We all have a dream to buy our own house. But the property prices are sky high, and turning the dream into reality becomes difficult. Thus a home loan helps in purchasing your dream house. A home loan is a money that an individual borrows from the bank or financial institution to purchase commercial or residential property. After that, individuals have to pay the loan back to the lender through easy monthly instalments at specific interest rates. So, if you want to buy flats in Adyar, taking a home loan could be a huge step. Home loan interest rates start at 6.50 per cent per annum. Plus, there are various kinds of home loans available in India, depending upon the needs. Look at some popular home loan choices:
Home Purchase Loan:
It is a way to buy your dream home that fits your budget.
Construction Home Loan:
If you want to build your own house, this loan is best for you.
Land Purchase Loan:
This loan allows you to buy land.
Home Improvement Loan:
All kinds of renovation and reconstruction fall under this category.
Home Repair Loan:
This loan is taken for repairing the house.
Home Extension Loan:
If you want to make your home more spacious and prominent, this loan is right for you!
Types of Home Loan Interest Rates
Depending upon the home loan taken, the interest rates are of three types:
Fixed-Rate Loan:
If you want to purchase 3bhk flats in Adyar, you can purchase them at a fixed home loan interest rate. The fixed interest rate remains the same throughout the home loan period, keeping the EMI constant. Applying for a home loan at a fixed interest rate is best when the current interest rate is a bit low, and in the future, an upward trend is anticipated. However, banks give customers options to switch to variable/floating housing rates after a specific period, considering the decreasing trending rates.
Floating Rate Loan:
Floating interest rates are variable and subject to current marketing lending rates. The floating rate changes during the loan tenure. The home loan EMIs increase or decrease depending on the interest rate movement. When home loan rates are decreasing, it is advantageous for prospective borrowers to get a home loan at a floating rate.
Hybrid Loans:
Hybrid home loans are a combination of fixed and floating rates for home loans. When a borrower buys a home loan at the hybrid rate, they initially have a fixed interest rate for some time, and after that, the rate changes to a floating rate. This rate is best suited for borrowers who got the loan at a low fixed rate and planned to foreclose it before the floating rate starts.
How to Get Home Loan at Low-Interest Rate?
Do you want to buy 2BHK flats in Adyar at a low-interest rate? Home loans are high-ticket loans that are given to borrowers after a quick assessment of repayment capacity, credit history, and income. As a borrower, you must know the factors that lenders look at to determine your eligibility for the home loan:
Credit Score:
A credit score is an important factor in determining your credit history’s numerical representation. A good credit score is where a person has paid their EMIs, and credit card bills timely and fully. As a borrower, if your credit score is above 750 from CIBIl, then lenders would favour you with the home loan. Also, banks offer low-interest rate loans to people who have a good credit score. Thus, if you wish to buy flats in Adyar, a good credit score is important.
Loan Amount:
The loan amount sometimes can affect the rate at which you would get the housing loan. So a high home loan amount has a low rate of interest. To avail a good rate of interest, then as a borrower, you should try to make a maximum down payment. This reduces the loan burden and ensures you get a loan at a lower interest rate.
Employment and Income:
Another important factor that lenders look at is your employer’s income, profile, and type of employment. Applicants employed with government or PSUs or working in the large and reputed private sector are preferred by the lenders. Lenders offer a low rate of interest to such borrowers.
Low Rate of Interest for Women Borrowers:
Banks offer a concession to women borrowers than the normal interest rate. A married couple can take a joint home loan and make the wife their primary partner to avail of concessional benefits. Plus, joint home loans increase the home loan eligibility and give tax benefits.
External Benchmark Rate:
Home loan interest rates are linked with external benchmark rates like RBI policy repo rate, the government of India’s 3-month and 6-months treasury bill yield. Under this new regime, the change in the external benchmark rate will affect the interest rate for home loans.
Type of Home Loan:
The home loan rate of interest differs for home loans. Regular home loans have a standard rate of interest. However, the counterparts like plot loans or NRI home loans have a high-interest rate.
Type of Interest Rate:
There are two types of interest rates – floating and fixed. The type of interest rate you choose for your home loan determines the rate you have to pay your lender.
To Conclude,
The home loan interest rate is the same throughout, but there are ways in which a borrower could reduce the home loan burden. If you want to purchase flats in Adyar, consider all factors before applying for home loans.
