Property investment in India, given the current scenario, is not a distant dream anymore. With the growth of various financial institutions – big and small, loans are easily available to individuals earning a decent income. However, one cannot just avail the loan facility based entirely on their income. There are several factors that come into play before any financial institution sanctions your loan. Individuals opting for home loans should only select the organisation after carefully going through all the rules and regulations. Some important points that one must remember while selecting a lender are:
Reputed lenders are picky when it comes to offering home loans and often reject applicants with a low credit score. So, in order to maintain a healthy credit score and to be eligible for a home loan, one must always maintain a good CIBIL score and make credit card and EMI payments on time. But, with the emergence of small financial institutions, there is still scope for people with a low credit score as these institutes offer loans with minimal documentation and background check but at a higher interest rate.
Location of the Property
Most financial institutions are not present everywhere in the country. So, it is imperative to select a lender who is in the same region as the property you’re investing in. A financial institution itself hesitates to give loans if the applicant and property are in different locations/cities. Ideally, if the property you’re investing in, is in a different city/state, select an organization that has a presence there and also in the place you’re living in. Finserv MARKETS provide home loans in tier I and tier II cities like Mumbai, Delhi, Hyderabad, Bangalore, and other cities.
Loan Repayment Tenure
Every individual opting for a home loan should pre-decide the tenure. Banks and various Non-Banking Financial Companies (NBFCs) give preference to the shorter repayment period. The EMI in this tenure remains high but the burden of a loan gets off your shoulder faster. One can even opt for pre-payment if there is surplus cash, as there is no penalty for partial payment.
Any bank or financial institution would offer the borrower a variety of EMI options but it also depends on the amount of the down payment. The bigger the amount of down payment, the lesser is the outstanding amount for EMI. While calculating the final EMI amount, ensure that it does not exceed 45% of your total income. The EMI Calculator by Finserv MARKETS can help you figure out the exact amount you need to shell out every month towards your home loan.
Nature of the Property
Financial institutions do not hesitate in giving loans for ready-to-move properties as they are risk-free and do not involve many approvals from governing bodies. However, the same institutions become strict if the property is under construction or the property has to be built on the land. In that case, the institute prolongs the process with more background and reference checks.
Documents and Additional Charges
Before availing a home loan, always read the terms and conditions carefully. Read through all the clause, penalties and legalities associated with the loan. Institutions may also charge an additional fee at the time of application, discuss the charges before going ahead with the process. At Finserv MARKETS, we provide 100% transparency with no hidden charges or dubious policies.
The fierce competition in the market compels financial institutes to keep offering attractive interest rates. However, while opting for a lender we should select the one with the lowest interest rates. There are two categories of interest rates – floating and fixed. Under fixed, the rate of interest remains the same but under floating the interest is calculated based on the MCLR and is dynamic in nature which is beneficial when the interest rates drop.
Age is a criterion that financial institutes keep in mind before approving a loan. People within the age bracket of 30-50 years are mostly preferred as they are considered financially stable and have an adequate number of working years left to repay their loans.
Did you know that with Finserv MARKETS, availing a Bajaj Finserv Home Loan is easy, convenient and completely hassle-free? That’s not it! You can avail a host of other features and benefits and realize your dream of owning a house. So why wait? Head over to Finserv MARKETS and apply for a home loan with us, today!
Also, read about prepayment of home loan.
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