5 things to keep in mind before applying for a home loan

Whether it is purchasing a new home or refurbishing your old abode, home loans can help you a lot in terms of finance during these important events in your life. No matter if you are a first-time loan taker or not, the process nevertheless might give you sleepless nights.

Below are 5 tips to help you keep the process smooth and hassle-free both for yourself and the bank.

1). Keep your documents ready

The first thing before applying for a home loan is to keep all your required documents ready and organized. The loan providers usually require your KYC documents such as Aadhar card, PAN card, passport, voter’s id, driver’s license, etc. Other documents which are required include your past 3 month’s pay slip, 6 month’s bank statement, and income tax returns.

2). Get your CIBIL report

The next step would involve checking whether you have a good credit score or no. Lenders ask for your credit rating to know whether you have the financial capability to pay back the loan taken. On an average, a CIBIL score of 750 and up is considered excellent by loan providers. If your credit score is lower than that, simple measures like taking the support of experts and bringing small changes to your financial behavior can help improve it.

3). Are you qualified to take the loan you need?

If you have a good credit score, you can go ahead with the pre-loan application preparation. The next step involves checking whether you qualify for the loan that you are looking for. There are various criteria on which this loan qualification is ascertained. Some of them include your age, experience, type of employment, and minimum income.

4). Estimate your eligibility for a loan

If you have cleared all the criteria needed to qualify for a loan, then the next thing would be to evaluate whether you can afford the home loan amount you want. You must be excited to get your new home or your existing home done up and might end up taking a loan amount which you will later realize is out of your financial capabilities. Half your life will bear the brunt of this error. The easiest way to know about your loan eligibility is by using home loan eligibility calculators.

You can find these calculators on any lender’s website and use for free. Based on your income, savings, the interest rate on your loan, and loan tenure, the calculator will tell you which the right amount for you to borrow is.

5). Find out the rate of interest on the loan you are taking

The last and final step before you sign the deal of a home loan with a bank, you need to find out the rate of interest the lender is charging on the principal amount. This will help you compare between lenders and see which one is perfect for you based on your affordability.

Follow these 5 easy steps to ensure your eligibility for a loan and face no rejection when applying for one.

All you need to an EMI calculator, how it works & 3 benefits of using one.

EMI Calculators are a blessing for anyone planning to apply for a home loan. They provide near-accurate calculations that would otherwise take you a good amount of time and mental racking to arrive at and without which, your home loan application could be rejected or your repayment experience could turn into a difficult one. That’s why this article will explain what these calculators are, how to use them and 5 benefits of using one, in the hope that you’ll end up using one before you apply for a home loan.

So what is an EMI Calculator and how does it work?
It’s a simple online financial tool that provides you the entire break-up of your home loan repayment schedule. Right from the monthly EMI from the first to the last month of the repayment to the break-up of every EMI into principal prepayment amount and interest amount.

All you have to do is find one; they are easily available on the websites of lenders and home loan aggregators, then enter your loan variables such as the loan amount, interest rate and tenure. Upon hitting enter, algorithms are put to work and provide you the amortization table for your home loan.

Let’s now take a look at the benefits of using an EMI Calculator.

i) Helps to budget.
Using a calculator can help you create full-proof budgets and financial plans to repay your loan successfully. Since you know the EMI amount, you can figure out how to adjust your monthly income and obligation to cover the said amount.

ii) Helps you adjudge your affordability.
It’s a simple deduction if the EMI provided by the calculator is too higher, it means you cannot afford to borrow the loan amount you’re entered. If you apply for the given amount, either your application will be rejected or you will experience turbulent times when the repayment begins.

iii) Help borrow the right amount.
You can keep on reducing the loan amount you enter until the EMI amount calculated is something you can afford to set aside each month. This will help you borrow the right amount and ensure your loan application and repayment process sail through without any hassles.

In addition to an EMI Calculator, you should also use the service of an eligibility calculator. Again, this is a simple online tool that requires you only to provide some basic details such as your monthly salary, your monthly obligations, the interest rate and the tenure. Within seconds the calculator will provide you a ball-park amount your lender is most likely to provide you.

Armed with information about your repayment schedule and the eligibility for the loan, you can go into the application with confidence knowing that your loan will be approved and that you will be able to repay it easily! This is the kind of peace of mind using an EMI Calculator can provide you.

We hope this brief write-up has helped your understanding of these online tools and gets you to use one.

Good luck and all the best with your home loan!

4 reasons why you need to use an EMI calculator before applying for a home.

Opting for a home loan is a huge financial decision and using an EMI Calculator before applying will ensure the road out of debt is a smooth one. If you haven’t heard of these online calculators or never thought of using one, then this article will highlight 4 reasons why you absolutely need to use one before you sign upon the dotted line of your home loan application form.

1. Know your repayment schedule.
It’s vital to know roughly just how much your EMI will be before applying for a loan. It will help you chalk out plans to accommodate your EMI payments within your monthly expenditures and help ensure you are well prepared to handle these payments.

Previously, knowing your EMI amount meant setting aside a good amount of time and sitting with a pen and paper or before an excel spreadsheet. Either way, you’d have to flex your mathematical skills to accurately determine the monthly outgo against your home loan.

However, times have changed and you can now use and EMI Calculator to get your entire repayment schedule in a snap. Just punch in your loan variables; the loan amount, the tenure and the interest rate – hit enter and you’ll be provided with a complete amortization table.

2. To know if you can afford to borrow the loan amount or not.
Whether or not you can afford to borrow a given loan amount boils down to whether or not you can afford to pay the EMI. So you hop onto the internet, find and EMI Calculator and get it to provide you the EMI for your loan. If the EMI is too high, it means you cannot afford to borrow that amount.

