Finding your dream home can be difficult, and purchasing it might be evev more so. However, lenders and financial institutions today offer the facility of getting a home loan to their borrowers. The affordability of a home loan depends on the monthly instalments that borrowers have to pay till the end of their loan tenor consistently. Thus, borrowers should consider factors like the interest rate, loan tenor, and other relevant factors before apply for home loan.
How to apply for a home loan?
By following these 3 steps mentioned below, borrowers can easily apply for a home loan:
Step 1: Visit your lenders' profile and navigate to the home loan section.
Step 2: Complete filling up the online loan application form by providing details as required.
Step 3: Click on the submit button.
After submitting the online loan application form, borrowers have to wait for around 24 hours until some representative from the lenders gets in touch with them. Thereafter, borrowers' will receive a loan approval notification on their registered contact number or via email.
Benefits of home loan
Borrowers' who choose home loans can get the following benefits:
Flexible repayment tenor
Compared to the different types of loans available in the market, a home loan carries maximum repayment tenor. A lender can offer a home loan with a repayment tenor of as long as 30 years. This long loan term gives way to lesser monthly instalments, unlike a short loan term with larger monthly instalments.
Lower rate of interest
Unlike the other types of loans, home loan interest rate is much lower. In addition, multiple other factors can influence a home loan interest rate. Some of these include financial status, age, and CIBIL score of the one applying for the home loan.
No prepayment charges
In case of other loans, lenders charge prepayment penalties. However, for a home loan under a floating rate of interest, there are no prepayment penalties attached to it. Whenever the borrower has surplus money in their hands, they can utilize the amount by making a prepayment towards the borrowed funds.
Multiple tax benefits
As per the Income Tax Act of India, borrowers can get a deduction of up to Rs. 1.5 Lakhs under Section 80C. Furthermore, borrowers can also get exemptions of up to Rs. 2 Lakhs under Section 24B of the Income Tax Act. However, this deduction is allowed on the interest portion and when the construction is over.
Balance transfer facility
One additional benefit of getting a home loan is the home loan bank transfer facility. While within the loan tenor, they can opt for a balance transfer facility and go to a different lender whose offers suit their financial status better. Furthermore, through the balance transfer facility, borrowers can decrease their overall cost of getting the loan.
In addition to these benefits, most lenders or financial institutions offer their existing customers pre-approved loans on various products including home loan and loan against property. One attractive benefit of these pre-approved offers is that they make the loan application process much simpler and help speed it up simultaneously. Individuals can check their pre-approved offers by entering their names and contact number. Apart from this, borrowers should also use a housing loan EMI calculator to get an idea of their future spending on monthly instalments.
How to use a home loan EMI calculator?
The following steps can guide an individual thoroughly to use this home loan calculator with ease:
Step 1: Go to the home loan EMI calculator section on your lender's website.
Step 2: Enter the total amount of loan that you wish to borrow and can afford.
Step 3: Select the tenor within which you wish to repay the entire borrowed funds.
Step 4: Mention the rate of interest at which you want to repay the loan.
After mentioning these details, click on ‘calculate’ or ‘submit’ button. Next, you will get the exact division of monthly instalments or EMI, the total amount of interest payable, and the principal amount.
In addition to all these details mentioned above, borrowers should consult their lender regarding their home eligibility criteria and documents required for applying for this credit type.