Home Loans are loans which are provided by the lenders for purchasing of a new house, home improvement, extension and renovation of existing house and construction of a home on the plot. Home loans are offered for both salaried and self-employed borrowers. Special schemes are available for senior citizens and women borrowers. Many banks also offer an overdraft facility to save interest on home loans.
Some key features of home loans are:
- Eligibility: Home loans are offered to individuals in the age group of 21-70 years. It is available for both salaried and self-employed.
- Security: One needs to mortgage the home which one is planning to purchase, construct or renovate as security to the lender.
- Loan Amount: One can borrow in the range of Rs. 5 Lakhs to Rs. 50 Cr.
- Loan Tenure: It varies from 5 to 30 years.
- Loan to Property Value Ratio: Varies from 75 – 90 percent.
- Interest Rates: It varies from lender to lender. The starting rate is usually 8.60%.
- Processing Fees: Minimum Rs.10000 or up to 1 percent of the loan amount.
- Documents required: Address Proof, Identity Proof, Income Documents, Property Documents
Fintech like LoansJagat provides an excellent platform for comparing different banks and housing loan companies on the aspects of rate of interest, lending process, processing fees, prepayment charges and customer service of lenders. To get the best home loan rates, it is advisable to do online loan comparison before finalising one.
Step 1: Check Housing loan EMI and calculate Home loan eligibility
It is always advisable to estimate the loan amount eligibility to know about the amount for which you can apply for. Also, calculate the EMI which you would be able to pay comfortably without burdening self. The home loan eligibility is calculated on account of your age, property time, net income, existing obligations, market value of the property, etc. EMI is calculated on the basis of your loan amount, rate of interest and tenure. After you are through with your minimum loan requirement, EMI and eligibility shortlist the banks which offer the maximum loan amount which caters to your needs.
Step 2: Check property approval status and legal documents
Before buying the property, check for the banks which have approved the projects (if you are buying from a builder) and/ or check the approved map plans and make sure that all property registration documents are complete from the first owner to the present owner and are correct and in place. Shortlist the banks which provide loan on the selected property.
Step 3: Decide on the type of home loan interest rate offers
As you choose the list of banks in the above two steps, simultaneously conduct an interest rate on home loan comparison. Ensure you check for the interest rate offers on the following:
- Fixed and floating rates: Fixed rates are higher in comparison to floating rate loans. In fixed rates, the interest rate is constant throughout the loan tenure whereas, in floating rate loan, the rate of interest is reset at periodic intervals as per the changes in MCLR and PLR rates of banks and NBFCs.
- Home saver loan: It is a loan with an overdraft facility that lets you deposit surplus amount in your home loan overdraft account as and when available thereby reducing the interest amount. It is advisable for salaried persons with good bonuses and for self-employed persons with fluctuating cash inflows. The rate of interest on these is slightly higher than the normal housing loan.
- Take an informed decision by comparing the current home loan interest rates of the banks on different types of loan products.
Step 4: Compare shortlisted banks
Apart from interest rates, banks also charge other fees viz. processing fees, prepayment charges, insurance premium and foreclosure charges. Calculate all-inclusive costs on home loans to further shortlist the banks on these accounts. You can take help of LoansJagat to compare home loans and get the best deal.
Step 5: Select the bank based on other service related parameters
Apart from the loan, also consider factors like customer service and transparency in terms of dealing. Look for quick loan delivery, transparent loan process, doorstep services for smooth loan tenure. Do thorough research and make an informed decision. It is always advisable to tune oneself with the trends and changes in MCLR rates.
Although all banks nowadays offer the most attractive schemes and offer on Home loans. LoansJagat puts all these schemes and offers in front of you in comparison so that you can choose the best rates, eligibility, calculate EMI and make an informed decision. LoansJagat assists you throughout the loan process from online application to the disbursal of the loan along with after sales help till the end of the loan tenure.