The biggest investment of a middle-class Indian citizen is purchasing a house in India. However, many-a-time, even after saving money throughout their life, people are still unable to purchase a property of their choice. The reason being; costs of properties have increased so much so that people are unable to afford it on their own.
However, now they can forget their worries because there are a number of financial institutions in India that offer home loan at way lower interest rates than the loan sharks. Further, these new-age financial institutions even offer an additional discount of 0.05% on interest rates for women borrowers and co-applicants. Thus, today in this article, we will be discussing the basic concepts relating to housing loans in India, and they are here as follows:
Table of Contents
Why should I apply for a home loan?
You can make use of the financial assistance from a home loan to purchase a new property or to renovate any of your existing ones. You can even make use of financial assistance for home extension purposes. The best thing about the housing loans is the fact that you get to make flexible repayments in the form of EMIs (equated monthly installments). The financial institutions even provide us with an EMI calculator for computing and planning out the repayments in advance.
What is an EMI calculator?
An EMI calculator is an online tool that is available on the online websites for free. Thus, you can make use of this tool to calculate your installments on the basis of the principal borrowed amount, interest rates charged and repayment tenure opted by you. The interface of this tool is extremely user-friendly in nature; thus, any person can make use of it without any hassles.
How can I apply for a housing loan in India?
You can easily visit a bank or an NBFC (non-banking financial company) and easily apply for a home loan. However, there are eligibility criteria set by the financial institutions that you have to meet in order to make use of the financial assistance, and these eligibility criteria are here as follows:
- The first thing that the financial institutions check is your income source and job stability. Thus, ensure that you have spent a considerate amount of time at your current job (around 2 years) before applying for a home loans.
- The financial institutions also scrutinize your credit score and history; because it is the direct reflection of financial management and responsibility. A good score is anything above 700- CIBIL score range is in the range of 300 to 900. Thus, make sure that you make timely repayments on all your previous and current debts.
- The financial institutions also check your age and margin amount. The financial institutions mostly sanction the loan amount if you are in the age group of 21 to 35 years; because they want to ensure that you will be able to repay the loan amount before your retirement. Further, the margin amount is the capital sum that you have to shell out from your pockets.
Hope this article helped you to get an idea about the concepts pertaining to home loans in India. Good luck and all the best!