How to Buy a Home with 0 Down Payment Home Loan in India

Home loan is a supportive hand that helps you buy your dream home even if it is out of your budget. Rather giving a huge chunk of your saving you can pay small fractions(EMIs) for longer period of time through effective home loan strategy. But is that all you need to pay for home loans? No. Home loans are oftenly associated with Down Payments. Let’s learn what actually down payments are and is it necessary to pay down payments while buying a home?

Down Payments Scenario in Home Loan

0 down payment home loans india

Let’s go to the basics to learn it. While purchasing an asset like Car, Vehicle or your dream home when you require financial help from external party, the down payment term comes into play. The third party rarely contributes 100% to your asset cost. It can pay a larger fraction of the cost of your asset leaving a small fraction to be paid by your end in cash. This amount that you need to pay yourself is known as down payment.

Got confused? Let’s learn this another way.

Suppose you saw a home and made your mind to purchase it. Its cost is Rs.40 Lakh. In this case, you can not afford this much of amount so you went to some third party for help. Let’s a XYZ bank. The bank agrees to pay home loan of Rs 25Lakh at 8.60% interest rate. This means the remaining amount of Rs. 15 Lakh is to be paid by yourself. Bank can assist you for 25 lakh only. This difference between the actual amount and the amount offered in Home loan is known as down payment.

The Home loan amount, as you know is paid in Equated  Monthly Installments(EMIs) which vary by bank to bank.

Hope you got the point this time.

Zero(0) Down Payment Home Loan India – Possible or Not?

Now the question arises, can you get a flat with zero down payment? Though it happens rarely but YES you can do so. There are certain terms and conditions that allows you to buy a home with zero down payment in India. Before we learn about those conditions, let’s see why down payment is good for you.

  1. It deepens the trust of lender on you as you are paying a significant portion of amount in cash
  2. It eases the burden of paying a 100% payment though in EMIs
  3. Interest rates on 0 down payment home loans are more as compared to others
  4. You have to be super attentive and regular while paying EMIs as single non-payment may out you in high risks by the lender

How to Buy a Home with Zero Down Payment – Home Loan Without a Down Payment

You can get a flat without a down payment if you have a very good credit history. Credit history is the record of all your transactions within a specific period of time. If lender finds your credit history good enough to offer 0 down payment home loan, he will agree else he’ll simply deny. Now it’s on you credit history whether you can get a 0 down payment home loan in India or not.

Hope it works for you!

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