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Who Is Eligible For A Rural Housing Loan In India?


Building your own house is still like living a dream for many people. You often would have thought of having your own house but might not have achieved it yet. Want to know more about the rural housing loan and how to apply for it? Want to know what is the eligibility criteria and the interest rate for applying for a rural home loan

Well, then this article will make your work easier by providing you with all the information you need to know about rural housing loans. In this article, you will get to know about rural housing loans, their interest rates, and their eligibility criteria. 

What is a rural housing loan and what is its aim? 

A rural housing loan is an initiative to provide you with financial assistance for helping you build your own house. You simply apply for it in a bank and the bank gives you the loan and you have to repay it in form of instalments over a set period. It focuses on the government’s motive of “affordable housing for all”.

It is a financial instrument that applies to everyone, whether you are self-employed or a salaried individual. It can not only be taken to construct a new home but also you can use it to renovate your existing house. 

Interest rates for all types of rural housing loans range from 8.05 percent to 13.75 percent per annum. You will also be given a decent period to pay your interest, which often can be extended for a maximum period of 30 years.

What are some of the benefits of a rural housing loan? 

Below mentioned are some of the exclusive features of a rural housing loan:

  • Low-interest rate:

The interest rate on rural housing home loans is often less and banks don’t charge you extra costs such as processing fees, penalties, etc. The interest rates vary from 8 percent to 13 percent in almost all banks. 

  • Quick approval:

Just like personal loans, rural housing home loans are also quickly disbursed, often within 48 hours. In some cases, if your debt history and track record have been good and banks find that you can easily repay, then you might even get that sanctioned in less than 2 days. 

  • Flexible tenure:

Often rural home loans provided by banks have a flexible tenure, which sometimes can even be stretched for 30 years. You can easily pay off a big amount in small instalments over 30 years. 

  • Easy eligibility:

The eligibility criteria are easy and fast, and most people seem to qualify for them. Also, you only need to show some legal documents to navigate through this. 

  • Government subsidies:

Government subsidies like the Pradhan Mantri Awas Yojana (PMAY) can help you get up to 2.67 lakh rupees if you are going to be a first-time homeowner.

  • Low loan margin requirements:

One advantage is that rural housing loans often have low loan margin requirements ranging from about 10 percent to 20 percent. 

What is the eligibility you must have to qualify for the rural housing loan? 

Here are the eligibilities you must have to apply for a rural housing loan:

  • Nationality:

The benchmark requirement is that you must be an Indian by origin to qualify for applying for a rural housing loan

  • Age limit:

You must be at least 21 years old or above to be able to apply for a rural home loan. The upper limit of the age must be less than 70 years. 

  • Employment:

You can be a salaried individual or a self-employed person to apply for a rural housing loan. You can also apply for it if you are an agriculturist, or you have any agricultural affair based in a rural area. 

  • Work experience:

In whatever field you are working, you should at least have a minimum of three years of work experience to get a rural home loan. This varies from bank to bank, but three years can be taken as an average. 

  • Single or joint applicant:

You can either be a single applicant, where you apply for the home loan for yourself or you can also be a joint application where you apply with other members of the family like your parents, siblings, wife, children, etc. 

Documentation requirements for a rural housing loan:

Here is the list of documents that are required to apply for a rural housing loan in India:

  1. Your proof of identity:

You have to show your identity proof through an Aadhar card, Voter-ID card, PAN card, or other KYC documents. 

  1. Your proof of income:

To show your income proof for eligibility for rural housing loans, you have to show your bank statements, IT returns, salary slips, credit history, etc., if you are not an agriculturist. In case you are an agriculturist, you have to show your last 6 months’ bank statements, legal documents of agricultural lands, etc. 

Documentation requirements vary from bank to bank, but your ID proof and your Income proof are mandatory. 


A rural housing loan can fulfil your dream of owning a house in your name, the very purpose for which it came into being. Before taking a loan, contact your bank executives regarding the dos and don’ts. You can also use a rural housing loan calculator to check how much loan you should be borrowing. 

If you want to know more about home loans, personal loans or corporate loans, visit Piramal Finance. They have many services and content regarding home loans, personal loans, loan calculators, investments, etc.