Most of us dream of owning a house; sadly, it remains a dream for some. Well, the dream is not so distant if you follow a practical, structured approach to fulfilling it. A home loan can help you get closer to your ambition.
Getting an instant home loan may sound a little intimidating and leave you with thoughts like ‘What if I am not able to repay it?’, ‘What if the debt consumes everything?’, ‘What if I cannot enjoy other things all those years that I’ll be repaying the EMIs?’. The answer to all these apprehensions lies in good financial planning.
A quick look at the wide range of offers on the market might seem bewildering, but some forethought before taking that loan to get to your dream house will help you pay it off with ease. This guide will equip you with the knowledge you need to make an informed decision.
Before you apply for a home loan, a few factors that need to be taken into consideration are as follows:
1) Look around for a lower rate of interest:
Home loan interest rate matters the most when applying for a home loan. It defines how much you will end up paying eventually to the lender. The lesser the interest rate, the lesser will be the burden on your shoulders.
You should compare the interest rates offered by different lenders in the market, whether it is a bank, a non-banking finance company, or any other financial institution because home loan rates can vary from one lender to the other.
2) Plan your EMIs ahead:
You can get a clearer picture of how much money you will be required to repay each month with the help of an EMI calculator. This online instrument can come in handy for planning a home loan EMI that is suitable for you. You should consider your cost of living and how much you will be able to pay each month without cutting back on another necessary spending.
However, it is advisable to opt for higher EMIs as they can help you pay off your loan early, saving you a significant amount of money on interest. You can pick any EMI calculating tools available online and plan in advance.
3) Check your credit score:
Maintaining a credit score is obligatory for applying for any kind of loan. Making certain that your CIBIL score is above 750 will help you negotiate the rate of interest on your loan and will also increase your chances of getting an instant home loan.
Once you have understood all the prerequisites of getting a home loan and feel that you’re ready to take the next step towards it, you can start applying for a home loan. In this digital era, you can apply for a loan from the comfort of your home. Start by finalizing your lender as per the interest rate they provide you, and then you can begin with the process given below.
Here’s how to apply for a home loan
– Check eligibility – By doing this, you will be able to determine how much loan amount you can receive. Fill in the property details and some basic personal information.
– Once you find your loan eligibility, you can proceed with the application.
– Provide your financial information, your bank and saving details, and information on any existing loans.
– Upload all the required documents.
– Sit back and wait for the bank to review your application and initiate the processing of your loan.
After successfully completing the procedure and getting the loan from your lender, it is important to manage your EMIs functionally. Here are a few tips on how you can do the same:
1) Time it right:
Your home loan EMIs can be scheduled as per the timing of your salary being credited through the ECS mandate. It enables automatic deduction of the agreed amount and transfers it to the desired account each month. You should set your EMIs to be automatically debited at the beginning of your salaried month so that you will never miss an installment. Keeping up with your installments will save you from additional stress while paying off your loan.
2) If you can – Increase your EMI:
You should put the repayment of your loan at the top of your priority list. In the period of paying off your home loan EMIs, it is recommended to avoid any unnecessary indulgences. If you feel there is still space for you to increase the installment amount, and you will be able to manage it, increase it.
3) Partial prepayment:
Your side hustle paid off a good amount for your latest project? Have you got a yearly bonus from the organization you’re working with? Have your financial investments brought fruitful returns? These are the kind of opportunities that should be grabbed to make a partial prepayment of your home loan. Remember, every penny counts. Pay more than your promised monthly EMIs every time you get a chance to. You’re going to thank yourself later when you pay off your loan early with only a little discipline.
Wrapping Up:
As advertised by various banking service providers, getting a home loan is not as difficult as it may seem before applying. However, it is a huge investment decision that can affect many of your future financial decisions for several years, depending upon the tenure of your home loan. It is important to pay heed to home loan comparisons from different lending institutions, as even a fraction of a percentage can make a considerable difference to your EMIs later.
Applying for a home loan gets you a step closer to what seemed like an unattainable dream at one point. Your journey towards getting your own home becomes structured yet simpler when you opt for a home loan. With a firm hand, you can pay off your EMIs on time or even pay off the loan before it is due.