5 Things to Consider While Looking For The Best Home Loan. 1

When purchasing a home of your own, you need to consider many things financially to make the right decision. Home Loans are the most important part of buying a home. In the current real estate market, apartments can be very heavy in your pocket. And to afford these expensive apartments, taking financial help from the banks will turn out to be a wise decision in the long run. You must choose the right Housing Loan that offers you the best interest rates on Home Loan. You could have a huge financial burden if you chose the wrong House Loan. Hence it would help if you did thorough research before finalizing on loan.

Consider While Looking For The Best Home Loan.

The Interest rates differ from bank to bank. Some banks charge high-interest rates, whereas some charge low. The interest rate depends on credit scores, loan amount, and loan tenure. The Interest rates can range from 9.40% to 12% per year. Even a small difference in the interest rate can majorly affect your Home Loan. Therefore, the best option is for a lender offering less Home Loan interest rate. Considering the banks that also follow the MCLR rule for interest rates, this rate-setting instrument is preferable to pass on reducing the interest rates to you than the RPLR system followed by NBFCs.

  • Credit history:

Having a low credit score shows a poor credit history. If you have a low credit score, you may have to face problems with your Home Loan application’s approval or be required to pay a high-interest rate. If you have a good credit score history, the situation will be reversed, i.e., you have to pay less EMI, and the loan approval process will be quick. Maintaining a good credit score is extremely important.

  • Loan to value (LTV) percentage:

Loan to Value (LTV) is a part of the property value financed by the bank through Home Loans in the future. The down payment for the property comes from your pocket. A bank can only invest 90% of your property in a Home Loan. For apartments priced at INR 30 lakh to -70 lakh and above INR 75 lakh, the LTV ratio can go up from 75% to 80%.

  • Loan tenure:

NBFCs present up to 30 years of loan tenure. Some banks offer self-employed people lower assignment; some still have 20 years for all customers. It would help if you chose the bank offering the most inadequate term to reduce the EMIs on your Home Loan.


  • Loan processing time and fees:

Home Loan application fast, whereas some have a slow process. Look out for banks with a quicker loan processing system if there is an immediate requirement for a loan. Also, opt for banks that charge less or no processing fees. Lenders charge processing fees to incur the various processing charges on your loan. Doing thorough research before choosing one lender or financial institute is necessary.