Increasing inflation rates have posed a number of problems for the Indian economy. The costs of goods and services have risen exponentially in the last few years. And the Indian property market is no different; the prices of plots and properties have increased so greatly that it has become almost impossible for many people to purchase a home alone with the help of their savings. However, now thanks to financial assistance offered by the new-age banks and NBFCs (non-banking financial companies), people can leave all their worries aside. These new-age financial institutions provide home loan at way lower interest rates as compare to the ones given out by the traditional financiers and loan sharks. Other than that, the 4 other things that every housing loan borrower must know are:
- Interest rates: One of the first things any home loan borrower must know is the home loan interest rate Today, lenders have rates that start as low as 8.30%. Besides this, you should also know that there are variants of home loan interest rates – they are fixed, floating and semi-fixed. Fixed rates allow you to plan your repayment better but are generally a little higher and never change throughout the tenure of the loan. Then there are floating rates that are generally lower than other rates but could up or down based on the market scenario. Lastly, there are semi-fixed rates, a.k.a semi-variable rates that start of as fixed but turn into floating rates during the tenure of the loan.
- Charges: Besides for the home loan interest rate, one should also be well versed with the charges involved. You should compare fees such as processing charges, late payment charges, cheque bounce charges, interest on late payments, etc. Also read up on the terms and conditions of these charges to ensure you are fully prepared to handle them and avoid them whenever possible.
- Eligibility & EMIs: Every home loan borrower should also know their home loan eligibility and EMIs. Eligibility should be known so they can apply for the right loan amounts and avoid rejected applications. EMIs should be known so that they can prepare for the repayments right from the start and ensure a smooth journey out of debt. You can find out both of these things easily with the help of the Eligibility & EMI calculators that will present on every lender’s website.
- Tax benefits: Besides being aware of the costs of a home loan, one should also know about the benefits it provides. One of these benefits is the amount of tax a home loan can help you save. This is because, the interest and principal amount paid in a year can help you knock-off as much as Rs. 3,50,000 from you taxable income. This can result in major savings! The best part is that these savings are applicable to all co-borrower as well, as long as they are co-owners of the property as well.
Hope this article has been helpful, good luck and happy borrowing. We congratulate you on the purchase of your new home!