home loans from Bajaj Finserv to your shortlist and request a personalised quote. The website spells out segment-specific pricing and charges so you can plug the exact figures into your home loan calculator.

Bottom line

In 2025, the best home loan is not just the one with the lowest headline rate; it’s the one whose effective pricing, fees, and reset terms match your profile and cash-flow reality. Start with verified lender pages, such as SBI’s public rate page for a bank benchmark, and the Bajaj Finserv website for a strong NBFC benchmark. Next, run your numbers through a home loan calculator until the EMI, tenure, and prepayment plan feel comfortable. By doing so, you can avoid surprise costs and lock in a loan that stays affordable through the cycle.