Imagine you want to buy a property in your dream city. You would have to go through the hassles of visiting places, check the locality, the amenities, transportation, safety and most importantly how to fund your dream home. Naturally, you will opt for a housing finance to fulfil your wish of owning your house. In olden days, people had to visit branches of several banks and finance companies, collect information leaflets, sit and compare interest rates with financial expert, decide an affordable EMI and finally make an application. It was tedious and consumed a lot of time and energy.
Thanks to the internet, customers can now conduct the entire process of applying for home loans without even stepping into the lender’s office. Right from a cosy corner of your rental homes or offices, you can compare interest rates, processing fee, loan amount, EMIs, tenure, repayment options and zero in on a particular lender. There are aggregator sites that will give you a clear idea on how your home loans would look like across different lenders and all this under a single umbrella. You can pick the one that meets your financial requirements and offers affordable EMI options. You can check the company reputation, its star ratings and customer reviews to build an individual opinion before choosing any particular bank or non-banking finance company.
Here’s a simple guide to follow when you apply for home loans through leading banks or finance companies:
Start exploring the internet and see the different kinds of home loans available for you such as new home loan, loan for the resale property, home improvement or home extension loan, plot loan, etc. Study the interest rates, eligible loan amount and EMIs offered to you. Read the fine prints carefully; don’t miss on additional charges like processing fee, cheque bounce charges, penalty charges, terms, and conditions, etc.
The interest rate would be the crux of any form of a loan. Banks and NBFCs offer different home loan interest rates for different customers and tenure time. It would be based on eligibility factors like income source, job or business stability, debts, number of dependents, and most importantly your credit score. Usually, lenders offer fixed or floating interest rates – under fixed rates, your EMIs you pay stays constant through the loan tenure and under floating rate it will be based on the market fluctuations. Lenders offer home loan annual, monthly or daily rest.
The loan tenure plays important role in deciding your monthly EMIs and has a direct impact on the interest rate. Longer tenure means smaller EMIs but more interest rate you would have to pay and smaller tenure means higher EMIs but less interest rate you will pay to the bank or NBFC.
Lenders will never give complete funding for your home project. Based on the eligibility factors you would be qualified for 80-85% of the property value. You need to be prepared with the margin money of around 15-20% ready before you approach the lender to make an application for home loan.
When you apply for home loans at an early age such as your late 20s or early 30s you would be able to negotiate with the lender for low-interest rate deals. Lenders are ready to negotiate with the applicants who are young at age, have good income source and credit score.
They come up with round the year discounts especially during the festive seasons like Diwali, Eid, Christmas, Ganesh Chaturthi, etc. so that the customers stay on the winning side!