New Delhi | Jagran Brand Desk: With the festive season approaching, financial institutions in India are gearing up to offer the best deals on credit products, including home loans. As per a recent study, the online searches for residential properties reached an all-time high in September 2021.

It is the best time individuals can leverage offers like waiver of processing fees, affordable housing loan interest rate, and the likes. However, whether it is the festive season or not, individuals can still bag the most competitive home loan interest rate by following some simple steps.

Ways to avail the best housing loan interest rate

Almost all financial institutions offer home loans to eligible applicants. Since these offers vary across lenders, it is essential for borrowers to compare different lenders to ensure availing the best interest rates. They can also resort to a home loan EMI calculator to facilitate this process.

Here are some simple tips to follow and avail of a housing loan at the best interest rates.

Choose interest type carefully

While availing of a loan, individuals can choose between floating and fixed interest rates. While a floating interest rate keeps changing as per market situations, fixed interest rates remain the same throughout the tenor.

It is necessary for borrowers to choose an interest rate after thorough research since this affects them throughout the loan tenor. Moreover, each has its own pros and cons, which makes it imperative for borrowers to understand what they’re opting for. For instance, fixed interest rates help accurate financial planning. On the other hand, a floating interest rate is suitable if there is a possibility of a drop in this rate in future.

Maintain a high credit score

Before sanctioning a home loan, lenders check the credit score of applicants to gauge their credit behaviour. A credit score of around 750 is considered enough to qualify for most financial products, including a home loan. It also helps borrowers secure the best home loan rates available in the market.

In case of a low credit score, one should keep the below tips in mind to improve their credit rating.

- Do not miss EMI payments

- Limit making multiple inquiries

- Avoid opting for too many loans or credit cards at a time

- Try to have at least some loan history

- Keep a good mix of different loan types

- A high credit score also aids in getting the best services on a home loan availed.

Meet lender-specific eligibility criteria

Since lenders fix a housing loan interest rate as per the applicant’s eligibility, it is crucial for individuals to fulfil lender-specific eligibility. Generally, it includes the following:

- Applicants must be residing citizens of India

- Age should range from 23 to 62 years

- Salaried applicants must have a work experience of at least 3 years

- Self-employed individuals should have a business vintage of minimum of 5 years

Alongside, they should also know the list of documents they need for a home loan. However, a point to remember here is that eligibility parameters and documentation are lender-specific, so refer to a financier before applying.

Improve monthly income

The monthly income of applicants indicates their repayment capacity to a great extent. Thus, if they want to secure the best home loan interest rate, they must meet the income criteria set by a lender.

However, it also necessitates them to maintain a lower debt to income ratio, preferably below 50–80% for reasonable housing loan interest rates. Additionally, they can also add other income sources to boost the eligibility, resulting in a lower interest rate.

Choose tenor carefully

A home loan accompanies a long tenor that allows individuals to repay this credit conveniently. It’s crucial one picks the right tenor to ensure affordability on a monthly basis. If the tenor is too short, one may find it difficult to pay their EMI every month. On the other hand, if the tenor is too long, one ends up paying a very steep amount as interest.

Apart from this, borrowers can aim to secure the best home loan interest rate in the following ways:

Opt for a home loan balance transfer

Lenders often offer better rates to eligible existing borrowers. Thus, if you have a smooth repayment history and you are in the initial phase of repaying this loan, a home loan balance transfer can prove beneficial. However, you should also know balance transfer charges beforehand.

Existing borrowers are also eligible for pre-approved offers. Selected HFCs extend pre-approved offers that simplify and expedite loan processing. Besides home loans, these are also available on a host of financial products, including loans against property. Enter your name and contact number to check your pre-approved offer online.

Thus, while the festive season facilitates availing affordable housing loan interest rates, individuals can follow these tips to get the same, regardless of market conditions.


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

Posted By: Talibuddin Khan