Buying a home is not plain sailing for an individual. In metro cities of India, the average home values around 30-40 lakhs, and since one who doesn’t have great savings, they require the assistance of home finance from banks or NBFCs. Home loan is the foremost way to accomplish the financial needs to acquire a home. Before applying for a home loan, the borrower should do accurate research of home finance to get the ideal offers. As the competition has increased significantly in the finance sector, many banks and NBFCs offer several benefits on a home loan to attract customers. But, here are some factors that determine the lowest interest rates you can secure on home loans.
1) The applicant should have a good credit score.
The creditworthiness of an individual is depicted by his or her credit score. Availing lowest interest rates on a home loan is partially determined on the CIBIL score of the applicant. An individual with a credit score above 700, can be granted cost-effective interest rate and low EMIs by the lender. Secondly, you can even negotiate the interest rates with your lender.
2) Down payment helps in reducing high EMI & ROI.
Financial experts advise borrower to make huge down payment while opting for a home loan. This will reduce the burden of high EMI and ROI, as a maximum portion of the amount has been paid already by the borrower.
3) Debt-to-income Ratio is a key factor in the repayment process.
In simple words, Debt-to-income ratio is the ratio of income compared to the overall EMI amount. It is one of the key factors when you apply for a home loan. Financial experts recommend keeping EMIs less than the monthly income to avoid any kind of financial crisis while repaying the loan.
4) The borrower should have a stable job & source of income.
Banks & NBFCs give major preference to applicants with a stable job and regular source of income and avail lower interest rates on a home loan to them. Lenders calculate home loan eligibility on the basis of employment stability and income of the borrower.
5) The age of the applicant is also important.
The age of the borrower matters the most for the loan provider. The eligibility criteria to apply for a home loan is minimum 21 years old maximum 65 years old. Banks favor age group from 35 to 45 for a housing loan.
If you are probing for a preferable deal of home loan, you requisite to analyses offers from various banks. The borrower should keep conducting loan comparison between different banks and NBFCs who are offering lower interest rates and other benefits. The ultimate plan to get an appropriate deal is not to settle with the first bank you approach. In the 21st century, the online home loan has made the process effortless for the borrowers.