Potential applicants who intend to opt for a loan to acquire their own house should be aware of multiple aspects, related to both their finances and other external aspects. While on one hand multiple government initiatives have aided affordable housing across the country, the outstanding home loan amount as of the financial year 2019 has increased to Rs. 11.6 Trillion. This fact has two sides to it; opting for loan products to finance residential property has become easier, although the necessary financial planning that is crucial to repay such debts is often lacking.
Consequently, it is important for potential customers of housing loan schemes to go through the below checklist. This list covers all the aspects of an advance which a customer must check ahead and prepare accordingly in order to buy their house, and ensure easy repayment of the line of credit. Customers should also keep in mind that lines of credit like home loans are essentially secured loans which are granted against the property that is being bought.
Factors to Keep in Mind While Availing a Home Loan –
- Total Loan Amount Offered
One of the most crucial pointers on this checklist, checking the loan amount on offer allows customers to handle all expenditures related to housing with a single financing scheme. Usually, financial institutions offer loans which go up to Rs. 3.5 Crore.
- Applicable Rate of Interest
Potential borrowers should compare different home loan rates in order to avail the low home loan rate, thereby ensuring lower interest repayment. With numerous government subsidies at the offer, convenient rates of interest begin at 6.93% per annum.
- Repayment Tenor on Offer
Home loans are financial products which are of extremely high value. Consequently, financial institutions offer a lengthy tenor of repayment that can go up to 20 years. It is important that borrowers calculate their exact repayment financial structure with an EMI calculator so that they do not face any unwanted monetary burden.
- Additional Financing
Having the option to extend a line of credit with additional financing allow customers more flexibility while choosing their residential unit. In case they require extra money for their home, they can usually avail up to Rs. 50 Lakh as a top-up loan through balance transfer facility.
- Balance Transfer Facility
Along with easy home loan online apply, this feature allows customers to transfer the remainder of their loan account balance to a different financial institution to avail lesser rates of interest and several other additional benefits.
- Prepayment Facility
This allows borrowers to clear a part of the whole of their loan balance with a lump sum payment, thereby cutting down on the interest to be paid. Generally, financial institutions do not require additional charges for this facility.
However, lenders might impose some clauses on prepayment facility. It is vital for potential borrowers to keep in mind the important things to consider before foreclosing their home loans.
- Insurance Cover
Few lending institutions offer an insurance cover which financially protects the household in case of unforeseen mishaps.
Once a potential borrower has checked all the mentioned pointers above and chosen the ideal home loan offer, the application procedure of the same is quite easy.
After completion of the application, customers can expect their loan application to be approved and disbursed within 4 days. This time period is required by financial institutions to verify all the documents pertaining to the housing loan which also include the mortgage and property details. Following this verification and consequent approval, NBFCs disburse the loan amount immediately.
Since these are high-value loans, there are numerous reasons why one’s 20s are the ideal time for taking a home loan. Potential borrowers should keep it in mind to avail these products as early as possible in their career. This will ensure that they can repay the loan without any financial difficulty.