It is common to seek home loan from banks. Also, home loans are now available cheaper. And process of online applications has made approvals and disbursals fast. If you are planning to take home loan. Here are few things you must keep in mind.
If you are planning to buy house in future. Then you must maintain your credit score well. Today, interest rate is link to your credit score. Many bank reserve their interest rates with CIBIL score of 750 or more. Those are below this you have to pay high interest rate. Cheaper loan allows you to borrow high amount. You do not have to wait till you apply for loan to know what your credit score is.
All finance companies get from CIBIL details of each and every customer who is applying for loan. CIBIL maintains all financial history of an individual. If you have applied for loan earlier this got reject due to any reason. CIBIL maintains that record for further references.
Home loan charge different Interest rates
Home loans offer fixed interest rate or floating rates. While fixed interest rates remain same through loan duration. Today, all new floating rates are link to MCLR. Whose interest rate reset at fixed rates. This will give benefit to you. In last three years interest rates have been down. See Best option to invest money
Negotiate Interest rate
Lenders define interest rate in minimum and maximum range. On your eligibility actual rate depends. As borrower, you have ability to negotiate better interest rate. You can do this by comparing your loan options. Also, you can improve your eligibility by adding co-borrower income with your own.
Do not forget that you can negotiate on interest rate. f you are an old customer with bank. Have clean record in your credit history for payments done on time? Use it to negotiate loan amount and rate. Also, try to purchase loan at end of month.
Know your borrowing capacity
You often take lot of burden to pay EMI. So you think that is easy as your income will increase. But your income may or may not increase with time. Try to reduce borrowing amount to reduce interest out go. You can make changes in tenure to reduce or increase EMI amount depend on your affordability.
After comparing buy home loan
There are hundreds of banks offer home loans at attractive interest rates. Before you go for loan. You must compare between different loan products available in market. To choose right loan look at EMIs, processing fee, interest rates and other charges. By Comparing you will choose loan most reasonable interest rate with limited fees and charges.
Also, see home loan precautions. For more details check home loan tips in India. If you are first time home loan buyer see tips. Learn more about How to manage your finances