By William Robson
In India, every year thousands of people apply for a home loan, out of which many people face rejection due to noncompliance. So, it is advisable to have the right knowledge about the home loan procedure before submitting your application. Read on to know more about a step-by-step guide.
Buying a new home requires several weeks and months of planning. You must find the best home to suit your needs and budget and get the best deal on home loan. Availing a home loan is a big financial decision. It is a long-term commitment. You must repay the amount through EMIs through the loan term, which varies from 15-30 years. Therefore, it is paramount to take your time to research different options and understand the home loan terms and conditions. There are many online tools that can help you get the best home loan offer.
Your home loan eligibility depends on certain important factors like age, employment history, occupation, income, qualification, exiting liabilities, etc. Most lending institutions offer a loan wherein the EMI will be between 40% to 50% of the monthly income. However, you must know that the eligibility criteria differ from lender to lender and it is advisable to check the lender-specific requirements before submitting your application.
An online EMI calculator home loan is a useful tool that helps you compute the approximate EMI amount payable to the lender. To calculate the EMI, you must enter certain important details in the calculator like the loan amount you want to borrow, the interest rate, process fees, loan duration. Once you enter the details, based on the input, the calculator will automatically do the calculation and show you the amount within seconds. By knowing the exact amount payable, you can take an informed decision.
There are different components, which you must know to maximum the benefits of home loan EMI calculator and eligibility calculator:
The loan amount – Before applying for a home loan, it is advisable to have a budget in mind and apply for a specific amount to fund the purchase. Based on the total price of the property, you can calculate the down payment; typically, the lenders require the home loan applicants to pay at least 20% of property’s value as down payment. You must pay the down payment amount before the lender disburses the loan.
Loan duration – You will have to choose the loan term based on the EMI and other existing liabilities. You must know that longer the loan term, the lower will be the EMI amount, and vice-versa. But, when you opt for a longer duration, your overall interest payment will be higher. You can use the EMI calculator to determine the right duration so that the EMI is affordable without compromising on your regular expenses.
Interest rate – Once you determine the loan amount and the tenure, you must input the interest rate charged by the lender. Today, owing to the stiff competition among the lenders, you can easily find a loan at a competitive interest rate starting from 6.90%. The interest rate varies based on the amount you borrow, your repayment capacity and credit history.
Repayment options – Today, many lenders in India offer flexible repayment options to the home loan borrowers to ensure that they don’t face any financial hassles in servicing the loan. Some lenders even allow you to customise the repayment mode to suit your specific needs and financial capacity. For example, you can increase the EMI amount as your income increases. You can also choose to prepay the loan before the end of actual term and close the loan account early.
Final Word
Applying for a home loan is easy. But, to ensure that your application is not rejected, it is advisable to use various online tools to know your eligibility and other factors.