Considering These Points Can Help You Avail a Housing Loan Much More Effortlessly!
With home loan interest rates reaching their lowest in years, it is no surprise that many borrowers apply for home loan plans for property purchases. These loans can cover up to 80-90% of the total cost of the property. However, it is important to be aware of certain things before applying for such a loan. Not knowing these could possibly result in problems in the future when it is time to repay the loan.
To ensure that does not happen, here are 5 points that need to be focused on while taking a home loan:
- Interest rate of the home loan
One of the most important factors that borrowers look at while they apply for home loans is the interest rate. This is because even a slight difference in the interest rate can have quite an impact on the monthly instalments of the loan. This is why it is so important to choose a plan that offers you an affordable home loan interest rate.
- Eligibility criteria and documents required by the lender
Not knowing the lender’s home loan eligibility criteria could lead to your application getting rejected. Also, all the documents required for home loan should be submitted to the lender without any discrepancies. The eligibility criteria and documentation requirements could differ as per each financial institution’s terms and conditions, which is why it is important to verify these things before kick starting the application process.
- Your credit score
No matter what type of loan you are applying for, any lender will check your credit score before approving the application. Having a bad credit score can lead to lenders rejecting your loan application, or if it gets approved, you may not get the loan amount that is required at a high interest rate. On the other hand, lenders prefer borrowers with good credit records (750 or more) and can offer them high loan amounts at lower interest rates.
- Home loan EMIs
To ensure that the loan is repaid without any financial struggles, it is important to check whether the home loan EMIs are affordable or not. For this, you can make use of a home loan EMI calculator, which will display the results of your home loan’s monthly instalments. All that the home loan calculator needs are the loan amount, interest rate, and repayment tenure to provide the home loan EMI value.
- Additional fees
Many borrowers make the mistake of thinking that the only expense they incur is to pay off the home loan’s monthly instalments. However, it is also important to note that there are some lenders that charge additional fees, such as the processing fees, which are often non-refundable.
While repaying a home loan, any delay in the repayment of its monthly instalments could affect your CIBIL score. This is why it is best to make sure the loan plan is a suitable one. Consider numerous loan plans before choosing one as this will help you understand which lender is offering the best deal.
