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Essential Features Of A Good Home Loan
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The process of obtaining a home loan is a long and drawn out. A first time home loan applicant must understand that there are several factors to ensure that the home loan they are issued is affordable. There are three main components to a home loan including interest rate charged, the tenure of the loan and the loan amount. To obtain the best home loans in India, an applicant must take certain steps to ensure that they are eligible for an affordable loan. The can follow the following steps to do so:
• Reduce the number of credit cards they own to boost their credit score
• Payoff any pending loans and avoid any defaults on payments
• Plan your finances in advance to ensure that if the loan is approved, you can afford to repay the loan comfortably
• Compare interest rates charged by different banks
• Research for schemes and offers that provide slightly more affordable home loans to customers
It is important for an applicant to understand the essential features of a good home loan:
Affordable interest rate
To try and get the best home loan in India , one must attempt to reduce the percentage of interest charged on the home loan. Interest plays a major role in the repayment process of the home loan. A lower interest rate makes the loan more affordable for the applicant and also reduces the financial burden. If an applicant has a high credit score, they can convince the bank to reduce the interest charged. This tends to work as in the eyes of the bank; the applicant can be relied on to repay the loan on time without avoiding any sort of defaults.
Reasonable loan tenure
The tenure of the loan depends on the financial plans made by the applicant. If one plans on repaying the loan in full a few months into the loan, they must opt for a shorter tenure. The reason why one must do so is that during the earlier months of the repayment of the loan, the applicant is paying off a larger amount of interest as compared to the principal amount. If however the applicant plans on paying the home loan methodically each month, a longer tenure would make the loan more affordable.
Principal loan amount
An applicant must try to ensure that the loan amount they receive is the amount they have applied for. Most banks only provide between sixty to eighty percentages of the actual value of the home as a loan. The rest is required to be paid by the applicant as down payment.
An applicant must always attempt to get the best home loan in India that is available. This is crucial to help reduce the financial strain the loan is bound to cause in the coming years.
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