Property is an asset that provides you with a range of financial benefits. If you want to buy real estate for personal use or as an investment, the banking industry offers a variety of lucrative home loan opportunities. Most banks offer convenient monthly instalments as well as flexible repayment tenure. There could be many reasons behind going for a home loan from a GIC Housing Finance or any other sources; you don’t want to spend all of your funds lying in a savings account or don’t want to liquidate your fixed assets, etc. However, before you choose a home loan, it is suggested to go through the important suggestions listed below as that will simplify availing loan and its repayment for you.
1. Research extensively on available loan options: Considering how easily information is available on the internet, make an effort to conduct thorough research on the options available on the market before submitting an application for a loan. Additionally, the three key components of a loan—down payment, EMIs, and repayment tenure—are of prime importance and hence, you should take consultation with experts if required. Most house loan providers, such as GIC Housing Finance, provide the assistance you should take advantage of. These three aspects of a home loan are what help you choose a suitable home loan from a better lender at attractive home loan interest rates.
2. The Rate of Interest: The interest rate of your home loan is a key factor as it is going to impact your savings and expenses for a considerable time. As a borrower, you should aim to find a lender that is going to give you a home loan at a lower interest rate. Home loan from GIC Housing Finance Starts from 8.20% p.a. Thus, approach different banks and compare their interest rates and other associated charges and terms
Floating: Also referred to as a variable interest rate, a floating interest rate may change even during the loan tenure as it is subject to the lending rates that are in effect at the time the loan is taken out. With the change in interest rates, your EMIs will also alter.
Fixed interest rate: As the name implies, a fixed interest rate home loan has an interest rate that stays the same over the course of the loan, keeping your EMIs constant. When the interest rate is low, and an increase in the future is anticipated, choosing a home loan from Shriram Housing Finance or any other lender with a fixed interest rate will help.
3. Aim at Affordability: Even though there are many different home loan options and different lenders, such as Shriram Housing Finance, available to you, you must first assess your affordability before applying. There is one thing to purchasing a house you like in a location you prefer and another to actually being able to pay for its EMI. In addition to being able to pay the fixed monthly EMIs, you should be able to comfortably change them to fit within your standard of living or to cover any unanticipated emergencies. Take into account overhead expenses and other essential expenses. Therefore, you should avail a home loan amount that you can afford to pay instead of what you are eligible for.
4. Choose Suitable EMIs: Do you know it is you who determine the equal monthly instalment amount that you are going to pay? The amount of the down payment you make to GIC Housing Finance when buying a house has a significant impact on EMIs as well. The burden of having to make EMI payments decreases as the down payment amount increases. Additionally, it is best to make sure that the EMI amount you choose does not surpass 45 per cent of your gross income.
5. Repayment tenure: Your repayment tenure is the amount of time you need to repay the home loan from Shriram Housing Finance sanctioned by you. Your EMIs and the repayment tenure go hand-in-hand. While choosing a longer tenure may result in lower EMI payments, it also increases the interest rate that will be charged, resulting in you having to pay double or triple the loan amount due to high interest. If you set a strict budget and have a steady source of income, it is best to select a short repayment tenure with higher EMIs. Such tenures have significantly reduced interest rates to encourage faster repayment. Even banks may provide attractive interest rates to customers who choose a shorter repayment cycle.
6. Know foreclosure norms: You may benefit from keeping a close check on how the RBI norms are changing on many different levels. You avoid incurring any further costs by foreclosing on your home loan sooner by paying the outstanding balance earlier, as stated in the agreement.
7. Know associated charges: Do you know apart from EMI, there are charges that the borrower has to pay? It could be administrative, processing, or service fees that banks impose on borrowers at the time of loan application. Make sure you review these with the GIC Housing Finance or the lender you choose before applying for a loan. Determine whether these are monthly or one-time costs; if they are monthly fees, they must be taken into account in addition to your EMIs while drafting your monthly expenses.
8. Processing Fee: To process your loan application, Shriram Housing Finance or any other lender will charge you a processing fee. Since most banks and housing finance companies charge processing fees as a fixed percentage of the loan amount, the amount depends on the loan amount. A home loan’s processing charge typically ranges from 0.5 per cent to 1 per cent of the loan amount. However, regardless of the loan amount, some lenders offer flat processing fees. Since home loan amounts are typically significant, even a little percentage change can have a big impact.
Spend with caution: Monthly expenses are a factor that comes right after the affordability clause. It is advised to get help from professional like Lentor Modern and stick to a strict budget if you have a home loan to repay in order to pay your EMI and other household expenses comfortably. To maintain your credibility, you must be consistent with your EMI payments in order to prevent late fees or increased interest rates. Avoid spiralling down into non-repayment of a home loan by timely and regular loan repayment in order to own your house fully. This may entail being frugal with your money and delaying any non-urgent purchases.
Lastly, home loan amounts from Shriram Housing Finance or any other lender are typically larger than other types of loans, so be sure to look into all the particulars and learn everything there is to know before, during, and after submitting an application for a home loan. Consult an expert, if required, who goes through the agreement carefully for overall and comprehensive knowledge of the loan application. You might want to consider Home loan insurance or which provides financial protection to your family in case of your unfortunate demise.