Posted by Anurag Mishra on April 7th, 2017

Your home loan is the most preferred when you are planning to buy a house because it offers to pay large chunk of amount and lets you pack back in monthly installments as per your choice. There are different types of home loans available in the Indianmarkets which are given by various banks and non-banking financial institutions. When you avail for a home loan the most attention grabbing thing is the interest rate. The home loans interest rates are the crucial factor as it decides the amount you need to repay.

The interest rates offered differ from bank to bank. The home loans interest rates offered can be as low as 9-10 % of the loan with a nominal processing fee of 1-2 % of the loan amount. Before availing for a home loan you must see the nature of the interest rate, the tenure for the repayment of the loan. There are two types of interest rate offered on housing loans. Fixed interest rate and floating interest rate, the interest rate will remain constant during the fixed interest rate and when you go for floating interest rate there will be fluctuation in the base rate. But ideally the floating interest rates are cheaper than the fixed interest rate.

Factors that determine your home loans interest rates and its eligibility:

  • Income is the most crucial factor that is considered by the lending institution when the interest rate is offered on your housing loan. A stable and steady income which is sufficient enough to afford the home loan will be able to draw you a pleasing interest rate.
  • The second important thing that is considered while the home loans interest rates is the credit score of the person. It involves a background check on the person’s past and current credit score. If you have paid the EMIs regularly there are chances that you’ll be able to negotiate with confidence with the lender and ask for a lower interest rate due to good credit score.
  • The loan amount influencesthe interest rate. You can negotiate about the interest rate if you are willing to take up a loan of higher amount. The higher the amount of the loan the lower you can get the interest rate.
  • The type of interest rate also plays an important role. If you go for fixed interest rate though you will be the same EMI it is said that the fixed interest rate is costlier than the floating interest rate.
  • Also the salaried individuals are likely to get home loans interest rates which are slightly cheaper owing to the risks involved. There are separate slabs for salaried and self employed appliers for home loans.
  • Scout for offers that are giving the lender. This will help you avail some concessions in the interest rate. A 0.50% of concession can help you save lot of money.

 To compare the home loans interest rates always check the online comparing websites so that you get an idea of what are the interest rates offered by various banks. Always go for a loan which has lower interest rate and offers flexibility in the repayment options.

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Anurag Mishra

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Anurag Mishra
Joined: December 13th, 2016
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