Skip to main content

Things To Know Before Applying For A Home Loan In 2021

 

What is a Home Loan?

People who want to buytheir own homes choose to opt for a home loan. But getting a home loan is not as easy as it sounds. Most people do not know the requirements and formalities for availing of a home loan. Those who want to get a home loan for the first time should know a lot of things like rate of interest, credit score, charges, processing fees, documentation, and other things.

What are the things to consider before availing a home loan?

Below are some of the most important things to consider before getting a home loan:

Credit score

Anyone who wants to get a home loan should have a good credit score. So, you need to have a CIBIL score of over 750 to get a home loan and get a better interest rate on your loan.

Rate of Interest

Anyone looking to get a home loan should look for low-interest rate opportunities from the lender.

Tenure

Your EMI is based on your loan tenure. Banks often give loans with shorter payment periods. Short-term tenure benefits you as it reduces the interest rate on your EMI.

Processing Fees

It is a fee that each homeowner should pay the lender once the loan is approved. Banks or financial institutions charge interest fees up to 1% of their loans.

Equated Monthly Installments (EMI)

EMI is a payment that a borrower needs to repay their loan in the form of monthly installments. How much you pay each month depends on you. It also depends upon the down payments which you pay at the time of purchasing your home. The more the down payments the lesser will be your EMIs conversion.

Documentation

Before getting a home loan, you should always read the terms and conditions of your bank or financial institution before applying for a home loan. You should know about the various charges, fees, and penalties mentioned in your home loan. Also, try to arrange all the necessary documents required to apply for the loan.

Down payment

When you get any home loan, you will have to pay 10% and 15% of the loan amount as the down payment. The rest of the loan will change to your EMI, which you can pay monthly. If you have enough money, you can increase the down payment because it will help you save on interest in the future.

Additional Charges

Except for the EMI of your home loan, the bank and financial institution may incur additional costs at the time of booking. Make sure you and your bank or financial institution discuss this charge with you in advance.

Penalty of prepayment

Based on the recent RBI guidelines, no bank or financial institution will charge a penalty of prepayment before the tenure of the loan. With no penalties and compensation, you can repay any payment whenever you have a large amount of money available when you receive your home loan.

Foreclosure

It means repaying the home loan before your loan tenure ends. The sooner you pay your loan, the lower the interest rate you pay. Banks do not charge a penalty of foreclosure before the term expires.

Where can you apply for a home loan?

There are several banks, NBFCs and financial institutions allow you to get a home loan. You can also apply for a home loan from ShriramCity. The loan process at ShriramCity is very fast and it offers a home loan at a lower interest rate with minimal documentation depending upon the tenure you want.

Comments

Post a Comment

Popular posts from this blog

A Beginner’s Guide to Business insurance

All businesses look for profit maximization and risk minimization and an insurance does the latter for you. It reduces your risk of paying for unexpected damages and offers risk management services to safeguard your company or business from threats, perils, tragedies, etc. An insured business can - Be safeguarded from potential risks - provide benefits to employees - Focus on business goals - Reduce unwanted stress. Business insurance provides coverage to your company against any damage or loss through theft, sickness, accidents, injuries or deaths. YOU NEED BUSINESS INSURANCE TO • To manage risk and safeguard from natural hazards • To adhere to the law • Protect your employees with insurance • To ensure lawsuit and settlement coverage • To share only risk, no profit. • To secure copyright • Gain new and retain old clients with credibility • To retain your employees • It is a pre-requisite in most business contracts • Its not one size fits all • Insurance offers BOP ( Business Opport
Post a Comment
Read more

All You Want to Know About Two Wheeler Loan Finance

With increasing demand in semi rural and urban places, 2 wheeler market is a high growth industry.  This implies there is ample chance for two wheeler finance businesses.  There has been limited awareness about funding for a two wheeler from the olden times but with the rising penetration of financial institutions throughout the nation, it is now possible to get 2 wheeler finance conveniently and quickly. Obtaining 2 wheeler loan finance is now simple. The qualification standards, documentation necessity and the procedure has been cited below: Eligibility: Individuals over Age 18. Salaried people who were employed for at least a year. Business owners that are conducting a company for more than a year. Documentation : Identity Proof Address Proof Income Proof Valid KYC documents Passport size photographs Process: So as to apply for two wheeler loan finance , the applicant should scout the market for a variety of Banks and financial institutions that offer the loan. Depending on the stip
Post a Comment
Read more

Important Facts About Business Loan

To begin with, business loans may barely be reversed from the lender or financial institution that delivers this debt. This is principal because of the simple truth that if applying this sort of financing, which can be used almost immediately after obtaining the funds. In this way, though you may pay a bigger amount of focus on a business loan, you might be able to gain by obtaining the whole debt funding you need in 1 shot. But, there might be a range of advantages of getting all the financing that you need in 1 lump sum rather than drawing a line of credit. As a result of recent changes in laws in addition to the ways that banks operate a business, you can anticipate a significant amount of being it small business loans or big business loan or business loans are not given directly to you. To the contrary, it is very likely to publish statements from providers that you are buying goods to be able to fulfil its business plan. The chief reason banks and financial institutions have creat
Post a Comment
Read more