Everyone strives to have their own house, but most lack the desired funds to do so, especially when house prices are hitting the sky every day. But thanks to loans, several people are able to purchase their very own housing units.
However, acquiring a home loan is not just a tedious task; it is also a financial commitment that can lead to devastating results if one wrong choice gets made. Homes do not come cheap, which means the loan amount is also extensive. This leads to higher Equated Monthly Installments( Home Loan EMIs).
Home loans have the longest repayment tenure compared to all other forms of loans. The ownership can go up to 20 to 30 years.
One must plan, research, and search again until there is no possibility of doubt in the chosen home loan. One such essential factor is knowing the exact and accurate Equated Monthly Installments (EMIs). Other crucial factors to consider before applying for a loan are the terms of repayment of the financial institution, the loan taker’s annual income, interest rate, credit history, and processing fee.
Comparing the best home loans of 2021
There are several financial institutions and banks willing to avail of home loans to eligible candidates. However, some institutions are preferable over others due to several accountable factors, including interest rates, processing fees, loan tenure, loan amount, prepayment charge, etc.
These are some successful financial institutions and details about their home loan scheme for 2021:
Axis Bank Home Loan
Axis bank is a modern financial institution. It has a large client base and offers one of the most reliable and convenient home loans.
Here are some of the features that make the home loan such a success:
- Interest rate: The reputed financial institution allows the loan taker to acquire a home loan with an interest rate ranging from 6.90% to 8.55% annually.
- Processing fee: The processing fee of Axis bank home loan may go up to 1%, excluding the applicable Good and Services Tax (GST).
- Minimum loan duration: The loan bearer can choose the minimum duration of the loan as one year and repay the loaned amount in that duration.
- Maximum loan duration: While the minimum loan duration is one year, the maximum can go up to 30 years.
- Minimum loan value: The loan bearer may choose to loan a minimum value of 3 lakh rupees.
- Maximum loan value: Axis bank allows the loan bearer to loan a maximum amount of 5 crore rupees.
- Prepayment charges: Axis bank does not ask for any foreclosure charges from the loan bearer.
HDFC Bank Home Loan
HDFC bank is another popular institution that offers a well-structured home loan that is convenient to the clients.
Here are some features of the HDFC home loan:
- Low EMIs: HDFC offers one of the lowest EMI home loans, the starting being 653 rupees per lakh rupees.
- Interest rate: The interest rates on HDFC home loans vary from 6.80% to 7.30% per annum.
- Processing fee: The processing fee for HDFC home loans is only up to 0.50%, excluding the Goods and Services Tax (GST).
- Loan Tenure- The HDFC home loan tenure can range from a minimum of one year to a maximum of 20 years.
- Loan amount: The minimum loan amount lent by HDFC bank for home loans is one lakh rupees, and the maximum lent amount is ten crore rupees.
- Prepayment charges: HDFC bank does have any prepayment or foreclosure charges on home loans.
There are several other banks and financial institutions that offer reliable home loans, including DHFL home loans, Bajaj Finserv home loans, and ICICI bank home loans.
How to decide which home loan is the best?
Every loan bearer has different requirements and needs; hence it is impossible to narrow it down to one financial institution that gives the best loans.
It is essential to understand individual needs and requirements and then decide the best institution and suitable home loan.
However, if one considers the following factors they may be able to narrow down their choices:
It is easy to check the interest rates on home loans and compare the interest rates offered by various financial institutions and banks. The lower the interest rate on a home loan, the lesser the extra amount the borrower has to pay.
If one finds the process of research and comparing difficult, they may seek professional help and let an expert find out the best home loan for them.
There are several repayment options, including prepayment, partial payment, varying EMIs, etc. One must choose the best and the most convenient payment option for themselves.
There are several other charges such as registration, paying, stamp duty, and others one must bear in mind when making a budget. All these costs must be a part of the loan amount taken.
While home loans can be a big commitment, the right one can help people achieve their dream home without overstressing their mental and financial conditions.
How to get a Home Loan at a low interest rate?
Here are the key points that lenders evaluate, to check your eligibility for a home loan:
Credit Score: Your credit score reflects your credit behavior in the past. Those who have made timely payments of their credit card or Loan are likely to have a good credit score. If your credit score is 750 or above then you are eligible for a home loan and lenders would favorably approve your home loan request. Another important factor is your income, lenders check your monthly income, type of employment, and profile of your employer.
Loan amount: The loan amount you require from the lender also influences the rate of interest on the loan. Loan amounts up to Rs. 30 lakh usually have a low interest rate as compared to higher amounts. One should always try to make a maximum down payment. This will not only reduce your burden but also reduce the rate of interest on the loan amount.
Interest Rate: There are two types of interest rates on home loans. Fixed interest rate and Floating interest rate. The rate of interest you choose will determine the rate of interest which you will repay on the loan amount to your lender.