Every other lender is now offering attractive interest rates on a housing loan. On one hand, it is providing great deals but there is no doubt that it is confusing people.
So, how would you know which bank is good for you? There are some very simple yet important rules that you need to follow to choose best home loan rates and lenders. This will help you select one lender and you will then be able to repay the loan smoothly.
In this article, we have given some very tips which you can follow to choose the best interest rates. Also, you will get to know what are the others charges linked to the loan. This is important because many borrowers do not pay attention to these and end up choosing a not-so-budget friendly home loan.
Compare home loan interest rates
This is the most common approach to find out which lender is offering a lower rate of interest. But, how do you compare? You can look for different compare home loan at different lenders and visually compare them. You can also calculate EMI based on the expected loan amount and desired tenure for different rates. The combination which results in the lowest EMI is the most preferred one.
Pay attention to special rates
Almost all lenders have special rates for women applicants. With this, a male borrower can make his wife or mother the main borrower and get a lower rate on home loans. There are also some special rates for applicants have an excellent CIBIL score. So, check if you come under their requirement and make sure you get the special rate. Also, salaried and self-employed applicants also have some special rates depending on the employer category and business stability. The fact is that applicants who are working with big firms have good chances of getting the desired rate but only if they have a good credit history.
Compare home loan processing fees
Many people do not pay much attention to processing fee which always has to be paid for all loans. This is a one-time fee and has to be paid at the time of disbursal of the loan amount. It is deducted by the lender from the disbursal loan amount. For home loans, the processing fee ranges from 0.50% to 1% of the loan amount or a maximum of Rs. 10,000 plus GST which is 18% of the processing fee. You should always check this fee and try to negotiate with the lender as it is not a fixed fee. You can undoubtedly ask for the lowest processing fee.
Look for other charges on home loans
Other than interest rates and processing fees, a borrower also has to pay certain charges such as stamp duty and insurance. Many lenders have made it mandatory to buy a home insurance with their home loan but it is not mandatory at all. So, make sure you check it before finalizing your loan and if you do not want it, don’t take it in pressure. The insurance amount is deducted from your disbursed loan amount.
If all of this is kept in mind while choosing a lender for a housing loan, only then you can say that you have got the best home loan rates. So, make sure you keep these in mind.