Home is a dream that everyone sees. Owning a house that one could call his own is a wish that everyone wants to accomplish. Thanks to digitisation and the best home loan offer in the market, we can achieve this dream one step at a time.
With so many lenders out there, it might get challenging to choose the right one. To help you out with the step of selection that influences your loan experience, we have formulated this list. The guide has all your questions answered on choosing the right provider. Let’s begin with understanding the housing loan before moving to the pointers to choose the best providers.
What is a Housing Loan?
Understanding the loan becomes more important than applying for it without any knowledge. A housing loan is an amount borrowed by an individual at a certain interest rate to be paid back in a specific duration in the form of EMI’s. The reason for borrowing the loan can be renovating, reconstructing or building a house.
The interest rate applied on the amount differs from lender to lender, and it is also influenced by the credit score, source of income and type of employment of the individual. Before applying for a loan, consider the following pointers to choose the best provider.
Eligibility Criteria
The first point to look upon while finding the right provider is to check the eligibility criteria outlined by the lender. Check for the highest loan amount the lender offers. Check the percentage of the property value the lender offers that typically ranges between 80-85% and can even go up to 90%.
You can choose to check your home loan eligibility online to keep yourself from getting rejected. Checking the eligibility will keep you on the safe side, and you will save a lot of time by preparing beforehand.
Interest Rates
The second thing you must consider is the interest applied to the loan amount. If not checked before, the interest applied directly influences the EMI and might become a burden. The housing loan interest rates differ from lender to lender and are influenced by many factors. Like the applicant’s credit score, the source of tenure, the mode of employment, salaried or self-employed. Compare the interest rates offered by various providers and then choose the right one for you.
Charges and Penalties
Don’t get lured by a lender simply because he offers a lower housing loan interest rate. Check for various other hidden charges. The processing fee is one of those charges that the lenders ask, which ranges between 0.25-2% of the loan amount. You must read the terms and conditions properly to find out hidden penalties that might turn out to be shocking in the future.
Before finalizing a lender, check their terms and conditions thoroughly and clarify your doubts then and there. Take a note of the foreclosure fee and the charges applied on the foreclosure charges. This step is one of the crucial steps in finding the right provider for a house loan.
Documents and Loan Sanctioning Period
What makes a provider reasonable is their proficiency in sanctioning and disbursing the loan. While you find the provider, many must know the documents necessary to avail of a home loan, including identity proof, residence proof, income proof, and other documents.
Check for the lender’s reviews online to get a better idea of the lender and the service they provide. Loan sanctioning and document verification tenure differs from lender to lender and can be as long as five days. The lender’s customer service must also be strong in providing the best assistance. Search for a provider with a strong policy and reliability so that you don’t face any issues in the future.
Keep a note of all these points, and you will find the best home loan provider for your housing loan. Also, check the terms and conditions before applying to understand the lender better. Maintain a good credit score to avail the lowest interest rates and search and apply for the loan online.
