With home loan interest rate offers as low as they are and developers offering great deals, now may be the best time to make that dream home yours. However, a home loan is a big undertaking, which requires proper research and planning. While financial health is of prime importance when applying for a home loan, quite a few other aspects also play a role in getting a home loan. Let’s take a look at four things you should consider before opting for a home loan.
Check lender-specific home loan eligibility criteria
It is quite normal for lenders to have unique requirements, so make sure you check the lender’s requirements before you apply for the home loan. Failure to comply with the criteria could not only result in rejection of your application but could also lead to unfavourable lending terms, such as a higher home loan interest rate. Listed below are some general home loan eligibility criteria you should keep in mind before you apply.
- Applicants must have a steady source of income
- Applicants must meet the minimum income requirement, which can be as low as Rs. 30,000 per month
- Applicants must have a CIBIL score of 650 or higher
- Applicants must be between the ages of 23 and 60 years
- Applicants must choose properties or builders approved by the lender
Maintain a high CIBIL score
Your CIBIL score dictates your credit health and is very important to lenders. To qualify, most lenders require you to have a CIBIL score of at least 650, but this will only get you through the door. It is recommended that you apply with a score of at least 750 to get access to more favourable loan terms. Considering that it is in your best interest to secure the lowest home loan interest rate possible, it may be wise to apply only when your CIBIL score is at this mark.
To attain and maintain such a score, common practices include:
- Paying off all forms of short-term credit
- Addressing issues or discrepancies in your credit history
- Having a clear repayment track record
- Avoiding multiple credit applications in quick succession
Scout for the best home loan interest rate
To truly borrow cost-effectively, it is smart to research all options available in the market. List out all the possible lenders that you qualify for and then compare their offering; you can start by identifying the offers with the lowest interest rates. Use this to shortlist a few offers and then pick the one with the best loan features.
Such a comparison also helps you understand overall loan affordability. When scouting for the lowest home loan interest rate, you have the opportunity to calculate the total cost of the loan and determine whether it is the right fit. This is a crucial step as it helps you get a rough idea of what repayment will look like for the foreseeable future.
Prepare to make a Down Payment
A common misconception is that a home loan can cover the entire cost of the property. The fact is lenders will only fund up to a certain percentage, usually 75-80%. The remaining 20-25%, or more, is the down payment you are required to make. Be prepared for this investment as it can be quite a sizable sum. Also, the larger your down payment, the lesser the loan amount required, which ultimately results in lower interest outgo.
It also helps to know the home loan tax benefits available to you. You enjoy tax deductions up to Rs.1.5 lakh for principal repayment under section 80C and up to Rs.2 lakh on interest repayment under section 24b of the IT Act.
Considering these provisions, it is clear that borrowing wisely can be quite affordable. A good way to ensure this is to opt for the Bajaj Housing Finance Limited Home Loan. With it, you can access a sizable sanction at an attractive interest rate. What’s more, you can opt for a flexible tenor of up to 30 years to ensure your EMIs stay within budget. This loan also offers quick and easy application, swift loan processing. To avail these features and benefits, simply apply online at your earliest convenience.
This post was published on March 27, 2021 6:28 pm