Home loans are typically the go-to option to finance this dream Houses hold an aspirational value in Indian society, setting a benchmark for an individual’s success. As a result, this aspirational value often leads people to set out on the quest to finance their own home, the moment they have a steady income.
purchase. However, not everyone can meet the eligibility criteria set by traditional financial institutions. When met with multiple rejections, many form the misconception that owning a house is not meant for everybody.
This is where Housing Finance Companies emerge as a possible credit avenue. These home loan companies are known to have flexible eligibility criteria, helping you finance your property purchase without a hitch.
Interested to know more about HFCs? Read on as we discuss these entities in detail, comparing them with banks, and exploring their advantages and disadvantages.
What is Housing Finance Company?
Housing Finance Companies, or HFCs, are entities that are governed by the Companies Act 1956. These entities were initially regulated by the National Housing Bank (NHB). However, the regulatory power was later shifted to the RBI in 2019.
Initially, they were introduced to address the increasing housing loan demands by extending credit facilities to a diverse range of income groups. However, today these corporates have become a significant source of home loans.
As of now, HFCs have managed to surpass banks in terms of loan disbursement volume. This is mostly due to their flexible lending practices. Today, increased popularity and growth in demand have led to the operation of more than 25 home loan companies in India.
List of Best Housing Finance Companies in India
Looking to finance your dream home? Here’s a list of top housing finance companies in India known for competitive rates, flexible terms, and reliable customer service.
List of HFCs in India allowed to accept Public Deposits
Aadhar Housing Finance Ltd. (formerly DHFL Vysya)
Can Fin Homes Ltd.
Cent Bank Home Finance Ltd.
HUDCO
ICICI Home Finance Ltd.
LIC Housing Finance Ltd.
Manipal Housing Finance Syndicate Ltd.
PNB Housing Finance Ltd.
Sundaram Home Finance Ltd.
List of HFCs allowed only those Public Deposits that have been approved by the National Housing Bank (NHB)
GIC Housing Finance Limited – A subsidiary of GIC, provides a wide range of housing loan solutions across India
Ind Bank Housing Limited – Promoted by Indian Bank, it caters to affordable housing needs with a focus on salaried and self-employed individuals.
National Trust Housing Finance Limited – Based in Chennai, it provides housing finance to lower and middle-income groups.
REPCO Home Finance Limited – A government-promoted company offering loans primarily in South India, known for quick approvals and flexible repayment options.
Saral Home Finance Limited (Formerly Vishwakriya Housing Finance Limited) – Rebranded to expand reach, it focuses on financial inclusion by offering simple, transparent housing loan products to underserved communities.
List of Housing Finance Companies not eligible for accepting Public Deposits
Adani Housing Finance Private Limited
Aditya Birla Housing Finance Limited
AGRIM Housing Finance Private Limited
Aham Housing Finance Private Limited
Altum Credo Home Finance Private Limited
Anand Housing Finance Private Limited
APAC Housing Finance Private Limited
Aviom India Housing Finance Private Limited
Baid Housing Finance Private Limited
Capri Global Housing Finance Limited
Capital India Home Loans Limited
Motilal Oswal Home Finance Limited
Compare Interest Rates of Top Housing Finance Companies in India
Name of Lender
Up to Rs. 30 Lakhs
Above Rs. 30 Lakhs & Up to Rs. 75 Lakhs
Above Rs. 75 Lakhs
Tata Capital Housing Finance
8.75% onwards
8.75% onwards
8.75% onwards
LIC Housing Finance
8.25% onwards
8.25% onwards
8.25% onwards
Bajaj Housing Finance
8.25% onwards
8.25% onwards
8.25% onwards
PNB Housing Finance
8.50% – 14.50%
8.50% – 14.50%
8.50% – 11.45%
Repco Home Finance
9.60% onwards
9.60% onwards
9.60% onwards
GIC Housing Finance
8.80% onwards
8.80% onwards
8.80% onwards
Sammaan Capital(Formerly known as Indiabulls Housing Finance)
8.75% onwards
8.75% onwards
8.75% onwards
Aditya Birla Capital
8.60% onwards
8.60% onwards
8.60% onwards
ICICI Home Finance
9.30% onwards
9.30% onwards
9.30% onwards
Godrej Housing Finance
8.55% onwards
8.55% onwards
8.55% onwards
L&T Finance
8.65% onwards
8.65% onwards
8.65% onwards
Top Housing Finance Companies in India
Here are some of the top housing finance companies in India known for their reliability, customer service, and competitive home loan offerings.
LIC Housing Finance
LIC Housing Finance, an associate of Life Insurance Corporation of India, offers home loan schemes tailored for salaried, self-employed, and pensioners with competitive interest rates.
