These days, it is possible to avail of a home loan within a matter of minutes! Yes, unbelievable as though it may sound, this is the truth, thanks to the latest Fintech technology and the proactiveness of banks. Who does not want to own the home of their dreams? It is to fulfill these aspirations that the Indian banking system has come up with prompt solutions to ensure the swift release of the loan. The minimum requirement of documents adds to the seamless process. In this article, we will discuss six ways to avail of an affordable housing loan.
Before we delve deep into the article, let us outline the main points that showcase why it is easy and prudent to go for a home loan. The interest rates of home loans are low compared to other loans such as personal or car loans. Importantly, the cheapest home loan may come with an interest rate that is as low as 7%. Therefore, there is no reason to postpone the buying of your dream home. Get some basic documents ready, do some basic online research, and get ready to avail an affordable home loan promptly. Now, we will explain the different ways in which one can avail of an affordable home loan.
1. Ask for references from friends and family:
One of the best ways to start the process of scouting for a home loan that ticks all the boxes you have in mind is to first ask friends and family members who have recently bought homes for their input. From these resources, you can know some basic information about housing loans, such as the interest rates, any peculiar conditions put out by the lender, processing fees, the approachability quotient of the bank, and so on. You can have a freewheeling discussion about the process with your loved ones, and their advice is bound to be unbiased. You can also inquire with your friends and family members about how they approached the entire process of house loan hunting and get crucial tips that may help you along the way.
2. Research the loan provider’s website
One of the simplest and smartest moves is, to begin with, a thorough study of the loan provider’s website. Most banks have highly user-friendly websites with a ton of information out there for their clients. Read thoroughly and prepare a list of questions that you may have. Additionally, make it a point to compare the best home loan lenders on criteria such as their interest rate, loan repayment period, processing fees, and other terms and conditions. By going through the banker’s website thus, you will boost your confidence and be prepared beforehand. What’s more, many financial institutions are known to provide instant loans with a hybrid of online document submissions and in-person credibility checks.
3. Understand the documentation required
It is important to be well prepared with the documentation that a bank requires. Typically, a bank asks for a variety of documents from the prospective lender to ascertain their identity and to check their financial credibility. It does not help your case if you are tardy in collating the required documents. Therefore, begin your preparation well in advance to ensure that minimal time is wasted owing to slags from your end when you apply for a home loan. Normally, the bank’s official website will have a list of documents that are required. While the requisite documents differ from bank to bank, below is an example of the type of documents required:
- Passport
- Aadhar Card
- Driving License
- Voter ID
- Proof of Income
4. Understand the type of interest
While scouting for a loan, the rate of interest is one of the most important criteria. Even a difference of 0.05% in the interest rate can translate into thousands of rupees in interest paid to the bank. Of course, each bank has its own set of terms and conditions, and if these do not suit a borrower, then they often go with a bank to apply for a housing loan that takes more interest but offers more leeway on other counts. The rates of interest for different banks vary greatly, and many free website tools offer an instant comparison of the interest rates of different lenders.
5. Know the finer points of the deal
It is of utmost importance to understand all the salient features of the terms and conditions. For example, while choosing a home loan, it is also important to know what kind of rate of interest you will be paying – fixed or floating. Clarify the nitty gritty with your bank officials and fully understand what you are getting into before you close the deal. Some banks would be more than happy to take time out to chat with you and alleviate your worries. However, the same may not be the case with other banks. Therefore, also gauge how approachable a bank is and how your future interactions with them might pan out.
6. Maintain a good CIBIL score
A CIBIL score indicates your financial credibility to lending institutions. One can easily find one’s CIBIL score online. It should be ideally at least 750 out of 900. You can strive to maintain a good CIBIL score by regularly paying your credit card bills, not faltering on your EMIs, maintaining a stable income, showcasing a steady professional graph that comes without too many gaps in between, and so on. Banks will typically check the CIBIL score before they make any decision. Some banks provide a greater leeway in this regard, and in case your credit score is low, you might want to look up these options, including online loan lenders.
In conclusion, it is easy to avail of an affordable home loan. As mentioned in the article, there are several ways in which one can become more well-informed about the topic and enter into fruitful conversations with bank officials. One can ask for references from friends and family and also look up the bank’s website. It always makes sense to compare the interest rates offered by different banks. Be prepared with all the required documents and get your CIBIL score in order before applying for a loan. Best wishes on getting your dream home!