Looking for cheapest home loan? Check out best deals and important things to keep in mind

By: |
October 20, 2021 12:46 PM

This may be the right time to buy one's dream home by availing a home loan as home loans are currently available at 15-year-low interest rates.

Prospective home loan borrowers should also compare processing fees and tenures offered while comparing various home loan options.

Many people consider festive seasons auspicious for making big-ticket spends or for meeting crucial life goals. To capture the larger pie of increased credit demand, home loan lenders offer attractive concessions in interest rates and/or processing fees during the festive season.

As these concessions can result in sizable savings in the overall credit cost of a home loan, prospective home loan borrowers sitting on the fence can consider availing a home loan during the festive season. This may also be the right time to buy one’s dream home by availing a home loan as home loans are currently available at 15-year-low interest rates, which combined with stable housing prices and attractive festive offers from developers can turn out to be a good deal for the prospective homebuyers.

However, there are a few important things to keep in mind before opting for a home loan.

“Many home lenders offer lower interest rates to loan applicants already maintaining lending or deposit accounts with them. Hence, those planning to avail home loans during the festive season should contact banks and NBFCs with whom they already maintain deposits or have availed loans,” says Ratan Chaudhary, Head of Home Loans, Paisabazaar.com.

Borrowers must visit online financial marketplaces to compare various home loan offers available from a wide range of lenders based on the applicant’s credit score, monthly income, job profile, employer’s profile, etc.

“Prospective home loan borrowers should also compare processing fees and tenures offered while comparing various home loan options. The processing fee can significantly add to the overall credit cost of the home loan, whereas the loan tenure would influence the EMI affordability and overall interest cost for the borrower. For example, opting for a longer tenure would lead to lower EMIs but higher interest cost whereas the opposite will be true for those opting for a shorter tenure,” informs Chaudhary.

Home loan applicants should also remember that lenders usually prefer to lend to those having total EMI obligations, including that of the new home loan, to be within 50% of their monthly income. Hence, home loan applicants should use the online EMI calculators to find out their optimum EMIs after factoring in their EMI affordability and unavoidable financial goals and then, choose their home loan tenure accordingly.

Cheapest home loan interest rates currently being offered by leading banks and HFCs:

 

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