Buying a home is a milestone in life. It is one of the most fulfilling personal achievements, but also entails a huge investment. In order to secure funding for purchasing your dream home, opting for a home loan is one of the most viable options. However, to ensure that you are availing of the most suitable offer for a home loan in India, you should thoroughly research the different lenders and compare their offerings in terms of the eligibility parameters, interest rates, and other loan terms.
The best loan offer is one that enables you to secure the funds you need and allows you to repay the loan comfortably without burdening your future finances. You can determine your eligibility as well as the amount for which you qualify by using the home loan eligibility calculator. In order to calculate the EMI you will be paying based on the loan amount, tenor and interest rate, use the handy home loan EMI calculator and plan repayment smartly.
To get an in-depth view of what you must look out for when applying for a home loan in India, read on.
Learn about the loan features and perks offered by different lenders
Different lenders offer different loan terms and conditions. As a borrower, it is important to compare the lenders you have shortlisted to choose the most favourable terms for your home loan in India. For instance, a few lenders may give pre-approved offers to existing customers with pocket-friendly terms. Check to see if you make the most of this. Similarly, some lenders may give you value-added services like a property dossier to help you understand the legal and financial aspects of becoming a homeowner while others may also offer property search services. You may also choose a lender with a higher LTV or one who offers a digital sanction letter with 100% online loan approval and sanction process. All this can contribute to making your experience easier and more convenient.
Use the home loan eligibility calculator to check if you qualify
Applying without knowing if you qualify for the loan can result in your application being rejected and can also bring down your credit score. To keep this from happening, check your shortlisted lenders’ eligibility criteria. Financial institutions offer the home loan eligibility calculator to make this easier. This digital tool takes into account all the important factors, such as your income, age and employment to give you an accurate estimate of whether you qualify for a home loan in India and even the potential home loan you can borrow. This helps you plan for the loan better.
Ensure that your credit score is good
Your credit rating is the score assigned to you after taking into account your repayment history and how often you apply for loans and credit cards. If you have previously defaulted on any loan or credit card payments, your score will be lower than average, making it difficult to get competitive interest rates for your home loan in India. So, check your score before you apply and try to ensure it is 750 and above. If you have a low score, it is prudent to increase it by paying off existing debt, lowering your credit utilisation, and not applying for any more credit. A high credit score will help you get more competitive interest rates and also better terms and conditions for your housing loan.
Be aware of home loan interest rates and charges
Interest rates vary depending on the lender but having a cursory knowledge of competitive interest rates in the market is important. This way, you can compare lenders with ease and choose the most affordable option. Also, keep in mind that there are factors under your control that affect the home loan interest rate you are offered. These include your credit score, income, age and other eligibility criteria. Apart from this, lenders have different charges such as processing fees, secure fees, document charges, penal interest, foreclosure charges and more that add to your borrowing cost. Ensure you factor them in and choose a lender who has nominal charges.
Choose your loan amount and tenor carefully
Your income is crucial for estimating your loan amount and tenor. Use the home loan EMI calculator to tweak the numbers to see the loan amount you can afford and then choose the repayment duration based on the EMI you can afford. A shorter tenor is better since it reduces the overall interest you pay but increases the monthly payment amount. A longer tenor results in a lower EMI amount but increases the total interest due. So, choose the best possible option for yourself to ensure repayment is stress-free.
Plan for the highest down payment you can afford
When you opt for a higher down payment for your home loan in India, it ensures a lower principal balance, resulting in reduced monthly payments for your loan term. This reduces your debt burden and helps you to pay off your loan within a shorter timeframe. As a borrower, remember that making a higher down payment will also mean getting the most competitive interest rates from a lender and better loan terms overall.
Keeping these factors in mind, you can choose a suitable offer for a home loan in India, such as the Bajaj Housing Finance Limited Home Loan. A high-value loan with competitive rates and attractive features such as a long and flexible tenor for easier repayment and simple eligibility terms, it is an ideal choice for financing your home purchase. To get started right away, apply online with the right set of documents.
