The most significant expense is purchasing a property that becomes a residence. After years of searching, people find their dream home in their favorite location with all desired facilities. Buying such homes can be daunting in case of a shortage of funds. More importantly, the risk of not finding such a home looms large, making the offer hard to turn down. Taking a home loan helps by making things a bit easy.
However, first-time loan borrowers often need help to make the final decision on availing of a home loan. They often feel intimidated by factors like credit scores, interest rates, processing fees, repayment terms, etc. Whether to self-occupy or for investment purposes, the Indian financial industry offers different funding options that are both beneficial and lucrative.
Despite choosing the best property to purchase with a loan, the borrower needs to research and consider a few things before proceeding.
Here are the essential points to consider before proceeding with the Home Loan application online option:
Credit Score: Aspiring borrowers must ensure that they have a good credit score of 700 or above because it is the first thing most lenders of housing loans check for before approving a loan application. Maintaining a decent credit score is easy for those paying off EMIs on their existing loans and credit card bills timely.
However, those with outstanding balances must clear before applying for a new loan. An individual’s credit length, portfolio diversity, DTI ratio, credit utilisation ratio, and other factors also affect the credit rating. So, handle credit responsibly to maintain a high credit score and improve loan eligibility.
Selecting the Loan Company: Detailed research on all the lenders offering home loans is very important, and one must weigh each option carefully before making a final decision. Factors like the Home Loan interest rate, EMIs, down payment, additional repayment terms, etc., are essential to ensure a smooth deal. Compare the offers made by non-banking financial institutions (NBFCs) and other lenders based on their interest rates, repayment terms, LTV ratio, customer service, loan amount, and factors that help make an informed decision regarding the loan provider.
Eligibility: Although most lenders have specific eligibility criteria for Home Loan borrowers, other clauses may differ. Therefore, never take easy eligibility criteria for granted. The eligibility conditions laid down by most NBFCs include the applicant’s age, profession, income, credit rating, financial commitment, LTV, and property valuation. Check for all the points mentioned in the eligibility criteria of a particular NBFC before applying for a home loan to avoid unnecessary glitches.
Additional Charges: Every lender charges a different fee to process a Home Loan application. These include processing charges, documentation charges, application fees, etc. Since the charges differ from lender to lender, it is important to compare thoroughly to avail the best offer.
Monthly Instalments: EMI is the amount borrowers pay each month during the loan term. Each instalment payment reduces the loan burden and brings the borrower closer to complete repayment. Based on the loan amount, repayment tenure, and Home Loan rate of interest, borrowers must ensure everything conveniently fits into their monthly budget for timely repayment. Use a Home Loan EMI calculator to make an informed decision and get a budget-friendly EMI to pay.
Repayment Terms: The repayment term is the time taken to pay off the loan. When an individual borrows a Home Loan, they get a fixed period during which they must repay the loan and interest in Equated Monthly Instalments. A longer loan term increases the number of EMIs in the loan term, reducing the EMI amount but increasing the total interest cost. Therefore, the trick is to opt for the shortest possible tenure for optimum money-saving.
Prepayment Norms: Home Loans have extended repayment terms that keep the borrowers indebted for years, sometimes decades. The borrower would want to use each financial benefit to pay off the loan as soon as possible. However, repaying the loan sooner means a loss of interest for the loan company, which charges a prepayment fee for the facility. So, clarify these charges before Home Loan apply online to make an informed decision regarding loan prepayment.
Documentation: Home Loan applicants must furnish several necessary documents to prove their loan eligibility and verify their credentials. These include identity, residence, income proof, and some property-related documents. PAN Cards, Aadhaar cards, driving licenses, utility bills, KYC documents, and others are essential to verify credentials. Applicants must provide their bank statements, salary slips, form 16, CA audited financials, ITR, etc., to prove their income. Check the lender’s documentation requirements and keep them in order beforehand to streamline and accelerate the loan process.
Down Payment: A home loan is generally 70% of a property’s overall market value. The borrower must pay the remaining amount as a down payment. Applicants with additional money must try to make a bigger down payment. Doing that will reduce the loan requirement and eventually reduce the interest cost.
These critical points must be understood well by the individual thinking of Home Loan apply online to invest in property. When a stunning house is waiting to be sold, taking a loan will immerse the buyer into a world of bliss. So, get in touch with a reputable loan finance company and make your dream a reality!