Having a home not only brings a sense of identity and status, but it is an asset that can reap numerous financial benefits. Purchasing a home is the most significant decision you can make in your life, but the rising prices of property can put a lot of burden on your pocket. In such cases, you can apply for an online home loan to purchase or construct your dream home without redeeming your savings.
You can make your dream of owning your home a reality with affordable interest rates and longer repayment tenure. But, you take an online home loan, pay heed to the underlying suggestions to ease your loan application and simplify your loan repayment.
1. Compare loan options
Thanks to the Internet, you can easily research options available in the market. At the same time, comparing multiple options, factor in the down payment, EMIs, and the loan tenure. Research on these factors will help you choose a home loan that best serves your needs and preferences.
Compared to any other loans, home loan lenders offer a more significant loan amount. So, ensure to explore all the details to make an informed decision.
2. Assess your affordability
While you can choose from a pool of options, it is better to consider your affordability before applying for an online home loan. Choose a loan amount that you can afford to repay its EMI without any default. Consider all expenses beyond EMI to ensure to meet any emergency with your current income. As much as you may like the idea of having a home, your affordability is equally important.
3. Choose affordable EMIs
The equated monthly installments (EMIs) can have an impact on your finances. So, you will have to choose a suitable EMI to avoid defaulting on payments. Every lender has an online EMI calculator that you can use to determine an affordable EMI. There are three components that you will have to consider calculating your EMIs. The principal loan amount, the interest rate, and the loan tenure.
You can alter these values as many times as you want and choose an EMI amount that best suits your needs and preference.
4. Loan repayment tenure
The duration within which you pay off the sanction loan amount is considered your loan tenure. Choose a repayment that serves you well. A long tenure will result in small EMIs, but you may have to pay more in overall interest. It would be wise to choose a short repayment tenure and a higher interest rate if you have a stable and recurrently increasing source of income. Lenders also offer attractive interest rates to borrowers who choose a shorter loan tenure.
5. Maintain a healthy credit score
Your credit score is the critical parameter for your lender to determine your creditworthiness. It indicates your payment behaviour and your capacity to repay the loan amount on time. It is crucial to maintain a minimum CIBIL score of 750 if you wish to secure a higher loan amount and lower interest rate. Having a healthy credit score gives you an upper hand while negotiating the terms of your loan with your lender. It also increases the chance of quicker home renovation loan application processing and loan amount disbursal.
6. Be aware of foreclosure norms.
Foreclosure norms are set by the Reserve Bank of India (RBI), and it regularly sends instructions to banks and non-banking financial companies regarding the foreclosure penalties. The best part about paying off your debt before the due date is that it saves you time and a lot of money in interest. Moreover, when you make payments sooner than expected, it will positively reflect on your credit score.
7. Check your lender’s eligibility criteria
While applying for an online home loan, look for the eligibility requirements. To meet your lender’s needs, you will have to establish that:
- You are an Indian.
- Your age at the time of application at least 21 years old and 65 years during the mature.
- You are a salaried employee of a company, or you own a business.
- You have an active bank account.
- You have a minimum CIBIL of 750.
- Carefully read all terms and conditions.
Before applying for an online home loan, go through the documents and carefully read all terms and conditions applied. Make sure that you agree with those terms before signing the documents.
Since you require a maximum loan amount to purchase a home, you will have to be well-researched on the above-said factors to avoid mistakes and avail of an online home loan that does not burden your monthly budget.