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Do You Understand The Home Loan Process Well Enough?
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A home loan process is a comprehensive process. A number of things need to be taken into consideration and for a long period of time. Planning a home loan in India needs time and great amount of effort. Going through the points below you shall understand a few things that need to be kept in mind specifically when you apply for a home loan.
1. Fixed interest rate or variable interest rate?
Choosing the right interest rate is of utmost importance. The final financial planning as approved by the financial consultant must ensure the right choice of interest rate basis. Whether the investment gives a better rate of return on a fixed interest rate or the variable interest rate, which is subjective to the time of investment, must be given high importance. Reading the fins prints of the home loan clauses mentioned in the home loan papers is a must read. Some financial institutions mention that the fixed interest rate is subject to change in case the base interest rate declared by the Reserve bank of India, is subject to a marginal hike.
2. Longer tenure or higher EMI?
The task of alertness with regards to the home loans in India is to be continued well after availing the loan as well. The EMI amount changes with the changes in the interest rate specifically in case of variable interest rate home loan scheme. Even so, whether fixed interest rate or variable interest rate, if at any time, you are required to decide between a longer home loan repayment tenure or higher amount of EMI, it is advisable to choose the later.
The longer repayment tenure seems appropriate, but the hidden fact remains, which is, payment of higher interest amount in total by the end of the loan tenure. The only exception here is if the interest rate is subject to change at the time of, the initial few years of loan tenure. Reason being, the EMI then caters higher interest amount as compared to the principal amount.
3. Home loan, along with a car loan possible?
Yes, it is possible. Availing a home loan, along with a car loan or any other loan is possible in keeping with your credit history and income status. The financial institutions take into consideration a number of factors while approving loans and checking for the same using the home loan EMI calculator tool is advisable.
It is never about availing a loan, but how well can is it availed. Ensuring the knowledge of the minute details of the home loans in India can make a huge difference.
Conclusion: Having a clear understanding of home loan and its clauses, always helps.
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