Want to take a home loan in India? You should know that buying a home is no more a rigorous and tough exercise like before. With a general increase in disposable income and easier availability of home loans from financial institutions, buying one’s first home is easier than ever before. In the current scenario, home loan interest rates are also falling rapidly and this makes it more convenient for prospective homeowners. However, selecting the best home loan is the major aspect you have to keep in mind.
There are various loan products offered by different financial institutions and banks and these come with varying interest rates. However, you should not just look at the interest rates being offered. There are several other aspects that you should also keep an eye on. Here are the top aspects that you should also keep in mind while seeking a home loan:
Daily Reducing Balance– Try and go for a lender that offers daily reducing balance in place of the monthly system. The daily method is more affordable than the monthly and annual methods and this will help you save a lot of money in the future.
Reviews– Before choosing a suitable home loan, always check out various customer reviews for different financial institutions and banks. In case you do not find any reviews that are helpful, you should endeavor to get suitable opinions and feedback from your near and dear ones. Always try and find people who may have taken home loans from various banks and take their personal opinions. Try and take an objective view on the same. This method will help you choose the best bank for your home loan.
Floating/Fixed Interest Rates– In the current scenario, you will always benefit more if you take a floating rate home loan. The floating interest means that the rates will change with market fluctuations but in the current situation where rates are falling, you may benefit more from the same. The fixed interest rate, however, stays fixed as per your agreement and does not change with any market fluctuations or reductions/increases in rates in the country. This is a better option for those who do not want ever changing monthly repayment amounts and desire more stability without the excitement of possible rate dips or worrying increases in the future.
Your CIBIL Score– A good CIBIL score is one, which is above 750. This helps in easier approval of home loans from any bank or financial institution along with lower hassles overall when it comes to verifications and establishment of your credit history and record. The CIBIL score shows your creditworthiness and this is used as a reference point by banks for processing home loan applications. You should get your CIBIL score absolutely right before applying for a home loan.
Foreclosure Norms– You have to read the terms and conditions carefully and understand aspects like foreclosure. Check for lenders who do not impose foreclosure/pre-payment penalties after a certain period of time (initial lock-in period)..