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Home Loans In India: A Few Things To Consider Apart From Interest Rates
In today's time of zooming property prices, individuals are unable to buy their dream property with little savings over the years. They would naturally apply for home loans in India with top banks and finance companies. Thanks to the government efforts, you can now avail a loan with interest rates as low as 8.40-9% and with PMAY you can further save around 2.67 lakhs on the total interest rates. It's like an icing on the cake. So, technically speaking, you pay mere 7-8% of the interest rate on the total tenure. You need to be sure you've checked all the factors thoroughly, and close your deal.
So, here are a few factors you should consider before applying for a loan:
The principal amount
Lenders sanction only 80-85% of the property value, and therefore, you have to be prepared with the remaining money. Also, the loan disbursal amount depends on the property value. For instance, if it’s beyond 50 lakhs then the lender might grant only 75-80% and if it’s below Rs. 30 lakhs chances are you might get 80-85% of the property value. Your credit score and income source will play a decisive role in it.
Most people feel it’s all about getting the ideal home loan interest rates to crack the best deal; however, it’s half the job done. You have to talk to the banks and NBFCs for understanding every nook and corner of your deal, especially the charges. There are other charges such as pre-penalty charges, late penalty charges, cheque or ECS delay charges, conversion charge, etc. They're kept hidden in ads, so thoroughly investing charges before signing your deal.
When you have a good job or business stability, it means you build confidence amongst lenders for a regular flow of income. This will automatically help you to grab some good discount on home loan interest rates. Lenders consider those who work in private or public limited, self-employed such as doctors, lawyers, architecture have a low risk of income loss.
Most people are unaware that they can avail some great tax benefits while applying for Apnaloan home loans in India. Under Section 80C and 24, of the income tax act, 1961 individuals can avail tax benefits up to Rs 1.50 lakhs on the principal amount, and interest rates, respectively. If you're a first time home buyer, you will enjoy additional tax benefits of Rs 50,000. Imagine, this amount would help you pay a couple of your home loan EMIs as well thereby, reducing the burden on your debt.
Your credit score is one of the key factors to decide your home loan interest rates and principal amount. It will display your creditworthiness and financial history. A credit score of below 750 is considered good enough to negotiate with the lenders for low- interest rate deal. If your credit score is not so great, you can improve it by paying the prior dues. Maintain a healthy credit score at least 5-6 months before applying for home loans in India.