A Borrower's Checklist For Selecting A Housing Loan In India

A home loan is a secured credit that helps individuals purchase properties. Here, borrowers can keep their properties as collateral and avail funds against them. However, the loan amount sanctioned depends on the property's market value. 

To understand monthly instalments and the total amount payable, applicants can use a home loan interest calculator. Besides, they must keep the following in mind while selecting a housing loan.  

Checklist to be followed while selecting a home loan 

One must follow the below-mentioned list while applying for a home loan: 

1. Affordable interest rate 

Applicants must choose a lender that levies an affordable interest rate. If one does not get a low-interest rate, repayment can become a burden. Hence, it is best to get a home loan aligned with one's financial standing. 

In this regard, one can use a home loan interest calculator to gain an insight into the monthly instalments that one must pay, based on the applicable interest rate. However, if one has a strong credit history and meets the financial institution's home loan eligibility criteria, he/she can negotiate and bring down the interest rate.  

2. Keep the documents handy 

Applicants must keep the following documents handy before applying for a home loan, such as: 

• KYC documents 

• Salary slips of the last three months 

• Bank statements of the previous six months 

• Address proof 

• IT Returns for salaried individuals 

3. Credit score 

The credit score impacts the rate of interest levied. Hence, applicants are recommended to maintain a credit score of 750 or above while availing a home loan. For instance, lenders tend to charge a higher interest rate to applicants who have a low credit score. On the other hand, those with a higher credit score can avail low-interest rates. 

4. Associated charges 

Applicants must check thoroughly whether there are any additional charges to be paid. In some cases, many lenders may ask borrowers to pay extra fees as they charge a low-interest rate. 

Hence, applicants must keep these pointers in mind. After that, they can choose a lender according to their requirements.