Tips to consider while applying for property loan.
Posted by Anurag Mishra on April 10th, 2017
Buying new property is a big decision in an individual’s life. There is a lot to learn before you start buying your dream home. Being prepared with little bit of understanding on the subject will help make the process easy and painless. Today, various leading banks and finance companies are focusing on giving affordable property loan interest rate and thus a lot of positivity is noted amongst the anxious population who is resorted to rent space for the time being.
Comparing and understanding property loan is a tedious job and like any other financial product it’s important for a buyer to stay tuned with the processes and intricacies of the legal matter and other practical aspect to avoid issues.
So, here are some tips that one needs to consider before applying for a property loan:
Banks or NBFC won’t just give you any random figure that you choose for loan amount. You eligibility depends on factors like income source, risk appetite to pay premium, your credibility, family members, working conditions, place of work, etc.
Before going in for property loan interest rate must assess his or her current financial liquidity and arrive a suitable consensus on how much you comfortably afford. The loan amount should be able to device a specific monthly installment and repayment. You should take into consideration the future income patterns, interest rates, fluctuations, and type of lifestyle you life.
Always, wrap up existing loans for higher eligibility, apply with a co-applicant, keep a clean credit record and then approach for buying suitable property and applying for loan.
Obviously, your entire loan amount, monthly installment and tenure revolve around property loan interest rate. It is the crux of the application. Though financial institutions say their come up with fixed rates, you can still negotiate for better deal on a specified amount. A reduction of 0.25% - 0.50% in the interest rates will help you make huge savings and prove easier on your pockets.
There are some leading private finance companies that offer loan with interest rates as low as 8.70 to 9% with an adjustable rate or fixed rate loan (where the interest rate is fixed for 2, 3 or 10 years, after which it gets converted to adjustable rate, adding to your total of around 20 years. You can avail loan with a maximum tenure of up to 20 years depending on your profile like your age during loan maturity, age of the property, and other crucial parameters.
Banks or NBFC’s take into account the CIBIL scores before sanctioning a loan amount and its corresponding interest rates. Today, it has become imperative to maintain a good CIBIL score that proves you’re in better position for loan repayment and responsible citizen. Timely payment of credit cards, other loan EMI’s and a stable income contribute to healthy CIBIL score.
Many banks & NBFC today offer customized solution on property deal, with attractive interest rates and below pars services to the customers. One often looks for better customer service, easy repayment options and fair amount of time to repay the debts. While the interest rate is important, one should also look at other aspects as discussed. One should check the company reputation, their disbursement procedure and customer service approach before choosing the one that fulfill your financial needs well.
These are another important thing that all consumer should be abreast with as there are many charge incurred such as processing fee, administrative charges, pre & post closure, stamp duty registration, etc. All the charges are a percent of the property loan interest rate amount and need to be given due importance. You should try and curb them to the minimal in the long run.
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About the AuthorAnurag Mishra
Joined: December 13th, 2016
Articles Posted: 108
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