When you are house hunting, a home loan is a great financial assistance because you don’t need to spend your savings or burn a hole in your pocket. You can pay monthly EMIs for a selected tenure and be the owner of the home. There are many reasons to choose a loan over cash down payment. Before you settle for the former, here are a few things to consider when applying for a home loan.
Shop around
You will be paying a significant amount as interest for several years, therefore, it makes sense to do a little window shopping. Check out the websites of different banks and enquire about home loan interest rates. Always compare the loan based on downpayment, repayment tenure and EMI. Your research should revolve around these three factors.
Focus on affordability
Although, you will find many home loan options, settle for one that’s affordable. This way, you will be able to pay monthly EMIs without a lot of burden. Also, consider your overhead expenses along with the EMI, so that there’s no financial crunch. Also, the EMI amount should not be more than 45% of your total income.
Pay attention to repayment tenure
The repayment tenure is the total time duration in which you will be paying off the loan. Your EMI is directly related to the repayment tenure. Longer the tenure, lesser the EMI, but this will have an adverse impact on the interest rate. Thus, you need to plan accordingly and decide if you want to for a shorter or longer repayment tenure.
Have a good credit score
When applying for a loan, the bank checks your credit score. If the credit score is low, you might not be eligible for the loan or get it at a higher rate of interest. Therefore, it is important to maintain a good credit score.
Check home loan eligibility
Instead of getting rejected or ending up paying more interest, it is better to check home loan eligibility beforehand. IndusInd Bank, for instance, has a home loan EMI calculator, in which you can enter the details and get an approximate idea of the EMI. The eligibility criteria for the applicant is also there on the website. Do online research so that you do not end up wasting time in getting rejected by banks.
Check additional charges
When applying for a loan, there could be other charges such as processing or service charges and administrative charges that banks levy upon borrowers. It is important that you discuss the additional charges with the lender. Also enquire if these are one-time or monthly charges so that you can plan accordingly.
Final Words
When looking for a home loan, it is wise to consider the above-discussed factors so that you get a better deal and stress-free home buying experience. You can also apply for a home loan online on IndusInd Bank and enjoy an unmatched service from the comfort of your home.
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