How to Get a Home Loan in Nepal | A step by step guide to home loan in nepal

Wondering how to get a home loan in Nepal? The process involves selecting a bank or financial institution, meeting eligibility criteria, preparing the necessary documents, and applying for the loan. Most banks in Nepal offer home loans with interest rates ranging from 8% to 15%, depending on your income, credit score, and collateral.

To qualify, you typically need a stable income source, citizenship documents, land ownership proof, and a down payment of 20-30%. In this guide, we’ll break down the step-by-step process, eligibility requirements, the best banks for home loans, and tips to increase your approval chances.

Real Estate, the real business all over the world has seen significant growth and progress in Nepal too, especially in urban areas like Kathmandu, Lalitpur, and Pokhara.

Due to high urbanization in the major cities, real estate is rapidly growing and the demand for residential and commercial properties is driven by urbanization. The real estate sector is also influenced by government regulations and land availability.

With rising property prices, most buyers can't even afford to pay in full upfront. So, home loans provide financial support by spreading payments over a longer period. Also, home loans come with tax benefits and structured repayment options which makes them attractive options for buyers. A home loan is the safest purchase for homeownership and is easily accessible.

There are some kay factors that affects approval for home loan in Nepal, they are listed below:

Income and employment
Loan amount
Down payment
Property valuation
Debt
Banking and transaction history

Eligibility of Home Loan in Nepal

Who Can Apply for a Home Loan in Nepal?

Applying home loans in Nepal has certain eligibility criteria set by banks and certain institutions. A person must be Nepalese citizens with stable income sources.

Age requirements

Minimum age : 21 years

Maximum age : 60-65 years

The age requirement varies by bank and various institutions.

Income criteria for salaried and self-employed individuals

Lenders assess income stability to ensure repayment capacity. The requirements vary based on employment type:

Salaried individuals

A person must have stable job in reputed company
Monthly income: NPR 25,000 - 40,000
Must have at least 1-2 year of experience
Employers must provide salary slips,bank statements and tax clearance certificates and need all documents.

Self employed individuals

Must have registered business operating for at least 2-3 years
Annual income : NPR 500,000 plus year
Income proof
Business should have positive cash flow and profit record

How Credit Score Affects Your Home Loan Approval

In Nepal, CIB (Credit Information Bureau) score is required while specific requirements vary by different banks, a minimum CIB score of 650 is generally required for home loans. Higher score can also improve approval chances and in better results.

Ways to improve your credit score before applying

Pay existing loans and credit card bills on time
Reduce your debt to income ratio
Limit multiple loan applications
Increase your savings and bank transactions
Maintain long term credit accounts
Avoid loan defaults or settlements

Interest Rates of Home Loan in Nepal

Fixed vs. Floating Interest Rates

Fixed interest rate: remains constant throughout the loan tenure or a fixed period
Floating interest rate: based on market conditions

Which one is better for you ?

You can surely choose a fixed interest rate if you prefer stability in EMIs and want to plan finances easily and you expect interest rates to rise in the future. You have a long term loan and don't want rate fluctuations.

If you want to take advantage of lower initial rates and are comfortable with EMIs fluctuations ,and can manage potential increases you can choose a floating interest rate .

If you can meet these criteria above you can choose which interest rate you want. ( must choose wisely)

Home Loan Interest Rates of Major Banks in Nepal

As already mentioned above the home loan conditions differ from banks and the rule of the banks. As of 2025 home loan interest rates offered by NIC Asia bank is ( fixed : 11.99% and floating: 7.75% plus ), Nabil Bank is (fixed: 12% and floating : 7.14 % plus ) .

For the most accurate and personalized information, it's advisable to contact the banks directly or visit their official websites.

How to Negotiate the Best Home Loan Interest Rate

Tips on getting lower interest rates

Improve your credit score
Compare rates across banks
Make a higher down payments
Negotiate with your bank
Maintain strong bank relationship
Avoid multiple loan applications

Step-by-Step Process to Get a Home Loan in Nepal

Choosing the Right Bank for Your Home Loan

Factors to consider when selecting a lender

1. Interest Rates

2. Loan Tenure

3. Processing Fees & Charges

4. Loan-to-Value (LTV) Ratio

5. Eligibility Criteria

6. Prepayment & Foreclosure Rules

7. Customer Service

8. Approval & Disbursement Speed

9. Reputation & Reliability

10. Special Offers & Discounts

Home Loan Application Process Explained

Step-by-step guide from application to approval

1. Research & Compare Lenders

2. Check Eligibility Criteria

3. Prepare Required Documents

4. Submit Loan Application

5. Pay Processing Fee

6. Bank Verification & Credit Check

7. Property Valuation & Legal Check

8. Loan Offer & Approval

9. Sign Agreement & Submit Collateral

10. Loan Disbursement

These are some important steps for the application approval, if followed you would get te approval.

