Consider These Top 10 Tips While Getting A Home Loan - Loan Trivia


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Thursday 23 June 2022

Consider These Top 10 Tips While Getting A Home Loan

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Purchasing a home loan is a crucial decision as it is a long-term financial commitment for an individual. To ensure a hassle-free repayment, it is essential to have prior knowledge about the pros and cons and the formalities associated with it.

Read on to learn about some of the effective tips when getting a home loan:

10 tips to follow when getting a home loan

Availing of a home loan without knowing its aspects might lead to the rejection of an application. Follow these tips below to avoid such instances:

  1. Make a substantial down payment

Make a substantial down payment if you have considerable funds in hand to substantially save on the interest payment in the long run.

  1. Check interest rates

The home loan interest rates rely on various factors and vary across lenders. Therefore, it is ideal to research and compare the current home loan interest rate prevailing in the market and choose the one that suits their financial standings.

  1. Select home loan tenor carefully

Before availing of a housing loan, one must carefully consider the length of the repayment tenor as the EMIs will depend on it.

  1. Check tax benefit

Under Section 80C and 24B of the IT Act, individuals can claim tax benefits on home loan for expenses on both principal and interest amount.

  1. Check EMIs

Before availing of a home loan in India, individuals can use a home loan EMI calculator to determine the monthly obligations beforehand and make the down payment accordingly.

  1. Maintain credit score

To avail of a substantial loan amount, better rates and loan terms, individuals must maintain a credit score of 750 and above.

  1. Processing fees

Different associated charges and fees can increase the overall borrowing cost. Therefore, negotiate with your lender for the lowest processing charges.

  1. Arrange documents 

To ensure a hassle-free application process, make sure to arrange all the home loan documents beforehand.

  1. Prepayment charges

As per RBI guidelines, borrowers are not required to pay any prepayment charges for home loans at floating rates. So, one can make part payments at their convenience.

  1. Learn foreclosure norms

Usually, lenders levy a nominal charge for foreclosing loans. Therefore, before applying for the credit, make sure to discuss about the charges.

Apart from these, borrowers can also choose a home loan balance transfer facility by transferring the outstanding amount to another lender offering better interest rates.

Must Read: What Are Home Loan Eligibility Criteria, And How We Can Increase It?

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