Important Steps to consider for Home Loan from Start to Finish
With real estate prices rising steadily in India, for most people, the only way to realize their dream of purchasing a house is by availing a home loan. In recent years, availing a home loan has become considerably easier than before. Also, with the RBI cutting down the Repo Rate and the consequent reduction of the MCLR, now is a good time to avail advances at lower housing loan interest.
Borrowers can also enjoy principal repayment and home loan interest tax benefits according to the Income Tax Act every year all throughout the repayment tenor.
However, the process of applying and availing the loan can become complicated if you are not aware of the steps involved. So below is everything you need to know to get home loans in India.
Step 1: Know Whether You Comply with the Eligibility Criteria
The first step to avail a home loan is to know whether you are eligible to avail it. There are a few factors that determine your eligibility for availing the loan. For instance,
- Age: You need to be between the ages of 23 to 62 years if you are a salaried individual and between 25 to 70 years if you are self-employed to avail a home loan in India.
- Employment Status: You must be with your current employer for a minimum of 3 years if you are a salaried individual and have a business continuity of minimum 5 years if you are self-employed. You must also have a minimum salary of 25,000 to avail a home loan.
- CIBIL Score: Your CIBIL score is determined from your credit history. A CIBIL score of 750 and above will let you avail a home loan at preferable terms.
If you comply with the above conditions, you can avail home loans in India. You can also check with online Home Loan eligibility calculators from financial institutions to know the amount of loan you are eligible for.
Step 2: Know the EMI You Have to Pay
Knowing the EMI or Equated Monthly Installment amount you need to bear is perhaps the most important step to consider while applying for the loan. Your EMI is calculated on the basis of the repayment tenor, loan amount availed and housing loan interest rate applicable.
You can calculate your EMIs easily using an online house loan calculator from financial institutions. Apply for a loan amount which eventually computes an affordable EMI value.
Step 3: Know the Loan Interest and Benefits
Housing loan interest is an important parameter which contributes to how much EMI you have to pay. Therefore, it is crucial to know the interest rates offered by the financial institutions to form an idea about your monthly payments.
Borrowers must compare the current home loan interest rates and other associated costs from multiple financers before choosing one. Apply with the lender offering the most favorable terms.
Step 4: Loan Approval and Disbursal
A borrower must abide by certain eligibility criteria to avail a loan. The loan approval and disbursal time varies from one financial institution to the other. Some NBFCs can sanction your loan application within 24 hours of applying, subject to meeting simple eligibility criteria and basic documentation requirements.
Step 5: Apply for the Loan
You can apply for a home loan online easily by following the steps below:
- Go to the lender’s official website.
- Fill in the loan application form and provide all the necessary details.
- Select the amount of loan.
- Provide the documents required and submit your application.
If you follow these easy steps mentioned above, you can ensure that your process of availing a loan is completed without any glitch. Thus, applying for a home loan and availing it is not complicated if you have a clear idea about the steps you need to consider and follow through.
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