A borrower’s checklist for selecting a housing loan in India

A home loan is a long-term commitment, and hence, borrowers need to plan their finances carefully. This will help customers meet their daily financial obligation without curtailing the budget. 

In this regard, a home loan interest rate calculator can be helpful. With this, applicants can determine the total interest payable, monthly instalments, and total amount to be paid. This helps one manage his/her finances properly. 

However, borrowers must keep the following pointers in mind while applying for a home loan in India: 

Housing loan checklist

One must keep the below-mentioned pointers in mind before applying for a home loan: 

1. Compare the different interest rates 

One must compare the different interest rates levied by lenders before availing a home loan. This is a decisive factor as changes in the interest rate can affect repayments. Furthermore, borrowers should check the type of interest rate they are applying for. 

2. CIBIL score 

The CIBIL score determines the interest rate and home loan eligibility. Hence, applicants must maintain a high credit score of 750 or above. One must remember that late payments, default in payments and check bounces can negatively impact the credit score. 

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3. Documents required

Applicants must remember to keep the following documents handy while applying for a home loan in India: 

• PAN or Aadhaar card 

• Employee ID cards 

• Salary slips of the previous three months 

• IT Returns for Salaried individuals 

• Bank account statements of the last six months 

• Property documents, such as registration certificate 

4. Eligibility criteria 

Applicants must first and foremost check whether they meet the home loan eligibility criteria set by the financial institution. This includes the applicant’s age, employment status, source of income etc. 

5. Additional charges 

Applicants must thoroughly check whether the financial institution levies any additional charge against a low-interest rate. Hence, it is best to read the lender’s terms and conditions beforehand. However, one should also check if the lender imposes prepayment charges. 

The above section highlights the things an applicant must check before opting for a home loan. One should use a home loan interest calculator to compute monthly payable, besides keeping the above factors in mind. One can choose a financial institution offering the lowest interest rates and the best servicing terms.