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How to Get the Lowest Rates on Home Loans in India

One of the most important decisions in life is whether to take out a home loan. If you don’t do your research to find the best offer, it could cost you a lot because a mortgage is a long-term loan that can last up to 15-20 years. The home loans rate is one of the things to think about, and it might be expensive if you don’t receive the best deal. Consider this: for a home loan of Rs. 50 lakh, even a 0.5% variation in the interest rate (7.5% instead of 7%) might result in a higher EMI of Rs. 3.64 lakh for a loan with a tenor of 20 years. Therefore, it’s crucial to make sure you check the appropriate boxes immediately away.

Maintain a healthy credit score

There is a misconception that your credit score is less significant for a home loan in India than it is for other unsecured lending alternatives. In truth, lenders look at other eligibility factors for house loans in addition to credit scores. There is a potential that a prospective borrower in India with a somewhat low credit score could also be approved for a home loan. However, the influence is noticed on the home loan interest rate when approving home loans for people with relatively poor credit scores. When compared to borrowers without credit scores above 750, lenders charge a higher premium.

Arrange for a higher down payment

By making larger loan down payments, borrowers can maintain a low loan to value (LTV) ratio and receive the lowest home loan interest rate from most financial lenders. You could be able to acquire the lowest rate provided by a home loan lender if you are able to make a down payment that is greater than 20–25%. Therefore, making a larger down payment might get you the best home loan interest rate in addition to lowering your EMI by keeping the balance on your home loan low.

Go with a housing loan balance transfer

Most lenders give current borrowers the option of a home loan balance transfer. With the aid of a home loan balance transfer, you can transfer the outstanding balance of your home loan to a new lender that is providing a significantly lower home loan interest rate. Who knows, you might even get the house loan with the lowest interest rate.

Reduce the loan tenor

One of the key determinants of the amount of interest you will pay is the length of your home loan. It is possible that you will wind up paying more in interest because your predicted EMI outlay is decreasing for longer tenors. However, choosing shorter house loan tenors may result in higher EMIs but significantly lower overall interest payments. So, before requesting a home loan in India, you must select the loan tenor. To determine the loan term and anticipated EMI that best suit your needs, you may want to think about using online tools like a home loan interest calculator or a home loan EMI calculator.

Look for better deals

It is a fairly common knowledge that lenders favor consumers with good credit histories because the likelihood of them failing is low. For those who are already clients of their lenders or who have a good credit history, lenders provide preferred interest rates on home loans. So, if your score is closer to 800, you might qualify for a home loan with better terms. Therefore, there is a potential that you will be given a house loan with reduced interest rates if you have been a responsible borrower and have paid off previous loans on time. If not, you might think about engaging in negotiations with the relevant lender if you have a good working connection with the lender you’ve selected. Check out the holiday specials in addition to that. During the holiday season, financial institutions frequently cut the interest rates on home loans.

Consider home-saver loans

A home-saver loan can be one of your options for securing the lowest home loan interest rate if you have variable income and are searching for flexibility for the months when you’ll have to make a smaller monthly mortgage payment. Similar to overdraft facilities, the sole need is to pay the monthly interest as a minimum. As a result, you can temporarily reduce your monthly payment to just the interest on your mortgage. Once you feel secure, you can pay a larger amount once more to reduce the balance owed on your home loan. You will pay between 0.15 and 1 percent more in interest than you would with a normal home loan, so keep that in mind while considering the home loans.

 

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