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Buying a house is one of the biggest dreams come true for most people and obviously an extravagant affair altogether. Imparting life into such a dream is once in a lifetime deal and the best one can do to accommodate it is to take a home loan.
A home loan can be opted for either buying a new house/flat or even a plot of land, or renovation, extension, and repairs to an existing house.
The average range of home loan interest rates are from 8.25% to 14.00% but the rates usually vary from bank to bank and on many other factors. Certain government banks along with some private banks and financial institutions like SBI, ICICI and Standard Chartered bank offer the lowest interest rates on home loans at 8.25% to 14.00%.
Some banks have also given a privilege to women by providing them a home loan interest rate at 8.30% and 9.50% which is 0.05% lesser than the home loan interest rate provided to the male borrowers.
Banks have a list of eligibility criteria on home loans. The first thing banks look at is one’s credit history to understand their repayment habits, typically a credit score of 750 is preferred. Some other important factors taken into account are as follows:
EMI Calculator which is a simple and handy tool calculates the monthly amount payable to the lender (Bank). It’s basically a slider where you have to enter the values as per the Principal amount (P), Time duration (N), and Rate of interest (R). You can also try ClearTax Loan EMI Calculator to find out how much EMI you will need to pay every month and figure out your budget in advance.
|The following documents are required along with your Loan application:|
|Agriculturists||Salaried Customers||Businessmen – Professionals|
|Application form with photograph||Application form with photograph||Application form with photograph|
|Identity and Residence proof||Identity and Residence proof||Identity and Residence proof|
|Last 6 months bank statements||Last 6 months bank statements||Last 6 months bank statements|
|Processing fee cheque||Processing fee cheque||Processing fee cheque|
|Copies of Title Documents of Agricultural Land depicting Landholding||Latest Salary Slip||Educational Qualifications Certificate and Proof of Business|
|Copies of Title Documents of Agricultural Land depicting crops being cultivated||Form 16||Business Profile and Previous 3 years Income Tax returns (self and business)|
|Statement of previous 2 years of loans availed||Previous 3 years Profit/Loss and Balance Sheet|
Availing a home loan has gotten easier from before, thanks to the various mediums. One can either go to the bank branch directly and inquire about the loan or opt for online application. Upon making a decision, the bank collects required documents and initiates the loan process which includes checking of CIBIL score, the value of the asset, eligibility calculation etc.. Based on the evaluation of all the documents, the banks make a decision on the loan.