4 Factors to Keep in Mind while Availing a Home Loan
If you are considering your first home loan, there may be a lot of questions on your mind, and there is a fair chance that you might miss out on these factors. To make this seemingly complex process easy for you, we have listed all the key things you need to look out for before you take a home loan.
- Get Your Credit Report
The first thing you need to do before you go about the application process is get your credit report. With lenders like Bajaj Finserv offering free CIBIL score checks, it is very easy for you to see your credit score and review your credit report. This will help you take stock of your finances and give a realistic assessment of where you stand with respect to getting a home loan via online loan app on favorable terms. Any credit score above 750 is a good credit score.
The reason for checking your credit score first before doing anything else is that your credit score is like a financial health report card, i.e. how reliable you have been in repaying your past loans. With a high credit score, you prove that you are very careful to repay your loans, and viz-a-viz encourages trust in the lender to provide you with a home loan. With a decent credit score, you can negotiate better terms with the lender.
If you have a low credit score, it is advisable that you boost your credit score using simple steps such as paying your bills on time and avoid the accumulation of debt. That way, the acceptance of the loan will not be denied.
- Meet your lenders’ eligibility criteria
The next factor you must consider is the eligibility criteria set by the lender of your choice and how comfortably do you meet it – every bank or NBFC has its own eligibility requirements, which must be met by the applicant before any loan is accepted.
Home loans are usually for a large ticket size and lenders tend to be strict before approving any loans. NBFCs such as Bajaj Finserv offer the following general eligibility requirements:
For salaried customers:
- You should be a residing India citizen
- You should be aged between 23 and 62 years
- You should be a salaried individual with a minimum work experience of 3 years
- The minimum loan amount you apply for is Rs. 10 lakh and maximum is Rs. 3.5 crore
- Salary requirements and minimum property value vary as per the city you reside in
- Keep your down payment ready
The next thing you need to keep up with is the down payment. You can start searching at properties only after you have completed your budget, depending on which location you determine. With this detail, you can keep your down payment ready, which every seller expects you to pay for. The purpose behind this down payment is not only to make sure that the seller doesn’t search for other buyers, but also to protect the interest of the seller to ensure that the buyer doesn’t back the offer as well.
The down payment may also be on the higher side, as the money involved in the real estate industry is also high. So, it helps to be prepared with the down payment to ensure that you don’t miss out on your dream home.
- Consider the type of interest rate applicable – Fixed or Floating
Next comes the option of the form of interest rate. There are two kinds of interest rates, namely fixed and floating. Under the fixed type of interest rate, you will pay the same EMI for the duration of the loan term at the fixed interest rate. It will not be affected for the full term of the loan in any event. On the other hand, the floating interest rate is where the EMI can vary in terms of the economy and price volatility. You are lucky if the EMI reduces the interest rate, but if the interest rate increases, you will have to pay more.
Now that you know the four important factors that you must consider when getting a home loan, also spare a thought on how you plan to go about the process. Bajaj Finserv, one of the most diversified NBFCs in the country, offers home loans via its handy home loan app. Simply download the Bajaj Finserv Experia app and get all the information you need about your home loan – from the application process to all the paperwork – in one place.