Feature
Details
Interest Rate
8.25% onwards
Loan Amount (LTV)
Up to 90% of property value
Tenure
Up to 30 years
Processing Charges
Flat Rs. 3,000
PNB Housing Finance
PNB Housing Finance offers attractive home loan solutions with quick approvals, flexible repayment options, and a strong presence across urban and semi-urban India.
Feature
Details
Interest Rate
8.50% – 14.50% p.a.
Loan Amount
Rs. 8 lakh onwards
LTV Ratio
Up to 90% of property value
Loan Tenure
Up to 30 years
Processing Charges
Up to 1% of loan amount + GST
Tata Capital Housing Finance
Tata Capital Housing Finance offers tailor-made home loan solutions with minimal paperwork and competitive interest rates to cater to modern homebuyers.
Feature
Details
Interest Rate
8.75% p.a. onwards
Loan Amount
Rs. 5 lakhs – Rs. 7.5 crores
Loan Tenure
Up to 30 years
Processing Charges
Up to 0.50%+GST
Godrej Housing Finance
Godrej Housing Finance provides affordable and flexible home loans, focusing on transparency and digital-first services for a seamless customer experience.
Feature
Details
Interest Rate
8.55% p.a. onwards
Loan Amount
As per applicants’ credit profile subject to the caps on LTV ratio set by the RBI
Loan Tenure
Up to 30 years
Processing Charges
3% of the loan amount
Sammaan Capital
Sammaan Capital focuses on making home ownership accessible to underserved segments through flexible loan structures and affordable EMI plans.
Feature
Details
Interest Rate
8.75% p.a. onwards
Loan Tenure
Up to 15 years
Processing Fees
0.50% onwards
Piramal Capital & Housing Finance
Piramal offers innovative and personalized housing finance solutions across urban and semi-urban markets with an emphasis on affordable housing.
Feature
Details
Interest Rate
9.50% p.a. onwards
Loan Amount
75% to 90% of property value
Loan Tenure
Up to 30 years
Processing Charges
Up to 1% of the loan amount
Aditya Birla Housing Finance
Aditya Birla Housing Finance provides home loans with a customer-first approach, fast disbursal, and options for both salaried and self-employed individuals.
Feature
Details
Interest Rate
8.60% p.a. onwards
Loan Amount
Up to 90% of property value
Loan Tenure
Up to 30 years
Processing Charges
Up to 1% of loan amount + GST
GIC Housing Finance
GIC Housing Finance, promoted by General Insurance Corporation, delivers cost-effective home loans for individuals looking for property purchase or construction.
Feature
Details
Interest Rate
8.80% p.a. onwards
Loan Amount
75% to 90% of the property value
Loan Tenure
Up to 30 years or retirement age (60 yrs. for salaried and 70 yrs. for self-employed individuals)
Processing Charges
Rs. 3,000 + GST
ICICI Home Finance
ICICI Home Finance, part of the ICICI Group, offers housing finance to salaried and self-employed individuals with easy eligibility and digital support.
Feature
Details
Interest Rate
9.30% p.a. onwards
Loan Amount
Rs. 3 lakhs – 5 crores
Tenure
Up to 25 years
Processing Fees
0.75%-3%
Key Differences Between HFCs and Banks
There are numerous differences between the operations of a bank and a housing finance company. The following table offers a glimpse into these differences:
Criteria
Banks
Housing Finance Companies
Interest Rates
They offer home loans at comparatively lower rates
They have slightly higher interest rates for home loans
Flexibility
Banks display limited flexibility, involving more comprehensive and rigorous documentation and processes
HFCs facilitate greater flexibility, with streamlined procedures and less intensive paperwork requirements
Credit Facility
They provide hybrid term loan facilities based on consistent EMI payments and good credit scores.
HFCs do not offer hybrid term loan facilities or additional credit facilities on sanctioned loans.
Documentation
Banks are known for lengthier and more complex documentation procedures
HFCs feature more efficient and faster documentation processes
Disbursement Time
Characterised by longer processing time for loan disbursement
Recognised for quicker loan sanctioning and reduced processing time
CIBIL Score Requirements
Banks adhere to strict CIBIL score criteria, often declining applicants with lower scores
HFCs are known to offer some flexibility for applicants with lower scores
Benefits of Borrowing from a Housing Finance Company
Specialized Services
HFCs focus primarily on home loans, offering tailored products and expert support to suit different borrower needs.
Flexible Eligibility
Compared to banks, HFCs often have more lenient eligibility criteria, making it easier for self-employed or low-income applicants to get approved.
Competitive Interest Rates
Many housing finance companies offer attractive and competitive interest rates to make homeownership more affordable.
Faster Processing
HFCs usually provide quicker loan approvals and disbursals, streamlining the home buying process.
