Important Points To Consider Before Taking A Home Loan In India

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home loan in india

A house is an asset type that can reap various financial rewards over the long term. Regardless of whether you want to buy a property solely for investment purposes, or are looking to buy a new abode, there are all kinds of housing loan options available in the market today, which can make the entire deal both beneficial and lucrative for you.

Furthermore, taking a housing loan can prove to be financially very helpful if you’re short of funds, or are not interested in liquidating your savings. With flexible repayment tenure and easy monthly instalments, banks and NBFCs are helping people everywhere realize their home dreams. However, before you go ahead and apply for a housing loan at the first lender you come across on the internet, there are some important points you must keep in mind. Let’s tell you about them below:

Look for affordability

Although there might be many housing loan options available in the market, affordability is the most important factor you must consider before going for any of them. You should be confident of making the monthly EMI payments, without compromising on your existing lifestyle. Make a list of all the important expenses you will need to meet each month, other than the EMIs, and also ensure that you will be able to set aside some money each month, to meet any unforeseen expenditures.

Repayment tenure

This is the time taken by you to repay the entire principal amount of the loan along with the applicable interest rate. Both repayment tenure and EMIs are inversely related to each other. It means that the longer is the tenure, the lower will be the EMIs, and vice versa. However, please keep in mind that a longer repayment tenure also increases the interest component of your loan, sometimes making you pay double of the actual loan amount. If you are young and have a stable job, you should opt for a short repayment tenure and higher EMIs. This way you will get a lower interest rate and be out of debt fairly quickly.

CIBIL score

Credit score plays a very critical role in approval of any kind of loan application, whether with a bank or an NBFC. Being regular in your loan repayments and credit card bill payments can help you significantly in improving your credit score. Maintain a score of 750 or higher, and you can expect a very good home loan interest rate. Not just that, the lender will process your housing loan application quickly, and disburse the amount in no time.

Additional charges

Lending establishments levy all kinds of fees and charges such as processing, administrative and/or service charges on borrowers, during the housing loan application and thereafter. Please go through all such charges and understand if they are only one time, or will be collected on a regular basis. When applying for a housing loan you should take all such expenses into consideration along with the EMIs.

Foreclosure norms

You should be well aware of the updated RBI norms regarding housing loan foreclosures. Repaying the outstanding loan amount, ahead of time, by foreclosing your loan can save you from hefty added expenses. The sooner you clear your debt, the better it will be for your credit score too.

Research multiple options

Today there are portals like GoSahi.com that have made it very easy to compare best loan offers from multiple lenders, on one single platform. While carrying out such comparisons, you must pay special attention to factors like EMI, down payment and repayment tenure. Such comparative analysis can prove to be very critical in availing the best housing loan offer, at the optimum home loan interest rate.

Also read: Get a Home Mortgage or Home Loan to Buy a House

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