How to Choose the Right Home Loan for Me?

Posted On October 29, 2021

If you aspire to buy a home, you can easily make your dream come true by applying for a home loan. Many lenders in India offer a variety of loan schemes at an affordable interest rate and offer customised home loan solutions to meet the specific needs of the borrower.

While there are many lenders willing to offer home loans, choosing the right one can be challenging. So, to help you choose the best home loan, we provide a checklist that you must keep in mind.

• Not all lending organisations have their offices in different locations across India. So, if you want to buy a home at a location that is far from your work, it is better to choose a lender wisely that has an office in both the locations. This will make it easier for you to get in touch with them when the need arises. Alternatively, it is even better to apply for a home loan online. This way you can access any services you want with just a click of a few buttons.
• If you want to buy a land or a plot and construct your home on it, you can easily find many lenders that offer land loan and home construction loans. Remember, applying for a home construction loan is different from a standard home loan. In home construction loan, the lender disburses the sanctioned amount in phases as you complete different levels of construction. Whereas in a standard home loan, the full sanctioned amount is disbursed in lump sum.
• Irrespective of the type of home loan you want to borrow be it a home construction loan, a home improvement loan, or a home extension loan, one of the important factors that determine your eligibility is the credit score. If your credit score is low, chances are high that the lender may charge you a high premium or reject your home loan application. So, before you start looking for a home loan it is better to check your score and see if it meets the lender’s requirement.
• The interest rate is one of the critical factors that you must consider while choosing the best home loan as it has a direct impact on the repayment and affordability. It is advisable to compare the loans from different lenders and choose the one that has the lowest interest. This will help you repay the amount easily without compromising on other financial goals.
• If you want to improve your home loan eligibility, you can consider applying for a joint home loan with any of the earning family members. It can be your spouse, parent, sibling, or child. When you apply for a joint home loan, the lender considers the income of both the applicants, and you may be able to get a higher loan.
• When you compare the different home loan offers from different lenders, you must not look at the various charges levied by the lender. Some of the most common charges, including process fee, documentation verification fee, legal and technical assessment fee, prepayment charges, late payment fee, etc. Be aware of such charges and choose the right lenders that have the lowest fee as it will have a significant impact on the overall loan cost.

Final Word

While the above checklist is not a comprehensive one, it will help you get started in the right direction while looking for the best home loan.