One of the numerous loans that are available in India, home loans are specifically meant for purchasing a house. When you apply for a home loan, you are expected to provide collateral to the lending party.
To apply for a home loan, you need to fill in the bank’s application form and submit documents required for a home loan. Now, before applying for a home loan, there are certain things that you need to keep in mind for your home loan application procedure to be smooth:
- Be aware of the eligibility criteria set by the lender
The rate of interest is one of the most important things that you need to look for before signing up for a home loan. It is important to do so because the interest rate has the potential to significantly influence the total cost of your house. As these loans come with a longer tenure, even a small difference in the interest rate can considerably impact your finances in the longer run. Hence, it is important for you to compare the interest rates offered by many lenders.
- Have a healthy credit score
The credit score can be defined as the score that serves as an indicator of your creditworthiness. Your credit score is one of the most important factors that the lending party will look at whenever you apply for a home loan. Generally, a credit score above 750 is an indication of timely repayments.
- Learn about the repayment tenure that your lender is offering
The tenure of a loan can be defined as the time within which you are expected to repay the loan. In terms of tenure, there are two types of loans, namely, short-term, and long-term loans. One of the prominent examples of long-term loans is home loans. Unlike, say, travel loans, the tenure for home loans is usually over a decade. For example, IDFC FIRST Bank’s home loan comes with a tenure of 30 years.
- Keep your financial documents ready
While applying for a home loan, another aspect that you need to keep in mind is to keep all the documents required for a home loan ready. These documents will include both financial and personal details. Documents that provide insight into financial details include your tax returns and salary slips. Documents verifying personal details include your Aadhar card, PAN card, passport, etc.
- Use a home loan EMI calculator
Before taking a home loan, it is essential to be aware of the loan’s monthly instalments that you would have to pay. You can find out EMI values of various loan plans by using a home loan EMI calculator. This EMI calculator is a tool that’s usually available on most financial institutions’ websites. Free to use, this calculator assists you in working out your EMI payments after considering the loan amount, interest rate, and repayment tenure.
Keeping the above-mentioned points in mind can help in ensuring that there are no problems with your housing loan application.