It is not every day you get to buy or build a house. The planning usually goes on for many months, even years before the decision is finally taken. In festive seasons, many lenders try and lure potential customers with attractive discounts and special offers on home loans. It is wise to plan and make your home loan decision around Diwali to avail these exciting offers. However, there are some tips you can keep in mind to make your experience even better. Thereby, there is also a low home loan interest rate which we can see.
What are these and how they can help? Read below to find out more.
Table of Contents
Being aware
Several factors contribute to your eligibility towards a home loan. Some of the common ones are your financial condition, credit history, credit score, current age, number of working years remaining and employment status.
- For instance, the age limit for both salaried and self-employed individuals is 21 – 65 years for most lenders
- In case of salaried individuals, most banks have a minimum bracket on monthly salary – usually 10000 – 25000 INR
- Other financial obligations like EMIs you are already paying and the credit card debt you have accumulated also plays a vital role in eligibility determination
A great credit profile
You should maintain a credit profile and CIBIL score that speaks positively about your credit habits. Generally, a CIBIL report rating of 750 or above is considered fine and helps you to get loans. If, unfortunately, you have not been paying attention to this earlier, fret not, for it is easy to fix it quickly.
- Paying off your outstanding debt in a disciplined manner certainly helps. You can set reminders to form this habit and see your credit score soar automatically
- Another way to boost it is to retain old credit cards – continue using and paying them off to build a long credit history
- Sometimes the CIBIL score can be erroneous due to incorrect data in your profile. Make sure you keep checking it monthly and get your data to avoid this
Select the best offer
What shines is not always gold! Sometimes, the most inexpensive loan offers tend to have hidden charges and heavier processing fees than the rest. Make sure you do all due diligence before settling for an offer.
- Compare all offers from multiple lenders with easily available online calculators. A cost-analysis of total interest payable, amount of each EMI and other important factors should help you decide
- Some banks charge a flat processing fee while others, a fixed ratio over the principle. Lenders are smart in sugar coating information to show their offer as the cheapest. Be vigilant and avoid traps
Eligibility calculators
An easy and quick method of getting a fair idea of home loan eligibility, EMI amounts and tenure is a home loan eligibility calculator.
- They are available online for free and require some basic information like the amount of loan required, interest rate and age to process results for you.
- Although the concerned lender’s offer prevailing at the time of your actual application approval might differ, the calculator will still give you a pretty good idea
Maintain all documents
Banks and other lenders only differ in interest rates and other charges in home loans. The documentation is mostly the same for everyone; therefore, it is good to keep all relevant documents handy at all times.
- Proof of identity and address are the most commonly required documents. You should keep some copies of your Passport, Driving Licence or Aadhar Card in a file for accurate documentation and easier processing
- If you are salaried, print the last few salary slips and bank statements for the last 2-3 months for speedy documentation. For business owners, bank statements with a couple of last income tax returns are required
Saving some funds
This might appear counterintuitive, but the more you save for an upfront down payment on your loan, the lesser you would have to pay in EMIs and the subsequent interest.
- You might want to cut down on luxuries for a while to save up some funds. You can also withdraw non-performing investments that did not do wonders for you.
- Prioritizing the necessities, budgeting your monthly expenses and recording expenses can contribute towards higher savings
- You can also follow the infamous ’30-day rule’ – any impulsive buying decision should be reconsidered and the amount put into a savings account
These tips can help you prepare, decide and avail a great home loan offer during Diwali and fulfill your dreams of a home come true quickly.