What to Expect During the Loan Verification Process

Bank checks your income,property documents and credit history to ensure you have financial capacity to repay the loan. They verify it through :

Income verification

Salary slips and employment verification
Bank statements
Income tax reuters
Profit and loss statements

Property documents

Title deed and ownership papers
Encumbrance certificate
Sale agreement and builder documents
Land approval
Property valuations

Credit history verification

CIB score check (700+)
Loan repayment history
Credit loan burden
Loan enquiries

Banks use a combination of documents, credit reports, and verification calls/site visits to confirm a borrower’s income, property details, and creditworthiness. Any discrepancy can lead to loan rejection or delays.

Documents Required for a Home Loan in Nepal

Personal Documents Needed

Applying for a home loan you must showcase your personal documents. Here are some most commonly required documents for home loan:

Identity proof

Passport
Voter id
Pan card
License

Address proof

Passport
Bank statements

Income proof

Salaried individuals
Self employed

Bank details

Bank statements
Cheque

Passport sized photos

Note : if you're applying for a joint loan, the co-applicant will need to submit similar documents.

Property-Related Documents Required

Land ownership certificate

Purpose: is proof that land belongs to the borrower
Issued by: local government
Includes: name of owner, property boundaries, land survey number

Blueprints

Purpose: is a detailed architectural drawing or layout of the property
Issued by: architects or civil engineers
Includes: floor plans, dimensions of each room and plot area

Property valuation

Purpose: determines the current market value of properties
Issued by: certified valuer
Includes: properties conditions, comparison with similar properties in the area

Additional Documents for Business Owners and NRNs

Business registration

Certificate of incorporation
Partnership deed
Shop and establishment
GST registration certificate
Trade license

Tax clearance documents

Income tax return (ITR)
GST returns
TDS ( tax deducted at source returns )

Income proof

Profit and loss statements
Balance sheets
Cash flow statements
Auditors certificate

These are some additional documents for business owners and NRNs. These documents collectively help banks assess the financial health of your business, your repayment capability, and the risk involved in lending to your business.

Tips to Get Your Home Loan Approved Quickly

Here are some tips to get your home loans approved quickly and with best results. These are some topics that are in common.

Common Mistakes That Lead to Home Loan Rejection

1. Incomplete or incorrect documentation

2. Low credit score

3.Insufficient income or high debt to income ratio

4.Inconsistent history

5.Negative credit history

6.Lack of collateral

Errors such as incomplete documentation, poor credit history, and inaccurate or outdated information can delay or even deny your loan application.

How to Improve Your Loan Approval Chances

To increase your eligibility for a loan and speed up the approval process, it's essential to focus on improving your financial profile. These are some key steps mentioned below :

Improve your credit score
Ensure stable income and employment history
Provide complete documentation
Lower debt
Opt for a shorter loan term
Apply for right loan type

By focusing on these steps, you can increase your loan eligibility and speed up the approval process.

Understanding Hidden Charges and Fees

Processing fees, mortgage insurance, and prepayment penalties are additional costs often associated with loans.

Processing fees cover administrative costs for evaluating your loan and usually range from 0.5% to 2% of the loan amount.

Mortgage insurance protects lenders in case you default, particularly if your down payment is less than 20%, and typically costs 0.3% to 1.5% annually.

FAQs

1. What is the eligibility criteria for a home loan in Nepal?

To qualify for a home loan in Nepal, you need Nepalese citizenship, a stable income source, a good credit history, and sufficient collateral or a guarantor.

2. Which bank offers the lowest home loan interest rate in Nepal?

The lowest home loan interest rates in Nepal vary by bank, but major banks like Nabil Bank, Nepal Investment Mega Bank, and Himalayan Bank offer competitive rates starting from 8% per annum.

3. How much down payment is required for a home loan in Nepal?

Most banks in Nepal require a 20% to 30% down payment, depending on the total loan amount and the property valuation.

4. What documents are needed for a home loan in Nepal?

You need a citizenship certificate, income verification (salary slip or tax return), land ownership certificate, blueprints of the house, and a bank statement to apply for a home loan.

5. How long does it take to get a home loan approved in Nepal?

Home loan approval in Nepal can take 7 to 30 days, depending on the bank’s verification process and the completeness of your submitted documents.

6. What are the home loan interest rates in Nepal in 2024?

As of 2024, home loan interest rates in Nepal range from 8% to 15%, depending on the bank, loan amount, and repayment term.

7. Can non-resident Nepalese (NRNs) apply for a home loan in Nepal?

Yes, some banks offer home loans to NRNs, but they may require a local guarantor and a higher down payment.

8. What is the maximum loan tenure for a home loan in Nepal?

Home loans in Nepal typically have a maximum tenure of 20 to 30 years, depending on the applicant’s age and income.

9. Can I get a 100% home loan in Nepal without a down payment?

No, banks in Nepal generally do not offer 100% financing. You need to pay at least 20% to 30% of the property value as a down payment.

10. How to increase the chances of getting a home loan approved in Nepal?

To improve your chances of home loan approval, maintain a good credit score, have a stable income source, reduce existing debt, and submit all required documents correctly.

Conclusion

Home loans in Nepal are not too easy nor too hard to get, if you have the proper documents it's easy to get home loans.