Individuals facing a shortage of funds to buy their dream home can opt for a home loan. It is a type of secured loan where borrowers purchase the property against which they borrow funds. Most individuals today opt for a home loan as it is one of the easiest credit options where borrowers can get up to 80% of the property’s cost. In addition, borrowers can use the funds to purchase a home or invest in home construction or renovation. Individuals seeking a home loan should always consider the current home loan interest rates offered by different financial institutions.
Benefits of home loan
Individuals can get the following benefits under a home loan:
Low interest rates
The Government of India prioritizes funding for individuals seeking a home loan. Thus, home loans are generally available at low interest rates in comparison to any other secured loans.
Long repayment tenor
The longest home loan repayment tenor can go up to 30 years. It reduces the burden of equated monthly instalments considering the extended repayment tenor. For an exact estimation, borrowers can use the home loan EMI calculator.
Balance transfer facility
Most lenders or financial institutions offer the benefit of a home loan balance transfer, available at competitive interest rates and flexible repayment tenor. Through home loan balance transfer, borrowers can also avail of a high-value top-up loan.
Home loans are made available against simple documentation, which additionally helps in speeding up the overall home loan process. Few KYC documents and paperwork proving financial stability are the only things required.
Borrowers can get income tax benefits of up to Rs. 1.5 Lakhs on home loan interest rates as mentioned under Section 80EEA. Moreover, under Section 24(b), individuals can avail of tax benefits of up to Rs. 2 Lakhs.
Eligibility criteria for a home loan
Potential borrowers who want to apply for home loan should fulfil the following eligibility criteria:
- The individual should be a citizen of India.
- Salaried employees should have some good working experience.
- Self-employed individuals should have good business vintage.
- Applicants should have a steady flow of monthly income.
- Potential borrowers should have a good number of working years left.
Borrowers can speed up their home loan process if they qualify the home loan eligibility criteria at once.
Documents required to apply for a home loan
Home loan applicants have to provide the following documents:
- Official ID proof and address proof, as issued by the Govt. of India.
- Employment documentation in case of salaried employees.
- Business paperwork for self-employed individuals.
- Bank statements that prove the financial stability of the borrower.
- Property documents that the borrower has to submit later.
Borrowers who provide absolute documentation without discrepancy might convince their lenders to offer an affordable home loan interest rate.
Fees and charges applicable on home loan
The fees and charges applicable vary from one lender to the other. However, a lender might levy the borrower with processing fees and security fees. Similarly, the charges applicable include loan statement, interest, and principal statement charges, and penal interest.
Furthermore, most lenders or financial institutions offer their existing customers’ with pre-approved offers. Home loan applicants can check their pre-approved offers by simply providing details like their name and contact number. Thereafter, they will be able to enjoy benefits on current home loan interest rates and faster processing. Moreover, these offers are available on products like home loan and loan against property.
Guide to Using a Home Loan EMI Calculator
A home loan involves immense financial planning, and it can go wrong if not planned well. Hence, it is wise to use a home loan EMI calculator before availing of a home loan. This online financial tool helps borrowers compute their monthly instalments based on the loan amount, interest rate and loan tenor.
Benefits of Using a Home Loan EMI Calculator
Here are the following benefits of using a housing loan emi calculator:
- Compare loan offers: With the home loan emi calculator, one can compute EMI payouts for different loan amounts. Trying the different combinations of loan amount, interest rate, and loan tenor will help one choose the most affordable EMI, thus assisting them in choosing the best loan offers.
- Appropriate outcome: Manually calculating the EMI amount leads to erroneous results. However, individuals will get 100% accurate results from a home loan emi calculator.
In conclusion, a home loan EMI calculator, helps one plan his/her finances while servicing a home loan, making the borrowing profitable.
How to use a Home Loan emi calculator
Here are the steps that will help borrowers calculate the EMI amount using a home loan emi calculator:
Step 1: Visit the official website of the preferred lender and head to the home loan emi calculator page.
Step 2: Now, input the preferred loan amount.
Step 3: Finally, enter the repayment tenor.
On completing these steps, borrowers will be able to see the EMI amount and other relevant details like the overall outgo of housing loan interest rate and total payable amount.