New Delhi9 minutes ago
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Buying a house is one of the biggest financial decisions in our life. We spend months to buy a house, but do not pay much attention to the bank from which we take a loan.
Most people choose banks just by looking at the interest rate. But, just interest rate is not everything. Not paying attention to the conditions, you can lose millions of rupees in a few years.
There are four important things here, which you should take care of before taking the home loan of any bank.
1. Understand the interest rate-sprade: The less spred is the scope of getting the cheaper home loan The interest rate and spreads of each bank vary. The spread is the additional amount that collects the customer above the bank repo rate (5.50%). This spread usually does not change during the entire period of loan. Understand this by an example. Suppose one bank’s spread is 1.8%, while the other is 3.5% of the bank. In such a situation, you can get a loan at the rate of 7.3% from the first bank, while it can be more than 9% from the second bank.
- If you take a home loan of ₹ 50 lakhs for 20 years, then your EMI will be less than ₹ 1,500 if you have an interest rate of 7.5% instead of 8%. In such a situation, you can save ₹ 3.8 lakh in total during the entire period of loan. Therefore, always choose a low -spread bank, as the interest rates may change according to the market in the long term, but the spread remains mostly stable.
2. See loan amount and conditions: Choose a bank with more LTV ratio, you will get more loans It should be found out what percent of the total price of the bank property is giving loan. This is called loan-to-valeu (LTV) ratio.
- If the price of the house is ₹ 50 lakh and the bank gives 80% LTV, then a loan of ₹ 40 lakh will be available. The remaining ₹ 10 lakh will have to be filled with pockets itself. But, if a bank gives 60% LTV, the loan will be ₹ 30 lakh.
- Every bank has different rules to give loans. Such as: your age, job, income, credit score etc. In such a situation, before taking a loan, use the calculator given on the bank’s website to know your qualification.
3. Processing Charge and Prepayment: See the conditions of the prepament, there is no major obligation in it. Every bank decides some rules with home loans. Before taking the loan, it should be clear what are the rules for earlier repaying or transferring the loan.
- Some banks offer prepament facilities every month, while some give this opportunity only once a year. Some banks also decide the minimum amount of prepament.
- Banks also charge processing fees for home loans. Suppose you are taking a loan of ₹ 60 lakh and if there is 0.5% processing fee, then ₹ 30,000 will have to be filled immediately. If a bank gives a loan without processing fees, then your money will be saved immediately.
4. How much time in loan processing: Interest is saved from a bank that takes less time to give loans Choose banks that approve the loan application quickly. If a bank takes 30 days to give a loan and another 10 days, then your half -month fare or interest is saved.
- Even after getting a loan, the services of the bank are necessary, such as getting a certificate of interest or account statement on time every year. Therefore, select a bank that records a track to provide good services.
- Home loan is a long partnership. In addition to interest, look at the spread, other fees, rules and bank services carefully. These small decisions made in the beginning can lead to saving millions in future.
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