You got to know your loan better

With the abundance of the home loan lenders in the market the borrowers can sometimes get baffles as to which lender should they go with and which one out of the numerous home loan schemes will suit them the best.

For an abecedarian it is very difficult to consider all the aspects of home loan, such customers must research and must get basic knowledge about it so that while finalizing a deal he is better able to understand the terms and conditions that are applicable.

It is better to start planning for a loan before one actually approaches a lender as in the meantime he can gather all the information about the lender and the loan scheme. First of all a borrower must have a clear cut idea about the loan amount that he requires and whether he is eligible to avail that.

To increase his loan eligibility a customer can club his income with his wife or with one of his relatives. Proper evaluation is also necessary as the banks charges processing fees from the borrower as he applies fro the loan, which is non refundable. If at any stage the lender realizes that the borrower does not satisfy any criteria set by them then they will cancel the loan application resulting in loss of funds for the applicant as processing charges.

For home renovation Home Improvement Loan is the best solution

Loans are for all occasions, even if a person has his own and he wants to renovate he can avail for home improvement loan. Home Improvement Loans are the best way through which one can give best looks to his home. These are a category of home loans but of unsecured nature.

Here also finding the most competitive lender is the key. As Home Improvement Loans are unsecured in nature and that is why such loans attracts extra interest rate. The amount of loan that can be sanctioned to a borrower depends on the income on the borrower and his commitments and also the credit score of the borrower.

There are a lot of lenders in the market that provide Home Improvement Loans and, in order to get the best shot a borrower should do proper research about the lean schemes available. Also, a borrower must have a clear cut idea about his total financial requirement and along with it his loan eligibility.

Market research essential before taking a home loan

A lot of Housing Finance Companies have surfaced over the last few years, primarily due to the increase in the demand of home loans; offering a lot of choices to the home loan borrowers. It is a good thing to have a lot of options to choose from but sometimes a customer can find him in baffled state.

Different lenders have different lending schemes that offers loan at different interest rates, so a borrower must reckon well before finalizing a loan. Interest rate is the major factor that decides the EMI to be paid by the borrower that is why proper market research is very essential.

Generally HFC’s finance maximum of 80 percent of the total cost of the house and so the borrower has to arrange the remaining amount all by himself and hence the home loans are generally hefty, so it can effect the future needs of a borrower and hence a borrower must plan the loan very well, keeping all the future prospects in mind.

The loan agreement is a very important document that contains all the terms and conditions and all the loan related documents, so a borrower must and understand the norms mentioned in that very well before signing the document. Apart from the interest rate, there are a lot of hidden costs that the lenders generally don’t mentions in the advertisement all these things are listed in the loan agreement.

During the loan tenure depending on the monetary condition of the borrower, he can accelerate or de-accelerate the EMI amount and can choose from various re-payment options available. A borrower can also pre-pay his loan before the time period, but for that the lender will levy charges on the borrower.

How to initiate loan hunt?

After a customer is done wit the identification of property, the second most important decision that he needs to take is about home loan. There are a lot of lenders and a lot of home loan schemes that are available in the market for a borrower to choose from but sometimes a borrower might find himself in dilemma about which scheme and lender should he opt for.

However sticking to the basics can be really useful in such a situation. First of all before initiating the loan process a borrower must go through the terms and conditions applicable very carefully. Doing this can help a borrower a lot because through this a borrower can analyze the loan scheme well and if he disagrees with certain condition then he is always left with the option of backing out.

Different banks have their different loan calculator through which the lender decides the EMI that a borrower as to pay. So a borrower should always check the EMI calculator used by the lender.

There are a lot of factors that governs the loan amount that a bank sanctions tat includes the age of the applicant, his fund inflows, number ,of dependents etc. so a applicant must always keep these things ,in mind while applying for the loan. The other most important thing is the loan repayment period as it decides the amount of EMI for the borrower. It generally depends on the age of the applicant.

Proper planning can reduce loan burden

Home loans are a very convenient option for a customer to have a home of his own but sometimes if the loans are not managed well they might be cause of worry for the borrower. That generally happens due to lack of planning. So, a borrower should plan the loan well before he goes for it.

A borrower should start saving funds before he apply for a home loan as a borrower is required to pay 20% of the actual price of the property for loan above Rs. 20 lac as down payment.

A borrower must track his fund inflow and his expense pattern so that he can get a idea of how much will he be able to repay as EMI. Ideally a borrower must restrict his monthly EMI to 40-45% of his total income and considering the present scenario a borrower must always be ready to handle higher EMI due to hike in interest rate.

Before a borrower applies for a loan with a bank he must get his basics right, a borrower must always look for a lender offering lowest possible rates and also he should get an idea about the terms and conditions for loan.

Borrowers also have option to go for maximum possible tenure to reduce the EMI burden but in that case a borrower will have to shell out extra amount as interest.