Your Guide to Finding the Best Home Loan Scheme
Buying a house means a series of challenges, challenge to choose the home loan scheme, challenge to decide the best lender for a home loan, challenge to compare the home rates of different lending institutions. And apparently, the first and the foremost step is choosing the right home loan provider.
Various banks and non-banking financial institutions provide home loans to people and may also accept your application. However, you must do detailed research about the lending institutions and choose the best lender for a home loan based on the following parameters.
Factors to keep in mind while deciding about the best bank for a home loan:
Interest Rate: One of the most critical factors to decide about the home loan is to check home loan interest rate of various lending institutions. Lower home loan rates mean you can comfortably repay the loan amount every month without any delay, and similarly, high home loan interest rates put a massive burden on your pockets every month.
Along with that, various lending institutions offer fixed and floating rates of interest. Fixed Interest Rates remain static throughout the loan tenure and on the contrast floating rate of interest keeps on changing with the market conditions. Borrowers can decide between both based on the risk-taking ability.
Fees & Other Charges: Along with the home loan interest rates, it is significant to compare other hidden charges on a home loan. The home loan fees and expenses include processing fee, prepayment costs, down payment, valuation fees, etc. Along with that essential terms and conditions related to home loan sanction, disbursal, or repayment must be appropriately checked before deciding about the lender to avail a home loan.
Turnaround Time: The time taken by every lender for processing and sanctioning of loans varies. Usually, banks take around 10-15 days for processing of a home loan and additionally 3-5 days are taken for disbursal of loan. Home loan borrowers must shortlist the banks which have low turnaround time.
Services Provided by Lender: Financial institutions also provide several home loan services like home loan tax certificates, part-closure services and reduction in the tenure/EMI after partial repayment etc. Thus, you enquire about these services before deciding about the home loan lender.
Eligibility Criteria: Before applying for a loan, borrowers must also check the specific eligibility criteria to avail a loan. Home loan eligibility parameters include age, income source, employment stability, credit history, LTV, property type etc. You can use the Online Home loan eligibility calculator to determine your home loan eligibility.
Credit Score: Checking the credit score is also a crucial factor to avail a home loan. If the borrowers have an excellent credit score, then it indicates that the borrowers can repay the loan on time and vice-versa. If borrowers have a poor credit score, then it may lead to rejection of home loan applications or banks may charge you higher interest rates on loan. You can get a free credit score online at CIBIL website or an online marketplace like Myloancare, Paisabazaar etc. Having knowledge about your credit score can help you to take suitable measures to improve your credit score, and you can also raise a complaint if you find any discrepancy in the credit report to the respective bank or CIBIL.
Conclusion: Thus, before comparing the different lending institutions based on the above parameters, you can contact the shortlisted banks to get the best home loan offers. If you have a poor credit score, you can add co-applicants to improve your home loan eligibility. If you have an existing relationship with the lending institution, it can further help you to get the best offers on a home loan at lower interest rates.
Summary: Your Guide to Finding the Best Home Loan Scheme
Various banks and non-banking financial institutions provide home loans to people and may also accept your application. However, you must do detailed research about the lending institutions and choose the best lender for a home loan based on the following parameters.
- One of the most critical factors to decide about the home loan is to check home loan rates of various lending institutions. Lower home loan rates mean you can comfortably repay the loan amount every month without any delay.
- The home loan fees and expenses include processing fee, prepayment costs, down payment, valuation fees, etc. Along with that essential terms and conditions related to home loan sanction, disbursal, or repayment must be appropriately checked before deciding about the lender to avail a home loan.
- Usually, banks take around 10-15 days for processing of a home loan and additionally 3-5 days are taken for disbursal of loan. Home loan borrowers must shortlist the banks which have low turnaround time.
- Financial institutions also provide several home loan services like home loan tax certificates, part-closure services and reduction in the tenure/EMI after partial repayment etc. Thus, you enquire about these services before deciding about the home loan lender.
- Borrowers must also check the specific eligibility criteria to avail a loan. Home loan eligibility parameters include age, income source, employment stability, credit history, LTV, property type etc.
- Checking the credit score is also a crucial factor to avail a home loan. If the borrowers have an excellent credit score, then it indicates that the borrowers can repay the loan on time and vice-versa.
