Home loan can be a daunting prospect, especially considering the length of time involved. However, just by keeping a few key points in mind, we can make sure that we get the best home loan deal possible.
From the time we start earning, many of us work towards saving enough money to buy a home for ourselves. True, our parents may already have a home but still we feel the need to buy a home for ourselves, to have our own space. However, with rising cost of living, just surviving month to month can be a tough task in itself. This is where a home loan comes in extremely handy. For the average person, it is an effective way to buy a home and still keep living the lifestyle they are used to. Nowadays, there are many options available, like ICICI Bank home loan, HDFC Bank home loan, DHFL housing loan, Indiabulls housing loan, Axis Bank housing loan and more. Before applying, we must analyse all the terms involved and make sure we are getting the best deal possible.
This is the most important feature of a loan that people look at. This is the key figure in determining exactly how much you will pay back to the financial institution. Currently most players offer housing loans at 9.55% interest. However, this can reduce to 9.5% in the case of women. For example, ICICI Bank housing loan, HDFC Bank housing loan, DHFL housing loan and Indiabulls housing loan, all have interest rates from 9.55% with 9.5% for women. However, the Axis Bank housing loan interest rate starts at 9.6%.
Home Loan Tenure
This is simply the amount of time that you will pay pack the loan. In effect, it is the number of years that you will be paying the EMI for the loan. The longer the term, the lighter the monthly burden, however you also end up paying much more than the original borrowed amount. On the other hand, if you want to pay back less, you can take a shorter tenure but with the added burden of a higher EMI. Most home loans like ICICI Bank home loan, HDFC Bank home loan, Indiabulls home loan, Axis Bank home loan offer tenures of up to 20 years. DHFL housing loan offers a tenure of up to 30 years.
As your tenure progresses, you will no doubt progress in your earning capacity as well. You may reach a point where you feel you can pre-pay all or part of your housing loan to ease your burden. This is where pre-payment charges come into play. If an institution has these charges, it may actually be more financially prudent to not pre-pay the loan. Axis Bank home loan has no pre-payment charge while ICICI Bank housing loan and Indiabulls housing loan have no pre-payment charge for floating interest housing loans. DHFL home loan has a nominal fee and service tax on pre-payment. HDFC Bank home loan has stipulated differing charges based on whether the loan is floating interest and also how much of the tenure is left.
Along with these, there are a few other factors like floating and fixed interest, processing fees and of course, the reputation of the lending institution that come into play when choosing a housing loan. The home loans mentioned in this post, namely ICICI Bank home loan, HDFC Bank home loan, DHFL home loan, Indiabulls home loan and Axis Bank home loan are all from established organisations with several decades of experience in the lending sector.