New Delhi | Jagran Brand Desk: As we welcome 2022, recent research published by ANAROCK suggests that the top 7 Indian cities have recorded a 113% year-on-year boost in housing sales in Q3 2021. It is a nod to the robust demand the festive season witnessed in the last three months of the year thanks to the catalogue of Diwali offers, and experts hope that the same spirit will be carried into the new year.

Lenders have chosen to continue to offer compelling home loan deals and incentivise housing loans by announcing exclusive benefits and attractive rate cuts in 2022 as well. Industry stalwarts are now extending a new Festive Interest Rate of 6.65%* p.a., to eligible salaried and professional applicants whose CIBIL score is 800 or higher.

This not only reduces the interest paid on the home loan but also champions for end-to-end digitalisation of the borrowing process, as these offers are only valid on applications made online, through the lenders’ website. Interested applicants should note that this offer is valid on applications submitted from 28 December 2021 to 26 January 2022 and on loan amounts disbursed till 25 February 2022.

Tips to get the best home loan interest rate:

While the loans market is flooded with competitive offers, these are best enjoyed by those who meet the lenders’ eligibility criteria with ease. Here’s what you can do to ensure you get the best that any lender has to offer this festive season.

- Maintain a high credit score

Your CIBIL score is indicative of your creditworthiness. Therefore, it is essential to maintain a healthy credit score of 750 and above to qualify for a better home loan interest rate. Here are four ways to ensure that your credit score remains enhanced before you approach any lender.

i. Clear existing debts faster

ii. Limit credit inquiries

iii. Keep a mix of secured and unsecured credit

iv. Pay credit card bills and EMIs on time

It is also essential to check the credit report regularly for discrepancies in your credit report that could negatively impact your score further.

- Meet lender-specific eligibility criteria

Lenders offer the most competitive interest rates on home loans only to eligible candidates. Since the eligibility varies across lenders, it is advisable to see if you can fulfil lender-specific eligibility criteria to avail of a low-interest rate on a housing loan.

i. Here are some standard home loan eligibility criteria that individuals need to fulfil. Applicants must be residing citizens of India.

ii. Age should range from 23 to 68 years for salaried applicants and 25 to 70 for self-employed applicants.

iii. Salaried individuals must have a working experience of at least 3 years, and self-employed applicants should have a business vintage of minimum of 5 years.

Financiers also consider the chosen property, its location, current valuation and likes before deciding on a home loan interest rate.

- Improve and stabilise monthly income

Lenders offer suitable home loan interest rates after assessing the repayment capacity of their borrowers. In this matter, they consider the monthly income of applicants. For instance, lenders provide affordable interest rates to those with higher monthly incomes.

However, individuals can also mention additional monthly income to qualify for a better interest rate. Lenders allow applicants to add the rental income from another property, interest earned from investments and, likes to their income declaration. Borrowers should also consider their liabilities while calculating their disposable income. Typically, to qualify for a low-interest rate, one’s debt-to-income ratio should not exceed 50%.

- Choose interest type carefully

Individuals can choose between fixed and floating interest rates while applying for a home loan. While the first interest type remains the same throughout the tenor, other changes as per external benchmarks, including repo rate.

Many prefer a floating interest rate as it allows the borrower to benefit from favourable market conditions and is also the more affordable option of the two. Readers need to note that borrowers with an existing housing loan can still shift to floating interest rates from fixed ones via refinancing or home loan balance transfer.

- Opt for a home loan balance transfer

Existing borrowers can also transfer their outstanding home loan balance to a new lender offering better rates. Besides a better interest rate, this facility also helps individuals reduce their home loan EMIs.

However, borrowers should opt for this facility in the initial phase of repayment tenor to maximise the benefits. One must also remember to tally the additional costs of transferring their loan to the total cost and see if it is a transaction that makes sense for them. After considering these factors, if the facility offers substantial savings, one should go for it to leverage lower interest rates and better service terms.

- Compare different lenders

A comparison of different lenders and the interest rates they offer also helps one secure the best home loan schemes. Borrowers can also use a home loan EMI calculator to exact these comparisons. Almost all leading financial institutions offer this online tool for customers to use for free.

To further attract applicants with a strong financial profile, lenders also extend pre-approved offers that simplify and expedite the credit availing process. Besides home loans, such offers are also available on various financial products, including loans against property. All you have to do is enter your name and contact number to check your pre-approved offer instantly. 

Salaried or professional individuals with floating interest rates can also reduce the interest outgo by making regular part-prepayment. Besides interest, individuals can maximise their savings further by availing of home loan tax benefits. It allows them to save on taxable income while repaying both home loan interest and principal.

To be able to make the most out of the year-end offers, ensure that your credit profile matches what your lender is looking for, so you can enjoy lower home loan interest rates, and make your housing loan a lot more affordable.

(Note: This article has been written by the Brand Desk)

Posted By: Talibuddin Khan