Know How to Get Home Loan Without or Minimum Down payment?

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03 MAY, 2023

In India, as per Reserve Bank of India (RBI) guidelines, banks cannot lend 0 down payment home loans. They can lend only up to a certain limit on the purchase cost of a property. Therefore, by applying for a home loan, you can finance up to 75-80% of your property purchase, whereas the remaining 20-25% has to be paid by you in the form of a down payment. While there’s no way to borrow 0 down payment home loans, there are certain ways through which you can arrange funds for the same.

Common Easy Ways To Get Your Down Payment Funds for Home Loan

Take an unsecured loan

If you don’t have enough funds to buy home without deposit, an unsecured loan can come to your rescue. For example, if the value of your property is Rs 50 lakhs, and you manage to get a home loan of Rs 40 lakhs, you can avail of a personal loan of Rs 10 lakhs to arrange money for the down payment. A decent credit score of 750 or above will help you avail of both a home loan and a personal loan at an attractive interest rate. Thus, try to improve your credit score before applying for any kind of loan.

Borrow from your friends or family

It’s no secret that buying a house is an expensive affair. It will be a blessing if your friends or family members offered a helping hand. Check how much downpayment to buy a house will you need and ask them if they can help. It’s an easy way to arrange funds and can save time and energy.

Utilize your investments

If it were possible everyone would want to borrow a house loan with no down payment but since that is not possible it’s always better to start investing early. A good investment portfolio can help you in many ways. You can pull up funds from your investment to take care of the down payment. Moreover, you can also consider availing of a loan against fixed deposits or mutual funds for arranging the required amount for the down payment. As these would be secured loans, the interest rate offered will likely be lower than an unsecured personal loan. Consequently, the repayment burden will also be lesser.

Take a loan from your employer

Quite a few employers offer general-purpose loans at low-interest rates to their employees. The process of availing of such loans is usually hassle-free and requires minimal documentation. Once you find out how much downpayment to buy a house, you will need you can make use of it to arrange funds for the down payment on your property. Your relationship with the employer and tenure served in the organization may play a crucial role in such cases.

By making a large down payment and borrowing a lesser amount, you can reduce your loan repayment burden to a great extent. Ensure to settle for a tenure that suits you the best. This will make sure that your home loan EMIs are affordable and reduce the chances of a default. At Kotak Mahindra Bank, you can avail of a home loan with flexible repayment tenure and attractive home loan interest rates. So why wait? Apply for a home loan and take your first step towards purchasing your dream property, today.

Additional Read: Should You Take Another Loan to Arrange for Home Loan Down Payment - Explained!

Considerations for Zero Down Payment Options

Zero down payment home loans India cannot be given by banks as per RBI’s guidelines but you can consider other options such as zero downpayment financing. With this option, you will be able to make a purchase of appliances that are expensive, but it is not applicable for a property.

Conclusion

Planning ahead of time is always a good idea when you’re considering borrowing a house loan with no down payment. Having enough funds in your account is going to save you from all the stress that comes with the repayment of loans. Relying solely on zero down payment home loans India might not prove to be the best decision in the long run. Since you can’t buy home without deposit you should allocate funds to make the minimum down payment for a home loan.

Home Loan without Down Payment FAQs

What is the minimum down payment for home loan?

The minimum down payment for home loan in India is at least 20% of the price of the property you’re purchasing. Most banks will expect you to pay at least this amount when you borrow a loan from them.

How much down payment for home loan of 50 Lakh do I need to pay?

If you consider a minimum down payment for home loan you will have to pay 20% of the price of your property. If the price of your property is 50 lakh, 20% of 50 lakh would be 10 lakh. 10 lakh should be the down payment for your house if it is priced at 50 lakh.

What are the disadvantages of a large down payment? -H3

When you are deciding how much down payment for home loan you have to pay, thinking of a large amount in the form of down payment might lead to the following disadvantages-

It might cause you to use your savings, retirement, or investment money
You will have to wait for a long time before you can enjoy the benefits of a large downpayment.

Can I get zero down payment home loans?

It is not possible to get zero down payment home loans, however, there are several ways in which you can arrange for funds to pay minimum down payment for home loan like asking your friends and family, using the money you have invested, liquidating some assets, etc.

Can you get a 100% home loan?

According to RBI’s guidelines, you cannot get a 100% home loan. Most lenders ask you for 20% of the property value as a minimum down payment for a home loan in India but it varies with each bank. Zero down payment home loan India is not something you can expect any financial institution to give.