Are you planning to buy a house? If yes, then you may choose to take a home loan. However, home loans have risen up to the extent of 11% which may upset you. In this article we present to you, a list of smart measures you can take to arrive at the best possible solution. Further you will learn about those measures one by one.
Search for the right option
Just as you take a lot of effort to search for the right option in regards to property, the same should be done when you search for home loans. You should analyze each and every option to decide which bank offers loan with minimal formalities. Also the lead time of a home loan must be considered carefully. The lead time is the period within which your funds are disbursed from the bank. Consider, you decide to purchase a property from the seller at a particular period. Therefore, it’s important that you receive the loan money within that period or else you might lose the flat.
You might find suitable to take home loans from a public sector bank like SBI or LIC. It’s because they normally increase rates at a slower rate compared to a private sector bank like ICICI or HDFC. However, you might face a very slow process & lack of responsibility from the bank employees. Below you can see the difference in the interest rates of public and private sector banks.
Home Loan Interest Table
Keep floating rate as an option
Floating interest rates are known as variable or adjustable rates which do not have a fixed rate of interest over the life of the instrument. It refers to any debt instrument like loan, bonds or credit. This means they are changed on the base of an index rate or other base rate at relevant periods. Floating rate enables you to choose the type of interest rate you want. When you look at the present scenario of interest rates, it is better to keep your home loan at floating interest rates.
You can check transfer of loan as an alternative
Consider you took Rs. 30 lacks of home loan for a 30 year period at a 10.4% interest rate. This rate has risen to 10.65%. At such time, when you decide to switch this loan, you can get the loan at a lower rate of 10.3%. This also decreases your EMI by 0.3%. You can transfer your loan during the loan period only. In this case it is within 30 years.
However, you must decide this process considering the processing charges & other fees. When you apply for the transfer of loan, it is a fresh process altogether. Therefore, you will again have to follow all the documentation process from the start.
Option to adjust the EMI
You can adjust your EMI of your home loan in case of prepayment. You can either choose to end your EMI or end your home loan period.
Hence, now you know some important things to consider when you plan to buy a home loan.