Diverse Loan Products
From home renovation loans to plot purchase loans, HFCs offer a variety of housing-related financial products.
Customer-Centric Approach
Their personalized service and focus on customer satisfaction often leads to a smoother borrowing experience.
Advantages of Housing Finance Companies
HFCs offer a few unique set of advantages to their customers, enabling them to become one of the most sought-after entities for housing loan solutions. These include:
Advantages
Reason
1. Specialisation in Housing Finance
Housing Finance Companies have a focused expertise in housing finance. Since these companies are only limited to the housing segment, they possess in-depth knowledge and offer tailored solutions for housing-related financial needs. This specialisation allows home buyers to experience informed and customised services.
2. Flexibility in Loan Approval
Housing Finance Companies are known for offering greater flexibility in the home loan approval process. This includes a more accommodating approach to credit score and income verification. Where traditional financial institutions usually have stringent eligibility criteria, HFCs emerge as a better and more beneficial alternative for borrowers facing loan rejections.
3. Serving Lower Income Segments
Usually, commercial banks are more inclined towards providing property financing solutions to individuals with a high credit score. This is because banks prefer applicants who are reliable and are less likely to default on loan repayment. Such a tendency leaves out a majority of the low-income segment. HFCs are known to reach out to this segment of the population by providing lenient home loan solutions. This accessibility helps promote house ownership among a broad spectrum of society.
Disadvantages of Housing Finance Companies
Similar to other entities, Housing Finance Companies also have some disadvantages that customers should be wary of. These include:
Disadvantages
Reason
1. Higher Interest Rates
HFCs are focused only on the housing segment of the nation. Such a hyper-focused nature of services leads to them charging a higher interest rate as compared to the ones offered by standard commercial banks. A higher interest rate can be a significant disadvantage to borrowers as it increases the overall loan amount significantly.
2. Limited Financial Products
HFCs have an edge over banks as they reach out to the low-income segment of the population. However, unlike traditional banks, HFCs offer a limited number of financial products and services. This puts them at a disadvantage since customers usually look for a one-stop shop for all of their financial needs.
3. Limited Branch Network
Many HFCs have fewer branches compared to banks, which can make it harder for customers to access in-person support or services.
What Should You Opt For?
The final decision to opt for an entity between banks and HFCs depends on your individual needs and preferences. If you have an already established relationship with a bank and are meeting its eligibility requirements, opting for a bank will be more beneficial since these offer lower interest rates.
On the other hand, if you are seeking flexibility in loan eligibility criteria and are looking to secure a loan quickly and efficiently, HFCs are a good choice.
Conclusion
Housing Finance Companies play a pivotal role in the Indian housing sector by catering to the diverse needs of homebuyers. Owing to their flexible eligibility criteria, robust customer service, efficient documentation, and reduced processing time, HFCs have cemented their place as one of the best lending companies for home loans.
That said, HFCs are not the only entities offering affordable and flexible home financing solutions. Non-Banking Financial Companies (NBFCs) are also known to be a good alternative for securing home loans.
In the current housing segment, Tata Capital home loans emerge as the most attractive and affordable home financing solution. Known for its streamlined application process, swift approval, and instant loan disbursement, Tata Capital has cemented its name as one of the best home loan providers in India.
Further, Tata Capital’s home loan EMI calculator helps you plan your EMI and tenure with ease. Visit the Tata Capital website today!
Which body regulates Housing Finance Companies in India?
The Reserve Bank of India (RBI) regulates Housing Finance Companies (HFCs) in India, following the transfer of regulatory authority from the National Housing Bank (NHB) in 2019.
What is the role of NHB regarding Housing Finance Companies?
The National Housing Bank (NHB) now acts as a refinance and promotional agency, supporting HFCs through refinancing, housing development, and credit-related guidance, but not regulation.
How many Housing Finance Companies are there in India?
As of now, there are 80+ registered Housing Finance Companies in India with valid Certificates of Registration (CoR), monitored and updated by the RBI.
Where can one find a list of companies whose CoR has been canceled by RBI?
The RBI publishes an updated list of HFCs whose Certificates of Registration (CoRs) have been cancelled on its official website under the Housing Finance section.
HFCs are doing functions similar to banks as banks also provide housing loans. What is the difference between banks & HFCs?
While both banks and HFCs provide home loans, the key difference is that HFCs cater to a niche housing loan sector, especially for low-income individuals, with faster processing times while banks offer a broader range of financial products.
Which Housing Finance Company is best for home loans?
Tata Capital Housing Finance, LIC Housing Finance, HDFC Ltd., and PNB Housing Finance are among the best HFCs due to competitive rates, flexible tenures, and high loan-to-value options.
28 April 2025
10 mins read
Previous Post
