What To Consider Before Applying For A Home Loan?

A home loan is a long-term financial commitment, which can prove counterproductive if not planned well. Hence, before borrowers apply for a home loan, they must consider certain factors to make the borrowing rewarding.

Things to consider while applying for a home loan

Here are the factors that borrowers consider while applying for a home loan:

• Home loan interest rate

The first and foremost thing that borrowers must do before applying for a home loan is to compare lenders and settle for one extending nominal home loan interest rate. A competitive interest rate makes loan expenditure affordable and reduces the EMI liability. 

• Eligibility criteria

Borrowers must check the eligibility criteria and abide by them before proceeding with the home loan application. The amount of loan principal that borrowers will be eligible to borrow depends on borrower’s income, age, employment history etc. 

• Documents required

It is equally important for borrowers to keep the necessary documents to expedite the home loan application process. Borrowers must submit KYC papers, income proof, Address proof, bank statements, property-related documents etc., to receive quick loan approval. 

• CIBIL score

Lenders scrutinise credit score as it shows borrowers' financial behaviour, repayment history and creditworthiness. The ideal CIBIL score for home loan is 750 and above, which borrowers must maintain to avail considerable loan amount at an affordable interest rate. 

• Home loan tenor

A home loan comes with a flexible loan tenor. Hence, borrowers must be mindful regarding choosing the right loan tenor. A long repayment tenor reduces EMI burden, whereas a shorter loan tenor lowers the cost of borrowing. 

For further convenience, borrowers can use a home loan calculator to decide on the loan tenor.

To sum up, a home loan is a massive financial decision that demands due planning and diligence. Hence, borrowers must apply for a home loan after weighing the above mentioned factors. 

Also Read: Benefits Of A Home Loan Emi Calculator- Here's What You Need To Know