Whether you're looking for realty investments or planning to purchase a new house, a home loan can be a wise choice to help you avoid depleting your savings in this endeavour. Before navigating the world of home loans, there are several factors you need to be aware of to make an informed decision.
You might also like: Home Loan Agreement: Important Clauses That Borrowers Must be Aware of
As a potential homeowner shopping for a home loan, you can choose between a bank and a Non-Banking Financial Company (NBFC), like a Housing Finance Company (NBFC). Both lenders have their set of pros and cons that you should keenly assess before making a decision.
Here are some key distinctions to consider when choosing a home loan:
|Interest Rates||Directly regulated by the RBI||Set their own rates|
|Credit Score||Must be over 650 to accept home loan application||May accept lower scores while charging higher interest rates|
|Terms and Conditions||Follow strict guidelines||More relaxed and flexible|
|Eligibility Criteria||Stricter than NBFCs||Lenient compared to banks|
|Processing Time||Longer processing period||Faster, often within a few days|
Go through these simple points that can help ensure you undergo a smooth and straightforward decision-making process –
Transparency: Know What You're Getting Into
Before applying for a home loan, it's crucial to understand the entire process involved. Any reputable lender provides a transparent breakdown of all the steps involved in the application process. Typically, you have to fill out an application, provide the necessary documents, and await verification. After that you will receive an approval letter for your home loan.
Customer Service: The Power of Good Support
Robust and prompt customer service is important for any borrower. Before taking a loan, you can assess a bank's customer service by asking questions like –
Interest Rate: Finding the Right Balance
While comparing home loan interest rates, remember that the lowest rate does not necessarily mean that it is the best option. Loans with a lower interest rate might be available for a shorter tenure only, or vice versa. Moreover, understand the difference between fixed and floating interest rates. Floating rates can change during the loan tenure, as they are market-linked, while fixed rates remain constant.
Tenure Flexibility: Make Repaying Easier
A home loan's affordability is not only about low-interest rates but also about finding a repayment tenure that aligns with your needs. The right tenure will ensure that your home loan EMIs do not burden your lifestyle.
Hidden Fees and Charges: Skip Surprises
Before signing a home loan contract, make sure you are intimated about any hidden fees in the overall process. Common charges that you should be mindful of include loan processing fees that covers administrative costs and bounce charges that are imposed for defaulting on EMIs.
Repayment Capability: Plan for the Future
Assess how much you can afford to pay back as EMIs in the long term. While calculating, consider your current and future income, additional income sources, and potential external expenses. Remember that either of these could increase over time, affecting your repayment capability.
Explore offers from various financial institutions to before choosing a lender and home loan. This will help you find the best home loan for yourself. On Bajaj Markets, you can check out a wide range of home loans that suit your housing finance needs. Benefit from moderate interest rates, minimal documentation, low processing fees, flexible repayment options, instant approval of your application, and quick disbursal of the funds. With Bajaj Markets, your dream of homeownership can indeed become a reality!