Home Loans in Nepal: In today’s banking world, home loans have become quite a normal day-to-day activity. The banks give out billions of money to the public as home loans every year. The demand for home loan services keeps increasing as more people dream of owning a house.
This home loan service has been in the system for over 100 years but however, the trend took its height only in the last two decades. Borrowing money from a bank to buy or build a house has become a worldwide phenomenon.
Every country in the world is taking advantage of it. Speaking about Nepal home loan services, there is a huge rise in the demand for home loans by the public. Thousands of houses are constructed each year in Nepal.
To give a simple explanation. A house loan or home loan is the sum of money borrowed by an individual or company from a financial institution or bank to construct or purchase a house.
How to Get Home Loans in Nepal
Trying to explain a procedure to get home loans in Nepal will include other important points that need to explain separately. So, I won’t cover it in this single section. Instead, I’ll give you my personal point of view on what to do and what not to do when you decide to take a home loan in Nepal. A procedure that you should follow before applying for a home loan.
You’ll find most of the information on the web but when it comes to the procedure, you will find none. I’ll explain each important topic in a different section in this article.
Evaluate the cost of the house you want to buy or build. Doing this will cut down your expenses.
Research the best bank that gives home loans with a reasonable interest rate.
Get all the needed information from your family members, friends, and relatives.
Calculate the rate of interest, the EMI you’ll pay, and the year of loan completion.
Make two or more copies of all the documents needed for the loan approval process.
Understand the types of home loans. There are home purchase loans, land and building purchase loans, construction loans, extension/renovation loans, and loan takeover. Each loan type has a different loan amount and might vary from city to city.
These Documents Required
There are lots of documents and paperwork that you need to complete in order to get a loan home. Once your paper gets verified then only, you’ll be eligible to get a home loan in Nepal.
Below is the list of documents you’ll need while applying for home loans in Nepal.
2 Passport-size photos
Lalpurja (Landownership certification)
Salary Source certification
Negrita or Passport
Rajinama, bakaspatra, ansha-babda
Rental agreement (if applicable)
Relationship certificate (If applicable)
Building tax clearance certification
Audited financial statement of business income (if applicable)
Marriage certificate (If applicable)
Patta – Pension certificate (if applicable)
Bank account statement (6 months)
BluePrint and Trace map of house and land
Updated bluebook and route permit for income regenerate from vehicles.
Company registration (If applicable)
Char Killa Pramanit
For employment – salary certificate, work permit, valid passport, visa, payslip, and account statement.
PAN/VAT number (if applicable)
Approved house map
Latest tax paid receipt
AOA and MOA paper (if applicable)
Nirman Sampanna Patra
Partnership agreement (if applicable)
Ghar Kayam in Lalpurja
Office/Home map location
Who Are Eligible to Get Home Loans
Each bank has its own rules. The home loan eligibility might vary a little from bank to bank. But as a general rule, most of the eligibility criteria remain the same.
Here is the list of eligibility criteria that an applicant should possess to apply for home loans in Nepal.
The applicant or the co-applicant should be 18 years and above.
The applicant should have sufficient salary to pay the loan EMIs.
You should have a permanent job that gives a monthly salary.
For business owners, their company should have operated at least for 2 years.
The plot where the house is to be built should have at least 8 feet wide road.
The land should not have a fraud record, guthi, or Mohi.
All applicants should keep in mind not to indulge in land fraud and land paper manipulation. The paper should be genuine and the applicant should meet the required criteria.
Various Loans Facility Offered By Banks
As mention earlier, each bank offers unique services, rates of interest, and loan facility. When it comes to home loans in Nepal or any other types of loans. One rule does not apply to every bank. But there are some exceptions that apply to all banks.
Below are features and loan facility offered by banks of Nepal.
Banks offer up to 0.75% for the loan administration fees.
The interest fees could be anywhere from 1% to 7% depending on the banks which are less compared to private loans.
Banks also give an applicant valuation service for which they charge up to 5000NPR.
One facility that stands out from the rest is that you can pay the monthly EMIs a little late with a fee of 500NPR.
Most of the banks have quick and transparent loan processing. No hidden charge.
The loan duration could be up to 35 years depending on how long will it takes an applicant to pay the loan.
The banks give an application 12 months of moratorium period for building construction.
The interest could be reduced to the principal outstanding.
An applicant can apply for a loan from any given bank branch. They need not go to the head office to apply for the loan.
Banks give each customer personal throughout counseling.
Most of the banks are trying to simplify the required documents and document processing.
Most of the banks also give applicant insurance policy options to cover home loans. And most of the time their insurance premium is really attractive.
These are some features that most banks cover. Make sure to take part in the counseling process to take the best advantage of home loans.
If you are looking for home loans in Nepal make sure to follow all the important points mention in this article. It will make the process easy.
Also, understand that some banks will give you facilities above your expectation while some below your expectation. As mention earlier, do your research, talk to a bank representative. Get your family member involved who has banking knowledge.
It’s easy to get a home loan in Nepal but if you don’t follow the rules, it’s one of the hardest processes that you’ll ever go through. And lastly, respect the bank because they are there to help you not rob you.