What is a Home Loan?
Borrowing funds from a bank or other lending agency to go towards the down payment or closing costs for a home or business asset is known as a home loan. The borrowed funds are repaid to the lender over time through convenient monthly payments (EMI) at an agreed-upon interest rate.
Home Loan Eligibility
Home loans are available to people who meet certain conditions, such as being permanently employed by government agencies or a reputable company. Applicants must be over 21 and not yet retired or in their final year of college when the loan is disbursed.
To qualify for a home loan, borrowers must be at least 21 years old when the loan is opened and 65 or younger when the loan is paid off. To qualify for a house loan, borrowers must be at least 21 years old and no more than 65 years old after the loan is fully paid off.
How to Get a Home Loan?
Filling the form
The first step in getting a home loan is to fill out a loan application—with full contact details, including Education, Salary vs. self-employment income, and Earnings.
Documentation
After filling in the required information, you must submit Form 16 and the following papers: proof of identity, proof of address, pay stubs from the previous three months, evidence of employment, and bank statements from the last six months.
Verification
The bank will check all the paperwork you submit. Your bank could even send a representative to your business or residence to assist you.
Sanction Letter
The bank will give you a sanction letter once your application for a Home Loan has been approved. This letter is official documentation indicating the bank has accepted your loan application. The maximum sum for which you can apply for a loan.
Secure Payment Fee
There is a one-time cost for using secure payment processing. Before or after the loan is approved, the bank may request that you pay the fee in full.
Interest Rates for a Home Loan
Two distinct kinds of Home Loan interest rates exist.
Fixed Interest Rates for Loans
One Home loan interest rate is the fixed loan interest rate, in which the borrower is guaranteed a fixed interest rate for the life of the loan. Your home loan interest rate will be locked in for the loan term.
Floating Interest Rates for Loans
When the interest rate on a mortgage is allowed to fluctuate, as it does in a variable-rate mortgage, the rate is adjusted quarterly. Loan interest rates will be tied to the prime lending rate. The interest rate on a home loan may fluctuate if the RBI decides to change its policies in response to market conditions.
Home Loan with Bad Credit
A strong credit history is a must for obtaining a home loan. However, many people need a positive credit history since they cannot pay their bills on time owing to monetary difficulties. It’s a well-known fact that people with poor credit scores have difficulty securing home loans. Banks and other lenders will not extend loans to them because of the huge risk they pose.
How to Get an Instant Home Loan
Raise your Credit Rating
The borrower’s credit score is a major component in determining whether or not they will be approved for a mortgage. An excellent credit score is 700 or above; this indicates to lenders that you are a trustworthy borrower, and they are more likely to approve your loan request quickly. The possible range of a score is 300-900.
Lack of Any Pending Debts
You must pay off outstanding loans or credit card balances before applying for a mortgage. As evidence of your creditworthiness, this will considerably improve your application’s acceptance chances.
Submit a Joint Application
A co-applicant with a high credit score might boost your reputation and speed up the loan approval process if your score is poor or you need to meet all the qualifying requirements.
Top-3 Banks for an Instant Home Loan
SBI Housing Loan
SBI offers financing for up to 90% of the purchase price of a property at 8.50% p.a. and above for terms of up to 30 years.
HDFC Home Loan
Home loans from HDFC are available with interest rates as low as 8.50% p.a. for terms of up to 30 years.
ICICI Home Loan
The ICICI Bank offers house loans with interest rates beginning at 9.00% p.a; and terms as long as thirty years.
Conclusion
In conclusion, a Home Loan is the best financial option if you need money to buy or build a house. You can’t use your home equity loan for anything else. Therefore, a home loan is a viable option if you need money for any other purpose.