If you were to borrow a loan amount you cannot afford, most lenders would reject your application. This will result in you losing your processing fee and even cause your credit score to drop.

3. To know the loan amount you can afford.
So if the EMI amount is too high, you cannot afford to borrow that much. However, if you keep reducing the loan amount until the EMI provided is within your financial reach, you will arrive at a loan amount you can borrow keeping in mind your financial abilities at the moment.

4. Using an EMI calculator aids faster approvals.
If, after using an online calculator, you still apply for a home loan it could mean one of two things; the first being that you can afford the EMIs and the second being that you’ve adjusted the loan amount until the EMI amount provided was within your financial reach. Either way, it means you are applying within your mean and seeing this, most lenders should approve your loan quickly.

So there you have it, 4 important reasons why you should use an EMI Calculator. Besides for the above reasons, these calculators save immense amounts of your time and energy; the best part is that they are also free to use and will provide you near-accurate results without any cost!

Good luck and all the best!

5 things you must do before taking a home loan.

A home loan is a huge decision. There are so many things you need to watch out for and some many tinny details you need to see too. Moreover, the fact that a housing loan is something you need to deal with for long periods of time, sometimes up to 30 years, it’s essential you make all the right choices or else you might be staring down the barrel of prolonged financial turbulence.

Thankfully, if you keep a few parameters in mind and do a good amount of research and planning before going into the decision, chances are you’ll have a smooth housing finance journey.

To help you with your preparation, this article will highlight 5 things you must do before opting to borrow funds to finance your homeownership plans.

1. Compare funding options.
The first thing you should do when considering a home loan is a shop for options. Check out the funding packages on offer, the interest rates, the extent of funding on offer, the tenures, the charges, etc. You shouldn’t look for the least interest rate or the highest funding, instead, you should look for a finance option that offers to meet your needs and requirements better.

2. Use home loan calculators.
Calculations and financial planning is the framework for a strong repayment structure. Therefore it’s essential that you get the math right and create concrete budgets way before you even apply for the loan.

You can use an EMI calculator to find out the kind of monthly payments you’ll have to deal with, the loan amount you can afford, etc. You can use an eligibility calculator to find out just how much a lender is likely to provide you with a loan amount and repayment calculator to chalk-out thorough repayment plans.

3. Read reviews.
The experiences of others will provide you with valuable insights into the workings and service quality of a lender. They will tell you, roughly, what to expect when you borrow from a certain financial institute or bank. Therefore, it’s essential to read-up and sees just how a lender treats its customers as you might soon be one.

4. Speak to a financial expert.
This is vital, they’ll tell you what kind of home loan you should opt for keeping in mind your current financial state. You can learn how to save money through the tax benefits of a housing loan. They’ll even guide you as to which type of interest rate, fixed or floating, suits you better. You can have them go through the terms and conditions of your loan offering to highlight any points you should be worried about or approach the lender for clarification.

5. Prepare yourself.
Get a good down payment ready, work on your credit score if it’s poor, find out all the documents needed and ensure that you are fully prepared to take on debt. Because, like they say, what starts well, ends well!

We hope this article will help you and your home loan decisions, good luck and all the best!

5 reasons why taking a home loan is a good idea these days.

Some people are afraid of taking a home loan and going into debt. The idea of having to commit a good part of their monthly salary towards and outstanding loan seems like a scary prospect to them. Other lenders do not wish to pay the price of housing loans, otherwise known as the interest.

However, keeping in mind these two considerable issues with a housing loan, there are plenty of reasons why they still make great financial sense and this article will highlight 5 of these reasons that will, hopefully, help you see these financial products in a different light.

1. They make buying property easy.
Anyone with plans to own property in India will be met by a huge hurdle in the form of the real estate prices; which, in today’s day and age, seem to be shooting through the roof and rising at an exponential rate.

However, opting for a home loan will ensure these exuberant property rates do not thwart your homeownership plans. These financial aids provide you a major chunk of the funds you need to fulfill your purchase plans.

2. Home Loans help you buy into one of the best investments ever - property.

The rates at which property prices are going up make real estate in India one of the best investment opportunities out there. Unfortunately, to buy into this lucrative investment, you’d need to have a sizeable amount of funds. The kind of funds you can easily procure through a housing loan.

With a housing loan, you can invest in Indian property and become a homeowner much quicker as opposed to waiting for an eternity to save the money you need to buy and invest in real estate in India.

3. Favorable interest rates.
Another very good reason to opt for a home loan today is the interest rates on offer. In fact, there’s probably no better time to opt for housing finance keeping in mind the fact that today’s rates are the lowest they’ve been in housing loan history. Some experts even predict these rates to fall further in the future, which could provide you additional savings in time.

4. PMAY CLSS.
Our government’s initiative to provide housing for all has brought into play a beneficial scheme known as the Pradhan Mantri Awas Yojna Credit Linked Subsidy Scheme that aims to help people from medium to low-income groups save substantial amounts of money against a home loan.

As long as your annual household income doesn’t exceed Rs. 18 lakh, you can save up to 2.67 lakh using the interest subsidy provided under this scheme.

5. A home loan can help you save taxes.
The principal repayment amount and the interest payments you make, combined, can you give you access to tax deductions of up to Rs. 3, 50,000 per annum under section 80C and 24 of the Indian Income Tax Act respectively. Approach any lender or financial expert and they’ll tell you the break-up of these deductions and how you can use this benefit to your advantage.

So if you’ve sidelined the idea of a home loan, make sure you’ve factored in the above points before making a concrete decision against opting for one.

We hope this article has been helpful and wish you all the best!