8 Tips for Getting the Best Home Loan Experience

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Since a home loan is a long-term financial commitment, finding an affordable and suitable one is essential. With RBI’s announcement of keeping the repo rate unchanged, many lending institutions have significantly reduced their lending rates. This led a majority of prospective borrowers to apply for housing credit and make their dream successful.

There are various lenders in India providing home loans at different rates. However, one must settle for one offering competitive interest rates and flexible terms. If borrowers avail Bajaj Housing Finance Home Loan, he/she can be assured of such benefits.

8 tips for obtaining the best home loan 

For intending borrowers, the real-estate segment seems favourable to enjoy the available deals and different government-backed schemes associated with home loans. From the interest subsidy schemes to home loan discounts, this is the ideal time for first-time home buyers to avail of housing credits at affordable rates.

If you have identified your property and seeking substantial funds to purchase it, check out the tips below. These will not only ensure market-best interest rates but also provide the best borrowing experience:

Tip 1- Save for substantial down payment

Before availing any credit, it is crucial to chalk out finances properly to eliminate repayment hassle. Borrowers can make a monthly budget and start saving every month accordingly. One can use the saved money as a down payment. By making a substantial down payment, individuals will require a lower principal amount, and consequently interest component will be lower.

Tip 2- Compare and choose lenders

When seeking home loans online, borrowers will find lenders offering varied loan terms and interest rates. Among these, borrowers will have the flexibility to tally the features and benefits of multiple options extended by reputed financiers before making an informed decision. 

Apart from considering interest rates, individuals must consider factors like eligibility, documentation, associated fees etc. However, one can choose to avail a home loan from Bajaj Housing Finance Limited and explore attractive loan features.

Tip 3- Track interest rates

The applicable interest rates for a home loan can be of two types- fixed and floating. In the case of fixed interest rates, the rates remain the same irrespective of the market condition, while floating rates increase or decrease depending on the market fluctuations. Therefore, borrowers must choose interest rates carefully depending on their repayment capacity.

However, one can ensure competitive interest rates by opting for a home loan balance transfer facility. In this option, if borrowers find that they are servicing higher EMIs and interest components against their present loan, they can choose to shift the outstanding principal amount to some other lender offering affordable interest rates and flexible loan terms.

Tip 4- Improve credit score

An individual’s CIBIL score evaluates his/her creditworthiness and reliability as a borrower. Usually, lenders prefer a score above 750 as a decent one to provide a considerable loan amount and better deals. Apart from knowing what is CIBIL score, individuals must know how to improve it to ensure obtaining attractive loan offers and interest rates.

Tip 5- Check eligibility parameters

Applying for any credit without knowing the eligibility parameters can lead to loan rejection. By meeting the eligibility requirements successfully, one can proceed to the next step. Although these parameters vary across lenders, some of the basic parameters include- age, employment type, property’s age etc.

Tip 6- Choose tenor carefully

Choosing an ideal tenor determines the payable interest against the loan. Opting for a longer tenor will allow borrowers to reduce EMIs but increase interest components. However, a shorter tenor will increase EMIs but reduce the payable interest. In such cases, borrowers can conveniently use a home loan EMI calculator to adjust the home loan tenor and display the payable amount.

Tip 7- Make a prepayment plan

When servicing a home loan, one must prepare a prepayment plan as early as possible. For instance, if a borrower acquires a loan for 15-20 years, the payable interest becomes a substantial amount of the loan. Therefore, it is better to save some portion of money every month and prepay when possible. Prepaying a considerable amount in the initial years will be effective for the borrowers. In this regard, borrowers can use a home loan part-prepayment calculator to understand how much they can save on the overall loan amount.

Tip 8- Keep documents ready

Apart from meeting eligibility parameters, individuals need to furnish necessary documents to ensure a hassle-free loan approval. Though the documentation varies from one lender, some remain the same. The common ones include-

  • KYC and address proof
  • Income proof
  • Bank account statement
  • Profit and loss statement
  • Business vintage proof etc.

Besides, eligible borrowers can also benefit from pre-approved offers extended by reputed financial institutions. These offers are available on a wide range of secured and unsecured financial products and accelerate the loaning procedure. Therefore, customers can check their pre-approved offers by mentioning their essential credentials.

Individuals willing to avail a home loan from Bajaj Housing Finance Limited must consider these tips to guarantee the best loan terms and hassle-free repayment.

Aditya Mishra