Role of the financer in home loan.

The home loan interest rates are lowest in the history nowadays; before you get inspired with these luring rates and join the bandwagon keep in mindthat interest rate is a part of the loan. There are several other charges and elements associated with this loan. Most of the borrowers hung up with

The interest rates when comparing different financers. Taking this train of thought further down the track, there are processing fees and other charges that will give you an idea of the overall loan charges. Though, interest amount holds the second chunk of your loan after the principal amount but other charges are also important.

Let us understand rest of the charges other than interest rate in home loan.

Processing fee: Ranging from.5-2.5% of the principal amount, it is a significant cost in addition to the loan interest payment. Though it is onetime payment but it is not refundable. By any chance if your loan is rejected you will lose the processing amount.

Prepayment charges: these charges are applicable in case of fixed rate of interest. As a penalty for fore closure you pay extra amount than the balance EMI amount.

Administrative charges: this is also one time charge depending on the loan amount. It is also not refundable.

Swap charges: these charges are levied in case of switching the loan account from the existing account.

Late payment charges: in case the borrower misses the due date, the lending institute punches a penalty of 2-4% on the overdue amount.

Miscellaneous charges: documentation, stamp duty and other charges come under this charge.

These are the extra charges you have to pay along with the loan & interest amount. Though most of them are paid once, but is not that low to be overlooked. A good financer will keep each and every transaction transparent.

The financial organization you sign for your home loan has a great role in your life. So choose the financer diligently, a good financer will offer quick loan disbursement, competitive rate of interest, transparency in the charges levied and most important is the flexible repayment options to ease the debt burden.

You have to prepare yourself properly to prove yourself a worthy borrower with good credit score, a stable income to pay the EMI on time. The road of loan tenure can be hassle-free only with the mutual understanding of the financer and the borrower. If the financer is disbursing the loan amount in time, then it’s the borrower’s priority to repay the EMI in time.

Getting a home loan is not a hard task, but to commence the debt journey is exhausting. Expert advices the borrowers to limit the loan amount as much as possible. That doesn’t mean they have to compromise with their dream. Prepare yourself and take the decision only after evaluating your affordability to complete the loan tenure without being a defaulter. Don’t jump into the bandwagon without proper safety measures. Here your safety measure is good amount of money for down payment to reduce the loan principal, a good credit score to win the financers’ confidence and capability of repaying the EMI regularly along with saving amount for freeing yourself from debt.