All you need to know about Home Loans in India
It is every man's dream to have a home of their own. It is often related to one's financial stability. While the idea of owning a home seems to be a good one, there are many things around it that are not so easy to have. One of the most important such factor is arranging the funds for building/purchasing new home. In such situations, Home loans are the best options to help you build your dream home.
Let us understand how to avail best Home Loan in India
1. Bank or Private Housing Finance company?
One can take a housing loan from Banks (Public and Private Sector) or Private Housing Finance Companies. While Private Housing Finance companies can be flexible regarding the eligibility criteria, the interest rate offered by them is usually higher than the interest rates offered by banks.
This also means it can take longer for Private Housing Finance companies to pass the RBI’s rate cuts to the borrowers. This can be more expensive for the borrowers. When it comes to processing fees and other penalties as well, Private Housing Finance companies are on the costlier side compared to the banks.
2. Fixed Interest Rate or Floating Interest Rate
Whether you take a Home Loan from a bank or a Private Housing Company, the borrower has to choose between fixed and floating rates for the loan. In the case of fixed-rate loans, the interest rate is same and remains unchanged throughout the loan tenure.In case of floating rate, the interest rate is dynamic, depends on the market conditions and can affect the EMI amount.
Usually borrowers take Home Loans with floating interest rates in a falling rate regime. But, if you want more certainty about the monthly expenses and budgeting is a matter of concern for you, you can opt for a fixed-rate loan.
3. Eligibility Criteria
Before applying for a Home Loan, one should also closely analyze the eligibility criteria of the lender. While the requirements vary between lenders, they mostly revolve around the borrower's monthly income, credit score, age and existing liabilities.
Go for a loan provider whose eligibility criteria you can fulfil comfortably. After applying for the loan, if the lender finds that you do not meet their eligibility requirements, your loan application will mostly be rejected.
4. Additional Facilities
As housing loans are generally taken for 15-25 years, the borrower will have a long-term relationship with the Home Loan provider. Thus, it is also important to consider the additional facilities or features offered by the loan provider. For instance, a few banks offer a step-up loan facility, which boosts the loan eligibility of the borrower.
Customer support is another vital consideration before selecting a lender. EMI payment flexibility, loan approval duration and documentation are some other factors that deserve your attention.
Choosing the Best Home Loan Provider
Top banks in India are known to offer Home Loans at attractive interest rates while also allowing borrowers to choose between a floating and fixed interest rate. With features like digital loan sanction, PMAY subsidy and world-class support, they ensure that the entire experience of taking and repaying the loan is highly convenient and simple.
Compare a few top banks, based on the points listed above, to make the right decision and fulfil your dream of being a homeowner at the earliest.