Monday, 13 June 2016

How to choose a home loan wisely

Although it has become quite easy to avail a home loan in India, one should be careful while choosing the best one thereby saving money on the interest rates. With a lot of important features like lowest fixed and floating interest rates, availability of prepayment option, special concession for women and senior citizens etc it is easier for individuals to save money.

With a number of private financing institutions and banks offering flexible interest rates with various budget options, it has become quite simple to apply for a home loan. With every year these banks come up with new schemes, so it is advisable to consider your options. We give you a few ways below to save your money while availing a loan.

Check the percentage of loan offered- Banks offer varying percentage of the total outlay require to purchase a home, so if you have one bank offering you 80%, check for one which will give you 85%. This will help you reduce the amount of down payment, however, keep in mind that consequently your EMI would go up.

Analyze the interest rates and prepayment charges – Check for loans that offer you free processing or lesser EMI, lesser prepayment charges to save your money. In case of floating interest rates, banks cannot charge a prepayment penalty to borrowers.

Consider the process and time involved – Loan disbursement process is quite long a tedious job involving multiple documents related to income and property. Research a little and decide on a bank that has a simpler process and offers you a better deal.

  Check for Special Concessions or offers- Many banks offer you special concessions or offers like lower interest rates for women, or senior citizens, EMI holiday etc. check if your bank has any such offers and avail them to get maximum benefit.