A home loan is ideal for someone looking to buy a house but does want to not spend all the savings on one occasion. It is a secured loan which is used to buy or build a new house, and most importantly, this property itself is collateralised. Apart from this, it has multiple perks, such as affordable home loan interest rates, lenient eligibility criteria, multiple repayment facilities, etc.
Features and benefits of a home loan
The following information will help people understand the unique features of a home loan:
Competitive interest rates
One of the best features of a home loan is its affordable housing loan interest rate due to its secured nature. However, people can compare other lenders and different types of rates, such as home loan fixed interest rates and floating interest rates, to get the best rate in the market.
Qualified individuals can obtain a substantial loan amount to fund their house purchase. Also, individuals can increase their down payment to reduce the repayment load, which can also improve their chances of availing the required credit.
The maximum tenor for home loan can be extended up to 30 years. As a result, it enables people to manage their financials easily and repay this amount comfortably. However, it is essential to note that while a longer tenor guarantees affordable EMIs, it also results in higher interest expenses.
Multiple repayment options
Only a few lenders can approve a loan request during the property’s construction phase. In certain cases, they might also provide customised EMI payment plans. In this regard, individuals can also utilise an online home loan calculator for a better estimation of the interest and EMI.
Balance transfer facility
Existing home loan borrowers have the option of transferring their outstanding loan balance to a new lender with better terms and conditions. This feature lessens both the cost of the housing loan EMI and the interest payments.
Additionally, based on eligibility, individuals may be eligible for a top-up loan of up to Rs. 1 crore. But, they must have a history of proper payments of earlier loans so that they avail the best housing loan in India.
Nominal extra charges
The additional costs for a home loan are also small, which ensures that this type of credit is affordable for customers. So, in addition to comparing interest rates, borrowers can search for reputed lenders who can provide additional benefits, like reasonable fees for part-prepayment and foreclosure options and also top up loan on home loan.
Eligibility to qualify for a home loan
The eligibility requirements for house loans are determined by each lending institution differently for salaried and self-employed professionals. Some of the fundamental parameters are as follows:
- Age range: 23–62 (Salaried), 25–70 (Self-employed)
- Applicants must be a citizen of India.
- Candidates for salaried positions must have a reliable source of income and at least three years of work experience. In comparison, self-employed people must have been in business for at least five years.
Steps to apply for a home loan
Applicants can apply for a home loan either physically or online. But, lenders often advise prospective borrowers to use an online application to speed up the procedure.
Although the procedure to apply for a home loan differs depending on the lender, the following is the standard procedure:
Step 1: Visit the official website of the preferred housing loan provider.
Step 2: Enter basic details and verify personal information using an OTP.
Step 3: Enter other necessary information and then submit it.
Step 4: Upload the relevant documents. Then, a representative from the lenders’ end will get in touch to take the process further.
A home loan can only be used to fund the purchase or construction of a house by keeping it as collateral. Regardless, people must remember that lenders only approve a certain proportion of the asking price of the property they intend to buy. So, borrowers are required to make a down payment on the remaining amount.
In addition to understanding home loans, people need to be aware of these critical aspects, such as home loan interest rates. This will help prospective borrowers to get the best value for their money.