Home Loans

Found your fantasy house but struggling with the price tag? We can help with Home Loans designed for your needs. Our low interest rates and easy EMI plans can help unlock the door to your future.

Loan Against Property

Our Loans Against Property can help you through life’s biggest moments. Weddings, personal passions, educational fees or career changes - we’ve got you covered. Refinance any existing commercial or residential property at the best rates today.

Balance Transfer

With our Balance Transfer option you can transfer your existing home loan to Godrej and enjoy the benefits of a plan that works for you. Along with interest rates tailored to your comfort, enjoy higher eligibility, along with a Top-Up loan, to take care of your extra needs.

Plot Loans

Found the perfect spot to build your future? Our Plot Loans can help make it yours. Our loans offer you the financial help, low interest rates and flexible payment options you need to construct the home of your dreams.

Business Loans

We give you the courage to take that next step that your business needs. Godrej Capital Business Loans empower you with customizable financing solutions to grow your business to the next level!

Commercial Property Loans

Take your business to the next level with a Commercial Property Loan that finances construction, extension or improvement to make your business goals become reality. With plans designed for your life, you can rest assured that your business empire is in safe hands.


Wondering What Affects Your Home Loan Rate Interest? Let’s Find Out (Part I)

Ask the first thing they look at while opting for a home loan, and most borrowers would collectively point at the home loan rate of interest. The reason is simple. Home loan interest rate is directly proportional to EMIs paid by a borrower, affecting the overall cash outflow. Hence, it’s advisable to compare the interest rates and avail of a loan from a lender offering the most competitive rates.


However, have you thought about the factors affecting your home loan rate of interest. Two aspects affect your home loan interest rate - customer-centric and macroeconomic factors.


In this two-part series, we will dig deep into both. Part I of the blog will talk about the customer-centric aspects, while part II will focus on the macroeconomic ones.


Customer-centric Factors Affecting Home Loan Rate of Interest
Credit Score
Lenders pay close attention to your credit score while evaluating your loan application. A three-digit score, ranging from 300 to 900, reflects your creditworthiness. A good credit score (above 750) not only enhances your Home Loan eligibility but also increases the chances of availing of a loan at a competitive rate of interest.


A good credit score reflects prudent and responsible financial behavior, and lenders perceive you as a low-risk borrower. In other words, lenders are assured of loan repayment for borrowers with a high credit score. It gives you more negotiating power, and you can avail a home loan at a lower rate of interest.


To build a robust credit score:


  • Pay existing EMIs and credit card dues on time


  • Keep credit utilization ratio low


Equally essential is to constantly monitor your credit report and rectify any anomaly at the earliest.


● Job Profile

The job you are in plays a crucial role in determining the home loan rate of interest. If you are in a stable job that offers a competitive salary, you are more likely to get home loans at lower interest rates. This is because a stable job ensures you have a regular cash flow that will help you pay EMIs on time. Also, lenders evaluate the overall work experience to gauge the borrower’s growth prospects.


On the other hand, if you are a frequent job hopper, it raises questions about your credibility and repayment abilities, and lenders perceive you as a high-risk borrower. Therefore, they raise interest rates, which subsequently pushes up the EMIs. Therefore, make sure to stick to one stable job for a long time to benefit from lower interest rates.


● Debt-to-Income Ratio

Debt-to-income (DTI) ratio is the percentage of your monthly income that goes towards paying monthly debts. Along with credit score, lenders use this metric to analyze and determine borrowing risk.nA low DTI ratio signals a good balance between debt and income. On the other hand, a high DTI ratio indicates that a large portion of your monthly income is channelized towards paying existing debts.


If you have a high DTI ratio, it can increase your home loan interest rate. This is because lenders put you in a high-risk category with increasing chances of default. Also, a high DTI ratio raises a red flag and raises questions about your repayment capacity, pushing up the interest rate. Hence, it is advisable not to eat more than what you can chew and keep this ratio on the lower side.


● Property Location

While buying a home in a location with good amenities has its perks, it also affects the interest rate. On most occasions, a home located in an area with proper amenities and ready access to transportation invite lower rates This is because houses in such areas have higher resale value than in under-developed locations.


Also, properties at premium locations are pre-sanctioned by lenders, which brings down home loan interest rates. Therefore, it pays to buy a home in an up-and-coming locality.


● Down payment

Down payment is the amount you need to pay upfront, and it generally constitutes 15 to 20% of the property’s value. The lender finances the rest through a loan. The higher the down payment, the lower the loan quantum, and subsequently credit risk.


This subsequently helps in lowering the home loan interest rate. Thus, if you wish to secure a home loan at a lower interest rate, save aggressively and make a higher down payment.


As evident, almost all the customer-centric factors are within your control. Use them to your advantage to avail home loan at a lower rate of interest.


Godrej Capital is the financial services arm of Godrej Group which offers home loans, Loan Against Property and other secured loans. With innovative products and offerings, customers can get hassle-free loans on easy terms and conditions. Click here to know more about the offering.


Disclaimer: The above information is for illustrative purpose only. For more details, please refer to the product or service document and/or connect with our customer representative prior to making any financial decision.