Availing the best deal on a home loan can be challenging, especially with numerous lenders coming up with different home loan offerings. Therefore, to help you to choose right home loan, we have enlisted some important pointers that you must make a note of while applying for a home loan.
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Interest Rate
The home loan interest rate plays a vital role in determining your monthly instalments. An attractive interest rate can not only reduce your repayment burden but also save a large sum in the long runl. You must consider boosting your credit score before applying for a home loan. This will not only improve your home loan eligibility but also help you avail the loan a competitive interest rate.
Processing Fee
Lenders usually charge a non-refundable processing fee in order to process your home loan application. The processing fee can range anywhere between 0.25% and 2% of the loan amount and it affects your overall cost of borrowing. With reputed lenders , you can apply for a home loan at a low processing fee and zero hidden charges.
Loan Amount
If you wish to avail a high loan amount, make sure that you have a regular and steady income along with a decent credit score of 750 or above. You can avail a home loan up to 90% of the property’s value, provided you have a high repayment capacity.
Choose Suitable EMIs
A home loan is a secured loan, and hence, defaulting on home loan can cost you your property. To avoid this, you must carefully evaluate your repayment capacity and settle for an affordable EMI. The longer the tenure, the lower will be your home loan EMI. However, you would end up spending more towards the interest outgo by opting for a long-term home loan.
To settle for an EMI that suits you the best, you can make use of a home loan EMI calculator. While it’s best to close the loan as soon as possible, you must not increase your monthly instalments beyond your repayment capacity.
Prepayment Norms and Charges
You can save on the total interest pay-out by closing your home loan before its specified tenure. A good way to pay off your home loan faster is by making part or full prepayment. You can use your surplus income such as bonuses, increments, etc., to prepay your home loan.
The prepayment norms and charges may differ from one lender to another. Therefore, ensure that you are well aware of the same before availing a home loan. This will help avoid any inconvenience later.
Check The Eligibility Criteria Beforehand
Before applying for a home loan, you must check the home loan eligibility criteria set by the lender. It’s advisable to settle for a lender with simple eligibility criteria, as it will reduce the rejection chances of your home loan application.With top lenders in India, , salaried individuals between 18 and 60 years, whereas self-employed applicants between 18 and 65 years of age can easily avail a home loan through a hassle-free online application process.
The above-mentioned tips will enable you to take a wise decision when choosing the right home loan for yourself. Lastly, you must invest sufficient time in learning about the nuances of your home loan agreement. In case of any query, do not hesitate in seeking the help of a financial expert.