A perfect home is not easy to find. Homeowners must consider various factors so that their dream home is built right. As we want our home to be perfect, choosing the best home loans available in the market is necessary. Depending on your home loan requirements, opt for the loan that best suits your budget and plan. The Government of India provides subsidies on home loans through an initiative called Pradhan Mantri Awas Yojana. Before applying for a home loan, check your eligibility for Pradhan Mantri Awas Yojana so that you can benefit from the government initiative. Follow the tips mentioned below for the best home loan plan for you.
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– Compare different loan vendors
There are many home loan vendors in the market, from banks to financial institutions. With a good credit score, taking loans from reputed vendors is easier. A loan from a trustworthy vendor is important because of the long-term commitment to repay home loans.
– Check your loan eligibility
The eligibility criteria are different for different banks. Personal information like age, annual income, and credit score of the customers are collected. With the data collected, the loan vendors filter out customers who are not eligible for the loan. A person’s financial status may also affect eligibility. Several banks have online loan eligibility calculators that allow customers to estimate the loan amount.
– Rate of interest
The first and most important factor most people are familiar with is the rate of interest charged. Lower the interest rate, and the overall loan cost reduces. A lower interest rate allows one to borrow a comparatively higher loan amount. However, a customer must check for any hidden costs on loan.
– Flexibility in loan tenure
Usually, the repayment tenure of home loans is long. Not all loan vendors provide flexibility for their customers to choose a long repayment tenure. Understanding how the loan period affects the loan amount charged gives an idea about optimal loan tenure. By opting for a longer loan tenure, interest charges will decrease. Shorter loan tenure results in higher monthly repayments burdensome on the loan payers.
– Minimal documentation
While taking out any loan, documentation is crucial for both vendor and customer. For the trust and security of both parties, identity proofs, address proof, and collateral documentation can be required.
– Type of interest rate
Many people are unaware of the types of interest levied on home loans. Depending on the loan borrowed and the interest, floating or fixed rate must have opted. If the interest rate is low, a fixed rate is the go-to option.
– Processing fees
A loan vendor charges a processing fee to process a home loan application. This fee is levied for any expense incurred by the vendor while assessing the customer profile or the property. Depending on the vendor, the processing charge may be between 0.25% to 2%. By inquiry of the same, you can understand the terms and conditions of the vendor beforehand.
– Insurance cover on home loan
An unexpected loss of property is more common than you expect. Taking an insurance policy against your home can save you from those damages. Often, banks suggest customers take home loan insurance with the borrower’s interest. Even though a small premium is charged, it will be proven beneficial in the long term.
– Quick approval and disbursal
The time taken for the loan approval can be longer than expected. Some vendors are not an optimal choice if the requirement of funds is urgent. Go through the vendor’s website thoroughly, so there are no last-minute complications.
– Digital Access
In the digital era, no one wants to visit a bank physically to make a transaction. Many loan vendors in the market provide loans online. You can complete repayment of loans and other procedures from the comfort of your home. Digital access allows customers to keep track of the loan without any hassle.
It is easy to borrow home loans in India. With the growing population and economic development, home loan demands have risen. Consider the above points to find a suitable loan plan for your home. Go through the loan policy thoroughly and check your eligibility for Pradhan Mantri Awas Yojana before going forward with a home loan.