It is the dream of so many people to live in their own dream homes. They avail of a home loan when there is a shortage of saved money.
But, if you want to apply for a home loan in India, being a first-time borrower, you need to consider a few things.
Let’s check them out in today’s post!
- Compare all Available Home Loan in India offers
Being a first-time borrower, you may be confused about which housing loan offer to go for. The current home loan interest rate may seem good of a lender, but you may again regret not checking out the deal of another creditor. It is where it becomes extremely vital to compare all available home loans in India offers. This way, you can compare all deals and their features and pick one matching your needs and budget. Many third-party websites provide you with this service and are available for free.
- Should you Apply with a Bank or an NBFC?
Another dilemma that a first-time borrower may face is to choose between a bank and a non-banking finance company (NBFC). Banks may have stringent terms for home loans considering it is a long-term obligation. Hence, they may not approve the loan application of all. On the other hand, NBFCs may have relaxed home loan eligibility criteria and documents required. Their approval and disbursement time is also less than other lenders. You can look at the features and benefits offered by banks and NBFCs to decide between them.
- Know an Amount that you will be Eligible for
First-time loan borrowers should have an idea of the amount that they can get as housing finance. You don’t have to calculate it manually and make mistakes. You can use the home loan eligibility calculator available on a lender’s website. Once you enter a few details, the online tool will showcase an amount that your income can support. Based on your income and obligations, a lender will sanction an amount. If you apply for a similar amount, you can get faster loan approval.
- Be Aware of the Home Loan EMI amount
A home loan in India is a long-term obligation. It means that the loan will be spread over a longer tenor. It may help you pay off a smaller EMI amount, and that may not affect your outlays. But, it also means paying higher home loan interest rate charges. Being aware of the exact home loan EMI amount makes you confident of how much to pay. It is where using the home loan EMI calculator comes into the frame. After you choose a few details of your loan, the online tool will showcase the precise EMI figure. It will also display the exact home loan interest charges. Being aware of these figures can help you approach the loan with confidence. It is because you will be able to plan your finances and ensure no defaults.
- Start preparing to pay your down payment amount
No lenders will sanction the entire cost of your new home. About 15-25% or less more may have to be borne by the borrower. The ratio may differ from lender to lender. Hence, while applying for a home loan in India, it becomes a must to prepare your down payment amount. If possible, try paying a higher down payment amount. Why? The higher is your down payment amount; the lower will be the borrowable amount. It also means lowering down your EMI amount and pay smaller interest charges.
- Maintain a higher CIBIL score
Whether it is a secured or an unsecured loan, you need to maintain a robust credit score. It will help you get the loan approval faster and at a lower rate. A strong CIBIL score is a sign that you can make timely repayments for a loan. Hence, lenders may not have any objection to award you with the approval for a home loan in India. A credit score of 750 or more is what lenders ideal to consider your home loan application.
If you can consider the discussed home loan in India tips, then applying for it being a first-time borrower may not be an issue.