While financing a home loan, there are multiple factors that need to be kept in mind. Having a good budget and steady financial plan should be a goal to start with, and the next step is to find a good lender to apply for home loan.
Now, there are numerous financial institutions out there. Choosing one out of so many might get challenging. Since this is a long-term loan, it is important to put a lot of thought into picking a lender that provides you with a suitable home loan plan. Having a loan plan you are comfortable with is vital for your credit score too.
5 tips that will help in choosing the right lender for a home loan:
- Compare the type of interest
The interest rate is one of the most important factors that need to be focused on before applying for a home loan. This is because it directly affects the EMIs of the loan. You will have to choose between a fixed or floating home loan interest rate. Going for a fixed interest rate would mean that it would remain constant throughout the tenure of the loan. However, with a floating rate, the interest will fluctuate based on the market conditions. It is always best to make use of a home loan EMI calculator to find out the effect that the interest rate would have on the monthly instalments before making a decision.
- Check the lender’s approval and disbursal time
The time taken to approve, sanction, and disburse a loan will differ from lender to lender. It is always considered best to go with a lender that offers fast loan approvals and disbursals, as this makes the entire process much more efficient. There are some financial institutions that provide pre-approved loans too, and these offers are given on multiple credit options such as a home loan and a loan against property.
- Learn about the credibility of the lender
It is very important for any borrower to choose their lender wisely. Of course, speak with the bank executive to understand the loan plan. However, make sure to calculate your home loan eligibility so that there are no chances of a sudden decrease in the approval amount that is promised. Research about the lender and learn about its reputation before applying for a home loan. It is always best to choose a trusted lender that maintains transparency at every stage.
- Choose a lender that provides a suitable repayment tenure
After using the EMI calculator, you will get a fair idea of a loan amount that is affordable and a repayment tenure that you are comfortable with. Pick a lender that offers you a repayment tenure that matches your budget. Also, keep an eye on the interest rate offered to ensure the repayment goes smoothly.
These are some tips that will help in getting a lender that offers a great home loan plan. Before going ahead and applying, make sure to check with the lender about the documents required for home loan.