Home loans are perfect for someone who is looking to buy a home but does not wish to plunge into their savings. It helps you get a home loan to purchase your dream house. People who wish to buy their dream houses or homes can now easily find the best suited home loans according to their needs through numerous options available in the market.
Home loans are basically secured loans with various features and benefits that help an individual buy his/her desired residential property. Home loans help you make monthly repayment of EMIs instead of paying lump sum amount, which gives you long-term financial flexibility while having your own house as well. A home loan gives you the option to choose from a variety of payment plans including opting for different tenure periods, rates of interest, etc., which depend on your requirement and usage patterns.
But how do you find the best home loans in India that suit your needs as well as your affordability?
Here are a few tips to help you find the best home loan in 2021:
Tip No. 1: Research your options
To locate down the best home loans in India, it is advisable to first conduct a research on the different available lenders and compare their offers. For this, you can either manually search for various home loan and home improvement loans schemes online by visiting the official sites of lenders or look for a comparison tool that helps you make an informed decision based on interest rates, EMIs, processing fees, etc.
Tip No. 2: Compare Interest Rates and Processing Fees
After having located diverse home loan options from various lenders, compare interest rates offered by different lenders and choose one that suits your needs and requirements. While selecting a lender to take a home loan from, don’t forget to also consider their processing fees as well. You can go through various lenders’ websites to find out the interest rates they are offering. However, it is to be noted, that the interest rate on home loan depends on the applicant’s eligibility. If you meet the eligibility conditions perfectly, you get a loan at a low interest rate and vice versa.
Tip No. 3: Check your credit score
Make sure to check if you have a good credit rating, before applying for a home loan. Lenders check your credit history and calculate the risk-appetite while sanctioning the loan amount. If you don’t have an excellent credit history, it may be difficult to get an approval for a higher amount from many lenders. You can check your credit score by applying to the relevant credit bureau to know how scoring affects your ability of getting approved by lenders.
Tip No 4: Use a Home Loan Eligibility Calculator
While applying for a home loan, make sure to use an eligibility calculator, usually available at the lender’s website. This will help you estimate the maximum amount you can borrow based on your income, assets and other personal details like loan tenure and monthly instalment amount. In addition to this, it also shows how much down payment is required in accordance with the lender’s norms.
Tip No 5: Choose a suitable repayment plan
This is one of the most important aspects while taking out a home loan. When choosing a repayment plan, consider factors such as the interest rate charged by the lender, along with its prepayment charges that may apply if you opt for any restructuring scheme later on during loan tenure or after that. Make sure to choose a repayment period which suits your budget.
Tip No 6: Ensure that your documents are in order
Even the lenders themselves prefer it when a loan applicant has all necessary documents in place to avoid delay in processing. Lenders often review your proposal and offer you a loan only if they believe that you will be able to make timely repayments, hence have adequate documentation such as income proofs, etc, available at the time of application and processing.
Tip No 7: Save for the down payment
In order to avoid paying hefty interests and EMIs due to a large loan amount, make sure you have saved for the down payment which should be at least 20% of your home loan amount. The rest can be financed through your home loan.
Keep these things in mind when applying for a home loan to make your dreams come true.