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The Ultimate Guide to Taking Out A Home Loan

By Bhavesh Mehta - Jan 16,2020
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The Ultimate Guide to Taking Out A Home Loan

Your property is an asset that can truly help you reap numerous financial benefits. Be it a property for the purpose of living in or for an investment, the banking sector provides many loan opportunities for hopeful property owners, that are lucrative and beneficial.

Home loans serve as an important form of financial assistance for immediate help in the form of cash instead of liquidating savings. The option of choosing the loan tenure and repaying in easy installments as per the loan interest rates and convenience, lenders help make your dream of purchasing a home a reality. On Finserv MARKETS, you can even factor all these three points into a Home Loan EMI calculator and plan your entire home loan out.

Before applying for a home loan, it is important to go through some important suggestions that could help ease your loan application process and simplify loan repayment.

1. Research Loan Options

With the enormous amount of information available on the internet and its easy accessibility, it is important to do extensive research on the available options for home loan plans in the market. Important factors like loan interest rates, down payment, EMIs, and tenure form the basis of research before you apply for a home loan.

A detailed research on these factors enables one to choose from the available home loan options to find the home loan plan with the most benefits and attractive interest rates. Home loan amounts are also usually larger than other loans, so make sure you explore all the details and uncover every nitty-gritty that comes along before, during, and after the home loan application.

2. Aim at Affordability

From the plethora of available options in home loan plans to choose from, affordability is a large contributing factor that you need to consider before applying. The affordability of monthly home loan EMIs which are fixed, needs to fit comfortably within your cost of living.

Keep in mind the overhead expenses beyond the home loan EMIs you choose to pay each month and maintain a steady income outflow to meet any unforeseen emergency. So, while it is important to have the option of choosing a home of your choice, in the location of your choice, being able to afford the home loan is equally important.

3. Choose EMIs which suit your need

The home loan EMIs to be chosen depends entirely on the borrower. When researching for the perfect home loan, one can even figure out the desired EMI, its frequency and the loan tenure. On Finserv MARKETS, you can avail a variety of flexible home loans where the EMIs can be adjusted as per loan amount and tenure.

In general, if you want to be de-stressed from the burden of home loan EMIs on a monthly basis, it is suggested to pay a higher percentage of down payment upfront. Keep in mind that as a general formula, it is suggested that monthly EMIs should not exceed 45% of your monthly income.

If this seems confusing, you can always use the Home Loan EMI calculator on Finserv MARKETS and plan your home loan EMIs accordingly for the amount and tenure of your choice.

4. Loan tenure opted for repayment

The date when the home loan amount gets disbursed is considered as the first date of loan tenure and the loan repayment period starts from the same day. These details are specifically mentioned, signed and sealed in the home loan agreement document.

Opting for a longer home loan repayment tenure will result in a higher interest payment, and it applies vice versa. So, you may end up paying double or triple of the loan amount by opting for a high loan repayment tenure.

Therefore, it is advisable to have a short repayment tenure, especially when you have a strict increasing income and a fair sense of meeting the monthly budgets and home loan EMI costs. This then results in a lower home loan interest rate and encourages faster payment of your home loans as well.

5. Maintain a good CIBIL Score

As it forms an essential requirement for any kind of home loans being taken from any lender, it would be wise to maintain a healthy CIBIL score at all times. The CIBIL score or any Bureau score in India takes an individual’s monthly credit card bill payment, any other loan EMIs and such into consideration while generating a CIBIL score for an individual.

It is noted in the market that with a CIBIL score more than 750, you may ask for attractive and customized offers from the lender. So, when you apply for a home loan, you may even avail benefits such as low rate of interest or increased loan amount or waiver of processing fee, free insurance and so on.

6. Foreclosure Charges

Before you finalize the home loan plan of your choice, it is important to note the charges being levied for part prepayment and foreclosure of loan agreement. This can be tricky, as borrowers may not realize or be made aware of these charges beforehand.

However, on a trusted platform like Finserv MARKETS, not only are you immediately made aware of the part prepayment and foreclosure charges but are also never charged any hidden costs. When applying for a home loan on the platform, all you will need are your details and documents for speedy approval. You can avail a home loan amount of up to 3.5 Crore with flexible repayment tenures of up to 300 months.

7. Spend Cautiously

Monthly expenditure is an important factor that immediately follows the affordability point. Once you have a home loan to repay, it is preferable and advisable to follow a strict budget to meet your equated monthly home loan instalments.

In order to maintain credibility, payment of your loan EMIs on a regular basis is important in order to avoid an overdue or an increased interest rate. Since spiraling down with respect to the non-repayment of a home loan is common, avoid it by channeling your resources towards regular and timely repayment of EMIs to gain full ownership of your home. Such a controlled outflow of income would enable you to pay off the home loan as soon as possible.

Conclusion:

Therefore, it is incredibly important to be aware of all the factors you need to consider before availing a home loan. Since we choose our homes with so much care and caution, a home loan might just be the most important decision of your life. So, make sure you find a trusted and transparent platform like Finserv MARKETS that is not only simple, straightforward and upfront about its home loan policies but also incredibly convenient to apply and avail.

You can prepare for upcoming EMIs even before you apply for a home loan, by using the Home Loan EMI calculator on Finserv MARKETS. By factoring in the loan tenure, amount and their affordable home loan interest rates, you will never have to worry about paying your home loan EMIs in the future. In addition to that, you can also download the Finserv MARKETS App, which offers you the safe, secure and convenient UPI platform to facilitate seamless, hassle-free transactions, right at your fingertips. You can pay your loan EMIs and part-payments with utmost ease and convenience, track your loan account and manage your finances, anywhere, anytime. With the Finserv MARKETS App, you can avail approvals of your loans within 3 minutes and have money deposited into your bank account within 24 hours.

Finserv MARKETS, a subsidiary of Bajaj Finserv, is a one-stop digital marketplace that has been created for consumers on the go. It offers 500+ financial and lifestyle products, all at one place. At Finserv MARKETS, we understand that every individual is different. And that’s why we have invested in creating a proposition – Offers You Value. A value proposition that ensures you get offers which are tailor-made for you. We also offer an amazing product range and unique set of online offers across Loans, Insurance, Investment, Payments and an exclusive EMI store. Be it in helping you achieve your financial life goals or offering you the latest gadgets, we strive to offer what you are looking for. From simple and fast loan application processes to seamless and hassle-free claim-settlements, from no-cost EMIs to 4 hours of product delivery, we work towards fulfilling all your personal and financial needs. What’s more! Now enjoy the same benefits in just one click with our Finserv MARKETS App

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Bajaj Finserv Direct Limited ("BFDL"), erstwhile Bajaj Financial Holdings Limited is a registered corporate agent of Bajaj Allianz Life Insurance Company Limited and Bajaj Allianz General Insurance Company Limited under the IRDAI composite registration number CA0551 valid till 10-Apr-2021. BFDL also renders services to Bajaj Finance Limited (‘BFL’) and Bajaj Housing Finance Limited (‘BHFL’) (referred hereinafter as ‘Lending Partner’) in sourcing of customers, providing preliminary credit support activities, fulfilment services and post-acquisition customer services related to lending business. Registered Office: Bajaj Auto Limited Complex, Mumbai – Pune Road, Akurdi, Pune – 411 035 CIN: U65923PN2014PLC150522